Understood. Currently not looking at any further investment products other than what I already have in superannuation. I'd like to do it myself. Have been all my life and would like to think it's still possible. Bonds are a possibility. I'm not sure about securities or mutual funds. The stock market is fairly volatile and I have money invested there already and don't want to go down that path further.
What's the investment property market like in Sale?
A "good investment advisor" is a very rare commodity.
Coming from the fund management side and regularly trotted out to see the "Investment Advisory groups", or do talks at their conferences - I have come across maybe 3 or 4 that I would give time of day (unfortunately). From those dealing with High Net Worth to those at the other end - the common thread appeared to me that they were only there to 'clip the ticket'.
Too many follow-up questions were "what trailing fee does your fund ABC pay?", or "Are you going to be holding Advisor Conferences in the States?"
It was all about them and not either the nature of the funds nor how they could be a match for SOME clients.
The saying "A rising tide lifts all boats" is the one to have in your mind at all times. Leverage is a quick way to make money and equally as fast in losing everything. I knew a graduate, out of uni 2 years ahead of me. Leveraged to the hilt through 1985, 1986 and 1987. Net worth $5m+ in Sept 87, put non-refundable cash deposit of AUD$100,000 on a Ferrari in August 87.
Sold everything on October 20, 1987 and net wealth was around $15,000. By October 31 he calculated it would have been -$1,000,000 to -2,000,000 as several stocks on the Tasmanian 2nd Board had not traded since the 20th.
He tried to sell his Ferrari deposit, first for $50,000, then $40,000 etc etc. Could not get a taker for even $20.
He worked in wholesale stock broking and I in investment management.
Many stocks on the Tasmanian 2nd Board did not trade from the day before the crash to when they were eventually de-listed in late 1988. This is what started up a couple of businesses that would buy any share at a price (if permitted by the respective listing vehicle) for something like 0.01 cents per share. Only then could you claim a tax deduction as you had realised the loss.
The lack of a recession in Australia since 1989/91 has allowed many companies (listed and unlisted) the luxury of existence. There has not been (other than the rolling recession through some resource sectors) the natural cleansing cycle where the poorly managed die off to leave a more healthy choice.
The very same can be said about Investment Advisors - either at the retail or wholesale level (and fund managers).
Time and time again, I witnessed even the top advisors (dealing with CSS/PSS/Unisuper/REST/ARF/STA/CBUS etc etc) paid millions in fees - falling into the herd towards the peaks.
Long story short - cash earning 2.5% can look like a MAGNIFICIENT return when share markets are showing
-20% for the one year return, even better when they show
-50% in Australian Dollar terms.
I am NOT an investment advisor, and AM not telling you what to invest or not invest in but some useful rules are:
- Write down 3 reasons why you think it is a good investment to make.
- Only invest what you can afford to lose.
- Only invest if it can be there for at least 3-5 years.
- It generally never looks better than just before the peak.
- If it is such a great idea - why are they telling you about it?
- If they are so successful why are they still working? Humanitarians - I don't think so.
- All the eggs in one basket can lead to much anxiety and distress.
- Ask "What can go wrong?" NOT "What can go right"
Personally the way I ran money was to ask "What's changed?" whenever my colleagues would suggest we needed to change something. Most stopped when every time they came I got them to write down their suggestion, date it, sign it and bet $1 of their own money on it, put the time frame and what the current levels in whatever market they were talking about.
After 7 or 8 months, and I had collected about $40 dollars and paid $1 - the rate of suggestions dwindled.
That's just how I do it. My best decisions (leading to 30x and more return on investment) have been to do nothing 99.95% of the time.
Brokers and agents may not like that, and neither does the tax man/lady/person.
A few times, in the interests of research, I have taken up the offers for a free consultation. Time may be moving on but the quality does not appear to be.
