Simple Answers to Complex Questions

I am often asked questions as to why I prefer one investment over another or why I structure clients’ portfolios the way I do, so I thought this month I would do a ‘deep dive’ to answer both questions.

In some ways, the simple answer is to say I make recommendations based on how I would invest these funds if I was the client, and I still knew everything I do know after forty plus years working in and around the investment markets.

That to me is the bottom line. However, it is so much more complex than that.

Times are always changing and with them, so too are investment environments. What might be true this year, might be very different next year or the year after. So, a lot of my time is spent researching the markets and looking to the future.

I often think of this as trying to see beyond the horizon so to speak, to see what changes might be coming in the future, what might impact on investments generally and then on sectors or individual companies.

I then look for key attributes within specific companies. A robust financial position, a history of paying high yielding fully franked dividends and of course the potential to make strong capital gains are essential.

To better explain that I have included articles this month that look at specific situations. Investments in the Commonwealth Bank, the big mining companies such as Rio Tinto, BHP and Fortesque Metal and specifically the telecommunication giant, Telstra.

There are pro’s and con’s with each of these investments. These articles though should give you some much needed insight as to why I have made the recommendations that I have regarding these important companies.

Sometimes, as in the big banks, it’s about sticking with proven performers that will continue to outperform the market. With others, such as the big mining companies, it’s about recognizing this recent downturn as being fleeting.

Sometimes it’s about recognizing good value at these prices and knowing enough about the company’s current position to believe it will outperform the market going forward and that there are good gains to be made.

I do hope you enjoy reading these insights into the how’s and why’s behind the recommendations I make.

If you know of anyone struggling with managing their savings as they move into retirement, please encourage them to contact me. If they mention this newsletter, I am happy to send them a free copy of my book The No-Regrets Guide to Retirement.

It could be a lifesaving, if not retirement saving, moment for them. 

Patricia Howard