Client Objective & Financial Circumstances
In providing advice we consider several aspects of your personal and financial circumstances. We will assist you in constructing a portfolio of stocks listed on the Australian Stock Exchange (ASX) and cash appropriate to meet your investment objectives and needs.
Most stock selections are based on our Quantitative Investment Strategy (QIS), which ranks stocks taking into account: profit and loss and balance sheet data, market liquidity, share price and relative strength. This QIS has the advantage that it is disciplined and objective, therefore the selections are free from any personal or business associations and are not tainted by previous experiences with particular stocks. The strategy focuses on the top 400 (20%) stocks by capitalisation and at times will include names that may not be familiar to you, however they are well researched by the top rating analysts and most are institutional quality.
Volatility is controlled by holding a minimum of ten stocks and reviewing the portfolio every three to four months. It is the responsibility of the client to initiate these reviews by contacting our office.
It is important that your stocks be managed actively. Because of the constantly changing fortunes of stocks depending on a wide range of factors, stocks can move down the rankings over time. We have found that the best results come from periodically replacing low-ranked stocks with higher-ranked stocks.
It may happen that we occasionally recommend purchase of a stock that you have sold previously, this may even be at a higher price than the price you sold the stock at previously.
Clients must be prepared to sell stocks whether they show a profit or a loss. Our investment policy is based on a portfolio approach, where winners compensate for losers, it is not possible to make a profit on every purchase. You should also note that when you sell a stock you pay brokerage on the buying and selling, and you give up all entitlements to ownership of that stock, including any future capital gains or dividends paid.
When the market is extremely volatile or in decline, shareholdings should be reduced and the funds held in cash until the markets stabilise.