The Chaser December 2009. Slide 2 General advice warning and disclaimer Any opinions expressed in this presentation constitute our judgement at the time.
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Presentation on theme: "The Chaser December 2009. Slide 2 General advice warning and disclaimer Any opinions expressed in this presentation constitute our judgement at the time."— Presentation transcript:
Slide 2 General advice warning and disclaimer Any opinions expressed in this presentation constitute our judgement at the time of issue and are subject to change. We believe that the information contained in this presentation is correct and that any estimates, opinions, conclusions or recommendations are reasonably held or made as at the time of compilation. However, no warranty is made as to their accuracy or reliability (which may change without notice) or other information contained in this presentation. To the maximum extent permitted by law, we disclaim all liability and responsibility for any direct or indirect loss or damage which may be suffered by any recipient through relying on anything contained in or omitted from this presentation. This presentation contains general information and may constitute general advice. It does not take into account any person’s particular investment objectives, financial situation or individual needs. It should not be relied upon as a substitute for financial or other specialist advice. It has been prepared solely as an information service for financial advisers and should not be distributed to clients. Before making any decisions on the basis of this presentation, you should consider the appropriateness of its content having regard to your particular investment objectives, financial situation or individual needs. Opinions expressed constitute our judgement at the time of issue and are subject to change. The presenter is a representative of MLC Investments Limited. MLC Investments Limited ABN 30 002 641 661 105-153 Miller Street, North Sydney NSW 2060 is a member of the National group of companies. MLC Investments Limited is the issuer of the MLC MasterKey Unit Trust. Information about the MLC MasterKey Unit Trust is contained in the current Product Disclosure Statement (‘PDS’), copies of which are available upon request by phoning MLC on 131 831 or on our website at mlc.com.au.
Slide 3 Don’t react to short-term performance In times of negative returns, there is a natural temptation to chase the perceived higher returns from other investment options. Studies show that investors who switch funds to the best performing asset class of the previous year, chasing higher returns, are often worse off than investors who maintain their investment in a balanced portfolio. Say you invested $100,000 at the end of 1980: –If you chased the best performing asset class from the previous year, your investment today would be valued at $1,135,928. A compound return of 8.4% p.a. –But if you stay invested in a balanced portfolio, your investment would now be worth $2,427,253. A compound return of 11.2% p.a.
Slide 4 The Chaser vs. a Strategic Balanced portfolio December 1980 – 2009* *Please refer to slide 7 for source data
Slide 5 The Chaser vs. a Strategic Balanced Portfolio* *Please refer to slide 7 for source data
Slide 6 Don’t react to short-term performance Simply by chasing returns, you would have generated a lower return on your original investment of over $1,200,000, and this does not even incorporate the additional costs incurred (both fees and taxes) of switching between products. We often create more volatility in investments by switching course and trying to catch the best performing asset class.
Slide 7 *Source information: The strategic balanced portfolio is constructed using the following asset allocation weightings: Australian Shares: 37% Global Shares: 24% Australian Bonds: 31% Listed Property Securities: 8% Cash: 0% All source data used in this presentation is based on the below listed indices used as a proxies for each asset class : Asset Class:Index/Proxy Australian Shares: All Ordinaries Accumulation Index, Global Shares:MSCI World Gross Accumulation Index ($A), Australian Bonds:Commonwealth Bank Bond Accumulation Index, Listed Property Securities:S&P/ASX200 Property Accumulation Index (Listed Property Trust Accumulation Index prior to July 2000), Cash:UBS Warburg Australia Bank Bill Index (RBA 13 Week Treasury April 1987).