Forum Archive Index - January 2001

["Dannie Hawkins" <dannie@es.co.nz>]

 

Dear John....

 

A few comments:

 

Long term should be at least 10 years.

 

Looking at your portfolio it seems that you have been sold poor advice. Your adviser should have explained listed trusts properly to you - they invest in other companies and charge a management fee. Their share price is also subject to market fluctuation.

 

Your portfolio seems unstructured, with a large weighting to Asia/Japan. Have you got a formal plan? with asset/country allocations set out? Japan in inself is not a problem for some of your portfolio, if you have a good stock picking manager like Kerr Neilson in charge.

 

Just a note on "investment trusts" they have a place in many portfolios, but are not the be all and end all.

They are understandably popular with share brokers and can be temporarily? tax efficient, but are often subject to wide swings about asset backing. They often trade at big discounts to "value" giving a double whammy when markets drop. Combine this with no Kiwi dollar hedging and blood can be all over the floor for quite small drops in the markets.

 

You may be better to use OICs - similar tax rules, higher annual fees but lower risk.

 

Australasian based unit trust managers also have their uses.

 

It would probably pay for you to get an adviser who is paid on a performance linked basis, rather than transaction oriented way. 

 

Hope this helps

 

Dannie