BY BRAD MENDEL
We are now back in Sydney after a great research trip around the world where we confirmed our investment views outlined to you last year (under our Rethink. Re-evaluate. Reset Report), but more importantly have concluded that due to the changes in economics, geopolitics and demographics, we are entering a PARADIGM SHIFT in society which will affect all investment decisions.
We started our research trip with a full day tour of some of the properties invested in USA real estate funds in California, attended a three-day Strategic Investment Conference in San Diego, had full day meetings and presentations in Geneva and Zurich with our International Banking Relationships, attended another three-day conference at Burgenstock, Switzerland and finally attended meetings in London with International Fund Managers before returning to Sydney. Overall, we had in excess of 80 meetings and/or presentations and have been analysing the contents in detail.
We set out below just some of the comments made to us for your benefit and:
The 5 most important points are:
Other significant points raised at the conference are inter alia:
For the past 10 years, investment portfolios have generally risen well and we have got used to the excellent returns achieved with relatively low levels of volatility. To me the most interesting comment made on our trip was by Grant Williams who said, “the magic of compounding works both ways.” So, after 10 years, a million dollars invested in 2008 giving 8% p.a. net returns would value your portfolio today, in 2018, at over $2 million. If compounding works in reverse, that $2 million portfolio today will, on the assumption of an 8% p.a. decline, be worth half of today’s value in 2028. E.g. down to $1 million.
We are very cognisant of this fact and that is why we have been and are continuing to turn the dial away from investments directly correlated to the listed stock market and continue to diversify to protect your capital.
We are at the beginning of a PARADIGM SHIFT and accordingly, should you wish to discuss any of the above, please do not hesitate to call any of our Directors or arrange a meeting at your convenience.