Post on 18-Dec-2015
transcript
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Diversifying Your Portfolio
Chris RoseCrown Cycling Circle Investment Club
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Agenda• Introduction• Consider the true aims of an investment club• The need to diversify• The advantages of an investment club• Alternative investment opportunities
• Exchange Traded Funds and Commodoties• Fine Wine• Gold• Property• Others
• Getting started making alternative investments• Summary
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Introduction
• It doesn’t just have to be about stocks !
• Always lots of reasons NOT do to something
– fear of the unknown
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Aims of Our Investment Club
• Make money
• Learn
• Have Fun !……………………BUT IN WHAT ORDER ?
INVESTMENT CLUB NATIONAL CONFERENCE 2007
The Need to DiversifyPortfolio Asset Allocation
Stock
CashCommodities
Property
Bonds
Balance your portfolio according to your risk profile …… but keep it interesting !
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Why Diversify Within an Investment Club
• Spread risk of club portfolio• Broaden the spectrum of investments to
improve retention and interest• Produces great learning opportunities• Explore the unknown
– Leverage knowledge and experience of members– Curb over enthusiastic and irrational decisions
• Make Money !
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Alternative Investment Opportunities
• Exchange Traded Funds / Commodities
• Gold
• Property
• Fine Wine
• ……………others
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Exchange Traded Funds (ETFs)
• What is an ETF / ETC– Reducing risk– Accessing opportunities– Low administration costs– High Liquidity
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Examples of ETF’s
• UK property : iShares FTSE UK Property Fund (IUKP)
• China : iShares Xinhua China 25 (FXC) up 120% in Sept 06 – Sept 07
• Brazil : Up 95% in last 12 months
www.ishares.co.ukwww.etfsecurities.com
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Investing in Fine Wine
Why wine ?
• Depreciating asset• Established market• The model is well understood• Fun doing the research
You can drink it !
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Investing in Fine Wine
How it works
• Initial Finite supply• Growing demand• Later a dwindling supply
…All leading to an increase in the value
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Investing in Fine Wine
Picking a good vintage
• Broker recommendation
• Robert Parker Score 95% http://www.erobertparker.com/
• Wine Spectator Magasine
• Online research – www.decanter.com
INVESTMENT CLUB NATIONAL CONFERENCE 2007
First Growth 1990 Vintage
Parker Score10 year % increase
Mouton Rothschild
87 278
Lafite 92 355
Haut Brion 96 725
Latour 96 725
Margaux 100 769
Source : Morgan Aston Ford
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Investing in Fine Wine
Practical issues• Find a good broker
– Storage– Market reports– Low Commission– Proactive
I use Morgan Aston Ford : http://www.mafltd.dircon.co.uk/
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Gold
• Gold is a commodity and traditional home for our money in times of trouble, easy to track and highly liquid.
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Accessing the Gold
Krugerands under the bed of every member !
• Gold Coin – Sovereign or Krugerand• Gold Bullion• Mining eg HOCHSCHILD MINING PLC
(HOC)• ETF – Gold Bullion Securities (GBF)• Superb online tutorials
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Gold Bullion
• Bullion - • “Good Delivery” bars
• Physical possession
• Part or whole bars
• Online – eg www.bullionvault.com
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Property
• UK property vs Overseas property
• Location location location !
• Controlling the passion
• The structure of the club and ownership
• Poor liquidity
• Long terms costs of ownership
• Use ETF ?
INVESTMENT CLUB NATIONAL CONFERENCE 2007
…………..Others
• Commodities http://www.etfsecurities.com
• Venture Capital Trusts
• Film
• Land
………………
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Where to Start
• Consider the asset allocation of the club• What type of alternative investment
inspires you• Detailed research into an investment
– Club structures– Goals– Exit strategy
• Invest and Monitor
INVESTMENT CLUB NATIONAL CONFERENCE 2007
Summary
• Stocks and shares are not the only form of investment opportunity open to investment clubs.
• You will gain from the learning experience, you will have a lot of fun, and it may even make a profit !
Health warning : All investments may go DOWN as well as up and these ideas are no exception
i.e. don’t blame me !