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J T.
J T.
Potts Point, NSW
4 Likes
0 Followers

Hello.

I'm not sure if I should be worried about my investments at the moment, SUPER & INVESTMENT ACCOUNT with what happened last week in the US? Theres been a few thousand wiped from the balance being in INTERNATIONAL SHARES and a few other things.

I've seen articles saying the worse is yet to come .. or is it just the media fear mongering .. should i switch everything to cash or something less risky .. or am i falling into the trap ?

Whats your opinion ?

Thanks,

J.

9 months ago

Responses

Hi J,

Lots of questions going round in my head. There could be worse to come & there could not be - no one will can tell you with any certainty.

What's important is that you are invested appropriately for your age, your needs from your investments & where you are at financially.

I uploaded the following to YouTube for my clients early last week, you might find it of interest.

https://youtu.be/SAiHKO8HzdM

Regards
James


Comments

Hi James,

thanks for your response.

In your video you mentioned your steering clear of the US Market ATM (from my understanding), the country allocation for my International Shares 60.7%. What would your general advice be about that ?

Thanks,

J.

Hi J,

In the video I do say that for some clinets we have been reducing US exposure. In particular those are ones that have been heavily invested in the US for some time and are drawing down on their investments (usually, but not always, via a pension from super).

Others (in particular those still working and building up their assets) we have been regularly investing in US markets as well as most other markets around the world - and continue to do so. These are clients that are still building up & will be for the next 10 years or more so a short term drop in markets (even a drop for a few years) isn’t a concern for them. They all understand the long term view.

Please reach out if you wish to discuss more.

Regards
James
Senior Adviser - First Financial
03 9909 5826

Hi J,

2017 was an atypical year. We expect 2018 to be another unusual year for markets, one which will pose substantial risks as latent market risks increase, but also one that poses opportunity for good active management to add value.

Now, how you invest will depend on your appetite for risk (ie. are you kept awake at night worrying about what the markets are doing?), your timeframe and what you want this money to achieve.

At WLM, we feel we are well placed to navigate these market conditions and currently have a good understanding of market conditions, although it will probably be very challenging at times. We continue to work hard to identify and profit from the few remaining pockets of value and to regularly re-adjust the portfolios as needed and as opportunity arises.

Hi J T,

The above are some great responses to your question.

I would like to also add in regards to your question "should i switch everything to cash or something less risky .. or am i falling into the trap ?". Be careful of this as right now the losses are not on paper and once you switch investment options you are then crystallising this and realising the loss. It is always best to speak with a Professional before making any drastic decisions as a wrong move may cost you thousands of dollars now and in the long term.

A good Adviser will be able to identify how comfortable you are with risk, set a tailored investment strategy and make sure your current fund is suitable.

If you would like to discuss this further, please don't hesitate to contact me on the below details.

Thanks,

Ronald Pratap
Principal Financial Adviser
RP Wealth Management
Level 2, 351 Oran Park Drive, Oran Park 2570
T: 02 9188 1547 M: 0434 502 079
E: ronald.pratap@rpwealthmanagement.com.au
W: www.rpwealthmanagement.com.au

Hi J,

I had a review meeting with a client in December 2016 and he was saying he was really worried at that point about investing in equities (and in particular the US) because Trump had just been elected and there was a lot of media around what this madman might do to markets.

At that time, I explained to him my philosophy that you can't predict or forecast markets, remaining diversified and disciplined is essential and that the media is there to perform 1 job - fill in the empty time between advertisements. Since then, his portfolio (which is a mix of Australian and international shares, property and fixed interest) is up about 13% and switching to cash would have given him maybe 2.5%. This story isn't to say that we're going to get that again, the point is we don't know and can't forecast markets and making irrational changes to portfolios WILL reduce your long term investment success.

I had a new client email me over the weekend saying their portfolio is down from when they invested with me (which was fairly recently so has experienced this recent fall in markets). I told him about my first client who invested in a geared portfolio back in 2007, investing their own money and borrowed money, and regularly invested every month. After the first 15 months or so, markets had an approx. 50% fall, but stayed committed to the plan and continued every month with the disciplined process (I'm so glad my first client was so disciplined and easy to work with). He now has a very profitable and large investment portfolio and in the last 12 months has achieved an approx. 20% return (he has a very aggressive portfolio). It would have been SO easy to throw in the towel in the early stages, but by remaining disciplined,
he has been able to reap the benefits of the investment plan with very successful outcomes.

Making changes to your portfolio trying to forecast markets will impact your long term investment success. You might guess right once or twice (just like I might be able to pick red or black on the roulette table a couple of times in a row) but eventually, you won't guess markets correctly, plus the cost (tax and transaction costs) will reduce your long term returns.

This is not to say your portfolio is right and just leave it, you've haven't given much information about your current portfolio, investment strategy, mix of asset classes and most importantly your current financial position and your long term goals but don't make changes just because markets haven't moved the way you wanted them.

If you would like to have a one on one intro meeting to discuss in more details and I can present my investment philosophy, please email me at glenn@precisionwm.com.au and I'll schedule an online meeting with you.

Cheers,

Glenn

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