Real Case: Small Business & Investor

Jeff – still working, and needing to steadily build a portolio for his and his family's future...

The Client Circumstances:

Jeff is a builder in his early 50’s who runs his own business, and has been an Ascendia accounting client for a number of years.

Whilst he has investmetns in commercial and residential rental property, he also diversifies his asset holdings by having a portfolio run by Ascendia’s investment team.

 

The Objective:

As Jeff is around 10 years away from retirement, his objective is to grow his portfolio in a steady manner.

He is risk averse but wanting a more balanced approach than defensive due to his relative youth.

 

The Portfolio Advice and Management:

Therefore, Jeff’s portfolio asset allocation has been advised and is managed as a more even balance (50/50) between risk assets such as shares, and defensive assets such as income securities, term deposits, and cash.

Our job is to try to get the best assets for him in this allocation, in terms of maximum return for the minimum risk or the best "risk adjusted return" we can obtain within his overall 50 / 50 balanced required investment asset allocation.

We do this through selection of assets, by not buying trnedy assets that dont stack up, by not being emotionally reactive to fluctuations in the market nad ny researching hte underlying value of assets as well as their underlying economic exposures. Our job  for this kind of portfolio is to avoid wherever possible assets that will be subjected to substantial competition or do not have pricing power in their industry.

 

The Result:

A total gross return in 2013 of 18.11%, including imputation credits. And this return is not a one off result for Jeff, he has obtianed similar risk adjusted returns in similar investment markets in the past.

The balanced asset allocation provided Jeff with around half the risk and volatility of the general share market, yet still provided a very solid overall return.