These examples are real but our client’s names have been changed. Each result is different because each individual’s situation is different, even though some of these individuals may have similar circumstances to your own. This means that you can expect different results to that below. As always, past performance is not an indicator of future performance.
A +16% return when the ASX 200 produced -3%
Mr Simms is an engineer from QLD, several years away from retirement and is trying to build his SMSF so he and his wife can retire comfortably.
As he works full time, he isn’t able to put enough effort into making it grow.
With retirement getting closer every year, he can’t afford to make any major mistakes, which is why he engaged Fairmont Equities to manage his portfolio.
As he’s still working full time he can afford to take up the odd trading opportunity that comes along.
We ensured he held a core portfolio of blue chip shares, and we have then been doing some medium term trading alongside that. We also managed to exit his REIT’s during 2016 before the sector started to get sold off later in the year. This has helped ensure that over time his portfolio balance has been trending higher.
In the two years he has been with us, his balance has grown from $533,000 to $630,000 after fees.
This represents a return of 16% compared to the ASX200 returning a negative 3% in that same period of time.
As Mr Simms approaches retirement, we will adjust his strategy to reflect his need for greater capital preservation and income generation.
Generating Income while preserving Capital
Mrs Read a retired farmer living in Northern New South Wales, relies entirely on her SMSF as an income. She’s single and has no dependents.
Mrs Read understands that by just drawing from her super, and not topping it up consistently, she may well outlive her money.
She’s been investing in the share market for many years and has dealt with different brokers, including large firms, over the years. However she wasn’t satisfied with neither the approach nor the returns.
Also she was very clear that looking after her portfolio every day wasn’t what she wanted to do with her time.
Objectives
Mrs Read was very clear that her portfolio could and should perform better. She also believed that her previous advisor didn’t generate enough income from the portfolio. In her view some of the selected stocks were too risky for her circumstances.
How the Objectives were achieved
Together we decided on the goals Mrs Read wanted to achieve, put a strategy into place and followed through with the tactics in order to achieve the best possible outcome for her.
Mrs Read’s main aim is to ensure that there’s a focus on income generation and capital preservation.
The first thing we did was trim back or eliminate positions which were too risky for her circumstances.
There were also some good stocks in the portfolio but the position sizing was too large, and some of these were generating yields which were too small.
We decided to reallocate some of this capital into new sectors which we believed would do well, and ensure that we were buying companies that had earnings growth and avoid any speculative positions.
What we then did over time was ensure that we were a bit more active in a volatile market.
This means that as stocks produced great returns but perhaps ran too far, we discussed with Mrs Read the opportunity for her to lock in a profit along the way and reallocate the capital into a new opportunity. This ensures that we are moving ahead over the longer term.
Key Results
When we took over the portfolio it had a balance of $615,000.
Over the next 2 years we were able to grow the portfolio to a balance of $671,000.
Over this 24 months period, Mrs Read withdrew $84,000 in cash for her pension.
In actual numbers Mrs Read’s wealth grew by $140,000 after fees. Over 24 months this equates to a 22.8% return.
It is worth noting that over the same period the ASX 200 returned a negative 3%.
We continue to help Mrs B by actively managing her positions, with a focus on income generation and capital preservation to ensure she doesn’t outlive her money, has options should she require aged care and can leave a legacy if she wishes.
A +13% return while the ASX 200 produced -3%
Mr Johnson owns a successful firm in Sydney and has been investing in shares for many years.
A large broking firm had previously handled Mr Johnson’s affairs. Unfortunately the advisor in charge did a very poor job and lost a few hundred thousand dollars for his client over a couple of years by taking on too many speculative positions.
Mr Johnson first came across Michael Gable on one of his many TV appearances, he liked what he heard but decided to observe and watch Michael for some time. Mr Johnson became convinced that Michael was the advisor he wanted to work with. Michael’s temperament and the recommendations made sense and stood on solid ground.
Objectives
Mr Johnson is interested in steady gains that increase his wealth, investing in stocks that align with his risk profile.
Mr Johnson also wanted to recover the losses suffered due to “bad” advice.
How the Objectives were achieved
Mr Johnson transferred his entire portfolio, worth $1,860,000, to Fairmont Equities.
The first steps we took were to remove the riskier positions by unwinding “bad” positions that still existed by picking the right moments to get a better exit point. We then reallocated funds into better performing sectors and stocks.
The market was quite flat at the time. Fairmont Equities approach was to be active in this market environment with the aim to slowly and steadily build the portfolio up again.
Mr Johnson is still earning a large income from his business and will not need to rely on his share portfolio to provide an income for many years. Because of this, Mr Johnson has instructed us to also inform him of any short – medium term trading opportunities that may come up from time to time.
Over time we have had some trades for Mr Johnson, some winners, some losers, but overall we have been able to reverse the declines and instead see steady growth in the portfolio.
Key Results
Over a period of 2 years, we were able to claw back $246,000, after fees paid. This equates to a more than 13% return so far.
Mr Johnson is very happy with what we’ve been able to achieve on his behalf, in particular given that the ASX 200, in the same period, returned a negative of 3%.
Streamlining led to growth
Mr Wong has been investing in the share market for a number of years.
However as a busy business owner he hasn’t always paid enough attention to his portfolio. By not noticing when stocks fell substantially and selling out early, Mr Wong lost capital.
Having seen Michael in the media, Mr Wong trialled his research and felt Michael would achieve better returns.
Mr Wong asked Michael to manage both his personal portfolio worth $596,000 and his SMSF worth $762,000.
Being several years away from retirement, Mr Wong felt he could afford some risks with his personal portfolio while being more conservative with the SMSF investment strategy.
Michael executed a strategy whereby he streamlined the personal account from 40 stocks to 20 giving Mr Wong more flexibility to take advantage of “trading opportunities”.
Stocks in the SMSF were weighted towards high yield and franked dividends to take advantage of tax breaks.
Subsequently Mr Wong as seen a growth of 10% in his SMSF and 11% in his personal portfolio. Over the same period the ASX 200 produced a negative 4% return!