Are you confident your portfolio will produce the outcomes you want long term?
How are you invested?
Do you have My Super ? Do you think your My Super Super account is invested with your thoughts and dreams in mind? When did you discuss with your superannuation fund how you wanted your My Super portfolio invested?
What are you trying to achieve?
We spend a lot of time with clients explaining why their portfolio will produce the outcomes they want in all investment markets. People say you cannot predict things like Covid 19, the GFC or World Trade Centre disaster. That is true however whatever the cause, Share market falls of 20-30% happen all the time and you can prepare for that.
You know it will happen, you dont know when, you dont know the trigger you just know it will happen. The longer it has been since a big fall the closer the next one is.
If you know there will be a heavy share market falls then the only relevant question is what happens to you when it happens? If you cannot answer that question now, you need to get the answer before it happens otherwise you could be jeopardizing your financial future.
You need confidence that your money will look after you in all economic environments. To have that confidence you need to be engaged in how your portfolio is set up. That is what your financial planner can assist you with. Ensuring you have the cashflow to maintain your lifestyle long term is what your adviser is working with you to achieve and reliable investment returns are part of that process.
Active or Passive Managers
There is a lot of debate about Active Managers and Passive Managers and what is better. For the record we use Active and Passive mangers to achieve the clients objectives. What rate of return are you happy with ? That comes from Asset Allocation. How volatile do you want your portfolio ? That also comes from asset allocation. Do you want high return and high volatility or more steady return and stable asset values. That also is asset allocation. Some assets like cash earning 0.5% dont look that attractive when other assets are earning 20%+ pa. They look very attractive when shares are falling 20%. The key always is what is your exposure level. Eg what is your Asset Allocation
The cost of your portfolio comes from a combination of factors that can include passive managers, active managers. You could even hold a portfolio of shares yourself and dont pay any fee for that. It depends on what involvement you want and what other outcomes you are trying to achieve.
This article is from Perpetual who are an active manager who have people travelling the country and the world speaking with companies about what they are doing, how they see the prospects for their business against competitors. Perpetual use that research to work our how well a company is performing, is it expensive to buy at its current share price based on how we see its profits growing. They then have to decide if they want to include that company in the portfolio compared to 100’s of others that they have researched. In the end they will only have between 50-70 companies in a portfolio and will review 200-400 companies to arrive at their preferred portfolio.
This is an article about the Australian Company Boral and the research Perpetual did before buying a share holding in Boral.
If you would like to have a discussion with us about your portfolio and what outcomes you are hoping to get we are a fee for service business and are happy to speak with new clients if you are looking to work with an adviser over the longer term.