by Ted Richards At Six Park we invest over seven different asset classes. Our experienced investment committee oversee Australian shares, international shares, emerging markets, fixed income, global property, infrastructure and cash.
Asset classes
The ASX200 fell approx. -2.8% in May, whereas the Six Park portfolios gained between +0.3% (in our conservative portfolio) and +0.5% (in our high growth portfolio). This is one of the benefits of having a diversified portfolio of assets. Our two best performing assets for the month of May were emerging market equities (up +2.6%) and infrastructure (2.4%).
Why?
Chinese shares make up a part of our emerging markets offering, and during May Chinese shares benefited from the countries unexpected injection of US$25 billion into their local banks. This was one of the catalysts for the emerging market increase, whilst infrastructure increased for a few reasons, one of which was on the back of the Trump administrations continued rhetoric.
Back home in Australia the Federal Government imposed a bank levy which drove the banking sector down more than -11%.
Book of the month
Unshakeable by Tony Robbins
I’m not sure why, but I had pigeon-holed Tony Robbins as a motivational speaker that wasn’t for me (could be his goatee beards). Credit where credit is due, I wasn’t aware of is his ability to communicate about investing in a clear and understandable way. In the book Tony highlights the dangers of hidden fees over time and how you can overpay for underperformance.
One chart from the book especially resonated with me;
Two people (Kate and George) both aged 35 have saved $100,000. Both are able to earn 8% average return each year. However Kate pays .5% in fees while George pays 2% fees. Kate retires at 65 with her investment at approx. $865,000 while George’s investment is just $548,000. In retirement George withdraws $60,000 per year which runs out by age of 79. But Kate has a completely different retirement. She is able to withdraw $80,000 per year and her investment lasts until she is 88!
Quote of the month
“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
Albert Einstein
(Full disclosure: There is debate as to if Einstein actually said this or not. Whether he said it or not I still like it, so much so I wish I was the one quoted as having said it!)
Six Park
Create an investment with Six Park of $10,000 which equates to a total annual fee of just .5% (on a $10,000 investment that’s just $50). This small fee includes your risk assessment, portfolio recommendation, execution of all your trades, monitoring of portfolio and re-balancing trades. There are also very low indirect fees that ETF providers charge and these are embedded in the ETF share price.
That’s it for this months Six Park Super Update. I’ll be putting these out each and every month to keep you informed about investing and what we’re seeing across our asset classes.
To read my piece on ‘What the hell is robo advice’ click here.