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Financial Happenings Blog
Monday, November 17 2008

It would be an absolute understatement to suggest that 2008 has been a difficult year for investors and their financial advisors.  These difficulties have confirmed to us the importance of regular dialogue with clients regarding their specific portfolio as well as more generally about investment markets.  It has also highlighted to us the importance of being totally available for client questions and discussions.  We both comment that these phone discussions, meetings and email discussions are the best part of our work.

It is hard to give prospective clients a sense of what this ongoing communication involves so we have tried to provide a few more details on our Portfolio Management Service & Fees page outlining the communication we have had with our clients over the past 12 months.  For those interested, a summary of these points of contact follow:

November 2007 - Provided a copy of an article written by Alan Kohler and discussed the topics of international share investments including currency hedging, the non acceptance of commissions, the problem of ownership bias, avoidance of hedge fund investments and an explanation of why we use wraps.

December 2007 - Provided an article providing insights into why we build investment portfolios the way that we do.

January 2008 - Provided copies of a couple of articles along with thoughts on on the current market volatility, income planning, cash & fixed interest part of portfolios, the importance of discipline and the risk of overreaction, the resilience of sharemarkets, the Australian advantage of income and a look at property trusts.

February 2008 - Provided thoughts on the following topics - importance of cash and fixed interest investments, the strength of company earnings in the sharemarket (PE ratio), the growth of company earnings, the risk of selling share investments or changing strategy, whether stock picking or "normal" managed funds provide a better return in the current environment, and avoiding the financial collapses that seem common.

March 2008 - Discussed an article written by Ross Gittens,  looked at the underperformance of an alternative "value" investment approach taken by Clime Capital, discussed the issue of companies and investment schemes under stress, and pointed out that sometimes the best investments are the ones you don't make.

March 2008 - Held client seminar looking at current market movements and our response to the current situation.

April 2008
- Sent out March quarter portfolio reviews.

June 2008 - Discussion of the following topics - recent broker consensus reports on the Australian share market, Vanguard's quarterly report on investment markets, what else you could be investing in and why we were not recommending these products, a number of articles looking at our investment approach, upcoming income distributions, 3 booklets produced by Vanguard on realistic sharemarket expectations, index investing and investing for income, and implementation of our fee reduction program.

July 2008
- Discussion of the following topics - scenario planning if the share market were to fall a further 30%, expert stock picks and their subsequent performance, and commentary on investment performance within portfolios.

August 2008 - Sent out 2007/08 income report and included a discussion of whether we should be using unlisted assets in portfolios along with an article putting the current market situation into perspective.

Early September 2008 - Discussion of the following topics - performance for the quarter so far including the impact of the fall in the Aussie dollar, look at earnings growth following the annual reporting season, an article produced by Dimensional looking at how their trusts had held up over the year ending June 30, Vanguard's Australian Sharemarket Volatility Chart, an article looking at past quotes regarding "unprecedented" events that tested investor confidence and an update of our referral program and KIVA lending.

Late September 2008 - Discussion of the following topics - market commentary, our investment philosophy, Macquarie Bank and our approach to reduce costs of the bsuiness and in turn costs for clients.

Late September 2008 - Held client seminar and teleconference looking at the credit crisis and our response to these developments.

October 2008 - Sent out September quarter portfolio reviews along with a discussion of the problems in markets, the government guarantee of bank deposits and looking at a recent article written by Warren Buffett.

Scott Keefer

Posted by: Scott Keefer AT 08:35 pm   |  Permalink   |  Email
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