The Six Park portfolios were slightly down for the month. Most asset classes declined a little, with Australian shares and the cash yield contributing a small gain, leaving portfolios with a monthly performance of -0.5% to -1.5%. From time to time monthly performance will be negative, but it is pleasing that the Six Park portfolios still finished the year with a great return overall of +2.6% to +11.5%.
At Six Park we invest over seven different asset classes; Australian shares, international shares, emerging markets, fixed income, global property, infrastructure and cash. To read more on the performance of each asset class over the year ending June 17 click here.
My first podcast is now up. I speak with Damien Sherman, Head of ETF Capital Markets at Vanguard and we discuss ‘WTF is an ETF’. Click here to check it out.
This month’s book is The Barefoot Investor by Scott Pape. It’s identified as a money guide - but to be fair it’s more than that. It’s a motivational self-help book that explores finance, budgets, investing... even a little relationship advice too! It’s easy to understand with fantastic analogies to make the complex understandable. I could not think of a better gift to someone (but full disclosure: my wife didn’t share my opinion of this!).
However, as much as I love and recommend the book I should say that I disagree with just a few of Scott’s points he makes.
Scott advocates investing in good-quality Aussie shares, without going into much detail on the benefits of investing in international shares such as US and emerging
markets. My issue with this is that Australia now has not had a recession for 26 years — a new world record. Investing only in Aussie shares (either stock picking or via index) has been a great call over recent history, but we’re now in uncharted territory for length of time without a sizeable downturn.
Howard Marks, one of my favourite investors, has two rules when it comes to investing:
Rule 1: Most things will prove to be cyclical.
Rule 2: Some of the greatest opportunities for gain and loss come when other people forget rule number 1.
Australia does have some great companies, but by only buying stocks on the ASX you’re increasing your risks and potentially putting all your eggs in one basket. Prices typically revert to their mean, and a generation of Australians haven’t experienced a recession nor the sell-offs that may follow.
At Six Park we recommend investing over diversified asset classes including an allocation to Australian shares, but also international shares, emerging markets, fixed income, global property, infrastructure and cash to manage risks to certain exposures.
“Read everything and start young."
- Warren Buffett.
Buffet reportedly reads 500 pages every day. Just reading one tenth of this is hard enough to maintain, but investing in yourself with some level of habitual reading is one of the best investments you can make. You could try The Barefoot Investor's book, or for something shorter read this great recent piece on one of our clients.