Financial advice: Navra or Whittaker

[doozer]

Forumites,
I was wondering if anyone could assist me in trying to decide who would be a better financial advisor: Whittaker MacNaught or Navra Financial Services? We have 4 IPs so Navra may suit us in that regard however their planners in Qld seem inexperienced in general matters of financial planning. Whittaker MacNaught have an excellent reputation but may be anti-property investment. Can anyone share their personal experiences with either Advisor or their consultants. Many thanks.

[MichaelW]

Doozer,

I can't vouch for Whittaker, but I can put a strong vote in for Navra Financial Services. Their approach is much removed from your average financial advisors, and I've been threw a couple over the years. Steve's team is very IP friendly and use an investment structure across the three categories of IPs, shares and cash to ensure maximum leverage whilst mitigating risk of servicing.

Steve runs regular one day courses in Sydney and Brisbane, and at $170 odd its well worth the paltry fee for what you'll get out of it. So, I'd recommend going to his next course and then using that knowledge to make an informed decision.

Cheers,
Michael.

[doozer]

Thanks Michael. I have met one of the Navra Consultants and although he seemed very switched on his lack of financial planning qualifications did concern me. Also I'm not sure of their credentials re the whole financial package ie tax, cash accounts, insurance, etc. I know they are good re IPs but I need assistance for the whole lot. Have they been helpful in this regard?

[MichaelW]

Doozer,

I'll be getting my full financial plan done with them sometime this month so will let you know for certain after that date.

There is no doubt that Steve's personal speciality is investment structures and particularly his share trading fund. Having said that, his IP knowledge is excellent and he has arrayed a team of experts to cover off all the other stuff like legal structures etc too.

Not sure about the insurance bit, but its something I was going to ask anyway when I got my plan. I have D&PD and Life insurance, but was wondering about income protection and what else?

Given my personal needs they fit the bill very well.

Cheers,
Michael.

[luckyone]

Hey Michael,

Out of interest, who did you see when you went to Navra. I met up with Steve Navra and Mark Laszuck (I think that was his surname) last Friday. Thought they were both very professional. I had already been to the course back in March, so was just wanting to see if they could help me with my situation. They have given me a couple of options to think about but just basically said to get rid of my home loan ASAP and then worry about buying more IP's.

[MichaelW]

Luckyone,

Yep, that's them, the two main guys in Navra Financial Services. I had met Steve previously and chatted with him on several occassions.

Pretty soon I'll be a full fee paying client so won't have to feel so bad about asking him for detailed advice then! :D

Very impressed with them so far and they seem completely above board with a proven track record and reasonable fee structure. And I'm a hard marker too!! Steve even hands out his personal business card at the course and means it when he tells you to feel free to call him any time. He loves his work and is passionate about helping people realise the same success that he has.

Cheers,
Michael.

[doozer]

Michael,
If you don't mind me asking, what kind of investments did Steve & his offsider advise for you? I met up with a Brisbane adviser the other day who was also very professional, despite the lack of financial qualifications. As mentioned I am looking for a full financial package, maybe more IPs down the track & some margin lending, is this the kinda thing they were advising?

[Simon]

Steve recommends property as the main investment vehicle because of the level of gearing available.

He is also keen on shares - especially managed funds.

Whilst he discussed his fund with us on Sat he made a point several times that there were many other funds to choose from.

I got a number of things from Sat and am already making some changes based on some of his ideas. Will be meeting with him again.

Cheers,

[Les]

G'day Doozer,

Whittaker MacNaught have an excellent reputation but may be anti-property investment. Can anyone share their personal experiences with either Advisor or their consultants.
In my earlier years in Brisbane (1984), Noel Whittaker actually owned a Real Estate company in Logan city. Then, sometime later, he exitted stage left, and opened Whittaker McNaught. From that time on, he seems to have been somewhat against RE. That would've been late 80's - early 90's - and property in Logan went into a huge slump...... That could've hurt....

His books have some good advice re the basics - e.g. compounding - read "The Money Train" (special section at the back of "Making Money - Made Simple). Of course, he's moved on from there... and is often spotted at various "money expo's". But, yeah, his slant seems to be AWAY from RE, from what I've seen.

A search for Whittaker might provide a bit more - I'm sure he's been discussed a few times.

Regards,

[Lplate]

Michael
What is the cost for the consultation?
Any follow-up incl?
LP

[thefirstbruce]

I spoke with two people from Whittaker McNaught about 3 months ago. They were young and seemed very inexperienced. I got the impression they did not have a grip on total investment structuring. Rather, they were into woodchips and super.

I haven't had anything to do with Steve Navra, but you might want to check his Navra Funds April performances- http://www.navrainvest.com.au/index.asp?content=commentary

[FelicityShagwel]

Did he mention what those other funds were?

Steve recommends property as the main investment vehicle because of the level of gearing available.

He is also keen on shares - especially managed funds.

Whilst he discussed his fund with us on Sat he made a point several times that there were many other funds to choose from.

I got a number of things from Sat and am already making some changes based on some of his ideas. Will be meeting with him again.

Cheers,

[Simon]

No - but then the discussion didn't go that way. I think he was meaning that his fund wasn't the only option should you feel a managed fund be a part of your portfolio.

I did like his fund tho.

Cheers,

[Glebe]

It should be worth noting that should you wish Steve Navra to be your financial advisor and you have more than $250 000 to invest in his Australian fund, you can only enter the retail fund not the wholesale fund. This is because as your advisor he is entitled to commission on the entry fees. This took me by surprise.

[doozer]

When I say that Noel Whittaker may be anti-property investment I don't mean to single him out as I think quite a lot of financial planners are in the same boat given that they rarely get paid any sort of remuneration for advising to buy IPs. Having said that any good financial planner should be advocating diversification but tailoring the plan to the client's preferences, in my case property as a vehicle for wealth creation and other asset classes to spread the risk (& perhaps generate more income through something like the Navra fund).

I was hoping someone out there has had a financial plan drawn up from either Navra or Whittaker MacNaught & is willing to share their progress etc..

[Simon]

When I say that Noel Whittaker may be anti-property investment I don't mean to single him out as I think quite a lot of financial planners are in the same boat given that they rarely get paid any sort of remuneration for advising to buy IPs. Having said that any good financial planner should be advocating diversification but tailoring the plan to the client's preferences, in my case property as a vehicle for wealth creation and other asset classes to spread the risk (& perhaps generate more income through something like the Navra fund).

I was hoping someone out there has had a financial plan drawn up from either Navra or Whittaker MacNaught & is willing to share their progress etc..

I can honestly say that I have never heard of a Financial Planner as pro property as Steve is. Except for a dodgy pair who were really Qld property marketers and only recommended their own stock.

As far as advisor comissions go most advisors can sell his fund and can charge up to 4.4% fees. Steve charges 2.2% or less depending on the amount and the relationship.

Cheers,

[MichaelW]

It should be worth noting that should you wish Steve Navra to be your financial advisor and you have more than $250 000 to invest in his Australian fund, you can only enter the retail fund not the wholesale fund. This is because as your advisor he is entitled to commission on the entry fees. This took me by surprise.Glebe,

Thanks for the heads up. The people at Navra just called me and I've booked to see Steve in person for my initial consultation next Tuesday the 24th May. I'll be able to post a lot more detail after that session.

Looking forward to it but with eyes open.

Cheers,
Michael.

[Rolf Latham]

Hiya

The whole direct property thing with financial planners has more to do with the ability to research the asset/investment properly than with comms.

While they can do that with reasonable comfort with a largeish new development, its near impossible to do with an established place - at that point your Planner almost becomes a buyers againt.

May also have something to with the fact that to become PS146 compliant the amount of the course dedicated to direct property would be ONE % or less, and its an asset class generally shied away from even by experienced planners simply because they dont know what it can or cant do.

The comms from a RE sale at normal levels in a new development are OKs so I cant see that affecting recommendations - lack of saleable/decent stock may be though.

Ta

rolf

[grubar30]

When I say that Noel Whittaker may be anti-property investment I don't mean to single him out as I think quite a lot of financial planners are in the same boat given that they rarely get paid any sort of remuneration for advising to buy IPs

And to think they had our best interests at heart.

[thefirstbruce]

Michael, I'll be interested to hear what Steve has to say to you in your meeting.

Below is a quote from his website explaining in part his fund strategy.
Considering the S&P/ASX200 fell 3.08% in April, but Steve's funds fell 5.00 and 5.21%, I'd be interested to know what his long term expectations are for its performance. It seems hedging and stop losses aren't used.

It should also be noted that if you had delayed entry into his Fund from early April to May, you'd still have all your capital, rather then being down 5%.

I am not saying this because I am anti Steve persona. On the contrary, Steve made some great posts here earlier. However, I think personality worship has to be replaced with objective analysis at some point. I had seriously considered taking out a margin loan to invest in Steve's fund back in march. I would be spitting chips today if I had carried through with that and had lost 5% of my hard earnt mulah. I suppose at the end of the day, the take home message for managed funds is that, as for direct equities and property, timing is important, especially when trying to catch falling knives!!!





Fund Performance

The volatility in the Australian equity market presented us with buying opportunities. The NavTraDE system buy shares as share prices depreciate. Our cash holding at the end of April was 0.6% as we have taken the opportunity to buy shares at favourable prices. The actual returns in April for the Retail and Wholesale funds were -5.00% and -5.21% respectively compared to -3.08% return of the S&P/ASX200.

The NavTraDE system takes advantage of irrational investor behaviour to buy quality companies as their share prices are falling and to sell them as they are rising. Consequently, the system can realize capital gains from dealing in shares with volatile price movements, irrespective of the net price movement from the beginning to the end of the period. It takes time for shares to move through price cycles and therefore for the potential of the NavTraDE system to be fully realized.

[Mark Laszczuk]

thefirstbruce,
as many, many other people will tell you, investing in managed funds is a long term proposal. If you decide to wait 'for the right time' to invest, then you'll be waiting a long time.
Let's say you bought a house and it subsequently dropped 5%. Would you kick yourelf for making the purchase or say 'Well, it'll (hopefully) regain it's value over time'. It's the same principal with shares. If managed funds did nothing but rise in value every single day, then it wouldn't matter, but ALL funds rise and fall in value. If you don't feel comfortable with this scenario, then I suggest not putting money into shares at all.

[thefirstbruce]

Mark, yes I have heard the 'x is a long term investment strategy' excuse over and over. Financial planners and fund managers would go out of business if you took this literally. Because in effect, it says that anything is a good investment, at any time, so buy shares and property whenever you want, and don't worry about funds, don't take any notice of cycles, don't bother about understanding different asset classes and asset balance, forget about investment structuring.

That might satisfy 70% of the population, but I think there are many who are here to become a little more sophisticated at putting their capital where it is needed most. I don't think it is a big ask to expect fund managers to do the same.

[Jamie]

thefirstbruce,
as many, many other people will tell you, investing in managed funds is a long term proposal. If you decide to wait 'for the right time' to invest, then you'll be waiting a long time.
Let's say you bought a house and it subsequently dropped 5%. Would you kick yourelf for making the purchase or say 'Well, it'll (hopefully) regain it's value over time'. It's the same principal with shares. If managed funds did nothing but rise in value every single day, then it wouldn't matter, but ALL funds rise and fall in value. If you don't feel comfortable with this scenario, then I suggest not putting money into shares at all.

Hi Mark,

Are you now working for Steve as a Qualified Financial Planner? If so, well done!

Jamie.

[Sim]

thefirstbruce - are you suggesting that buy and hold is not a good strategy ?

[willair]

That might satisfy 70% of the population, but I think there are many who are here to become a little more sophisticated at putting their capital where it is needed most. I don't think it is a big ask to expect fund managers to do the same.

Thefirstbruce,
thats the problem these days its hard to see
the distinction between an enthusiastic sales pitch,
and Truly pure independent advice..
good luck
willair..

[thefirstbruce]

Sim, are you saying buy and hold is the best strategy, for property, shares, and funds?

If so, how do you justify the existence of funds? what advantage do they offer over buying shares directly, when applying a buy and hold philosophy?

[Sim]

I didn't "say" anything thefirstbruce - I was merely trying to understand your point of view. I am not saying buy and hold is the "best" strategy - just wondering if you were suggesting it was not a "good" strategy.

[thefirstbruce]

Sim, as part of a good strategy, what period are you suggesting one hold for?
And what advantage does a fund have over direct share holdings, when buy and holding?

[Glebe]

Bruce,

Sim is not suggesting anything. Read his post again.

[thefirstbruce]

Glebe, my point is quite obvious now, that given enough time, anytime is a great time to buy anything, according to a buy and hold strategy. So when Sim asks 'is a buy and hold strategy a good strategy?', I take it as a rhetorical question, considering what I had said previously. And respond again, a good strategy compared to what and over what time?

If you look at the general consensus on this forum, most agree property peaked at the end of 2003, and they have been bearish about buying property in most regions since. Obviously a lot of people would still be buying hand over fist if they weren't trying to do something better than buy and hold.

Further, it took the US stock market 16 years to recover to its pre 1929 crash level. Who wants to wait 16 years and suffer a world war, for a buy and hold strategy to be a good strategy.

[Sim]

So what are you suggesting we invest in right now then thefirstbruce ? Using what strategy ?

[see_change]

So what are you suggesting we invest in right now then thefirstbruce ? Using what strategy ?

Sim , I'm not sure he's suggesting anything. I get the feeling that he , like many of us are trying to work out where is the best ( or a very good ) place to put their money at this stage of the cycle.

We spend lots of time working out where best to buy our IP's , so why not spend an equal time over choosing where to place money in shares or managed funds.

See Change

[Simon]

Further, it took the US stock market 16 years to recover to its pre 1929 crash level. Who wants to wait 16 years and suffer a world war, for a buy and hold strategy to be a good strategy.

Is this what you base your strategy on?

Cheers,

[thefirstbruce]

So what are you suggesting we invest in right now then thefirstbruce ? Using what strategy ?

Sim, I haven't set myself up as a financial advisor or funds manager. I am here like everyone else to see what I can learn from others, including the advisors and fund managers that contribute.

I don't have the time and information resources available to me that Simon and Rolf and Peter and Steve have, to make the more informed investment decisions they are capable of making. Hence my higher expectation on their advice and investment activity.

All I can offer is that share and property investment is reasonably passive, compared to going out and making money from property development or starting and expanding some a business. In my view, much of which has been gained from the consensus of opinion expressed here, is that now is not the time to be passively injecting more money into property and shares.

To beat the ~6% pa returns of cash, while simulatneously preserving one's capital, will be difficult, as Steve Navra's april performance points out.

I think, often people feel a need to do something, for the sake of feeling they have acted, when it is better to wait.

So to summarize my attitude at the moment, I am a bear regarding borrowing for property or the share market for the rest of the year. Preservation of capital is ringing loudly in my ears.

[Sim]

Thanks thefirstbruce - you've answered the question I posed to you.

Now another question for you. Do you think it is fare to judge the performance of an investment manager on their performance over one month ?

More specifically, assuming you are taking a longer term view of your investment (my definition of longer term view being somewhat longer than 1 month), such that unrealised capital losses aren't that important to you right now, and you also take investment income into account in your analysis - would that make you feel better about the investment ?

Let's say (hypothetically) that the Navra fund returned 4% income distribution for the current quarter. Cash in hand. Realised profit. Yours to keep regardless of future performance. Is that not worth something ?

Of course it all depends on your own personal circumstances, but given that I am attempting to build up a passive income stream that can help fund my future real estate investments, don't you think I'd be happy for my capital to be tied up for the long term (many years) - provided that the investment continued to deliver good income returns regardless of what the capital value does on a month-by-month basis ?

Naturally, if I was leveraged to the maximum, using margin loans to the point that such a short term downswing causes a margin call that I couldn't meet with extra cash (hence the lender would sell down some of my portfolio, thus causing the loss to be realised), I would be worse off. However, if I was to carefully maintain my gearing ratios to hopefully prevent that situation, then surely it doesn't matter so much what happens this month ?

Happy to hear your points of view on the matter.

[NigelW]

Thanks thefirstbruce - you've answered the question I posed to you.

Now another question for you. Do you think it is fare to judge the performance of an investment manager on their performance over one month ?

More specifically, assuming you are taking a longer term view of your investment (my definition of longer term view being somewhat longer than 1 month), such that unrealised capital losses aren't that important to you right now, and you also take investment income into account in your analysis - would that make you feel better about the investment ?

Let's say (hypothetically) that the Navra fund returned 4% income distribution for the current quarter. Cash in hand. Realised profit. Yours to keep regardless of future performance. Is that not worth something ?

Of course it all depends on your own personal circumstances, but given that I am attempting to build up a passive income stream that can help fund my future real estate investments, don't you think I'd be happy for my capital to be tied up for the long term (many years) - provided that the investment continued to deliver good income returns regardless of what the capital value does on a month-by-month basis ?

Naturally, if I was leveraged to the maximum, using margin loans to the point that such a short term downswing causes a margin call that I couldn't meet with extra cash (hence the lender would sell down some of my portfolio, thus causing the loss to be realised), I would be worse off. However, if I was to carefully maintain my gearing ratios to hopefully prevent that situation, then surely it doesn't matter so much what happens this month ?

Happy to hear your points of view on the matter.


Sim's approach makes sense to me.

I guess the question I'd put to 1stBruce is - why not keep some of your capital in a liquid but higher yielding investment than cash whilst searching for those great deals/developments/building your business/es? Certainly with that better yield comes at a market risk...but we all know that risk and return go together...

My 2.2 cents
Cheers
N.

[thefirstbruce]

Hi Sim,

OK so now your position is becoming clearer;

- that capital losses are acceptable, as long as they are offset by distributions.

- that time hides all inefficiencies, and especially those that occur sharply over a few weeks during an anticipated correction. Which incidentally raises the hypothetical- would a fund manager advise to delay investing in his fund until after a highly anticipated correction, or would he adopt your position, and advise that any capital losses due to a forseeable correction would be smoothed out over the next 24-96 months? Obviously, I'd prefer he tell me to delay investing in his fund so that the risk of capital erosion was less. The 5% capital loss in Steve's funds during April will take how long to be regained?

Sim, you still haven't answered my question regarding whether a buy and hold strategy renders managed funds obsolete, when for very little research effort, an individual investor has access to the same div and CGs the derivative funds do.

[see_change]

Hi Sim,

OK so now your position is becoming clearer;

- that capital losses are acceptable, as long as they are offset by distributions.

- that time hides all inefficiencies, and especially those that occur sharply over a few weeks during an anticipated correction. Which incidentally raises the hypothetical- would a fund manager advise to delay investing in his fund until after a highly anticipated correction, or would he adopt your position, and advise that any capital losses due to a forseeable correction would be smoothed out over the next 24-96 months? Obviously, I'd prefer he tell me to delay investing in his fund so that the risk of capital erosion was less. The 5% capital loss in Steve's funds during April will take how long to be regained?

.

Highly anticipated..... mmm

Every one knew that a property correction was coming , and for many it was highly anticipated , but to get out at the top , or just before it is pure luck , which is what you're implying people should do.

I thought that 911 was going to trigger a turn in the property market , and if I'd acted in anticipation at the time , I'd be several 100K poorer today.

See Change

[Mark Laszczuk]

Hi Mark,

Are you now working for Steve as a Qualified Financial Planner? If so, well done!

Jamie.

Jamie,
No I'm not working for Steve as a financial planner, and I don't see what that has to do with my post? Long time readers of the forum with know I am a great admirer of Steve's but quite frankly I don't feel the need to defend his fund, and that was not what I was trying to do in that post.
The fact is that managed funds ARE a long term investment, regardless of what thefirstbruce (or others) may think of them. I (up until recently) was working for a financial planning firm which had most of it's clients in one or two particular master trusts. Some of the clients were in other funds, but the large majority of the clients were in one of the these two.
It was part of my job to work out client IRR's and doing so, I discovered just how badly these people were being duped (in my opinion). The great majority of them, in hidsight would have literally been in the same position or sometimes better off having their money in something like ING, the returns were so poor.
Now, in my opinion, the large majority of managed funds out there are complete crap. I also believe that there is nothing better than hands-on investment with the support of a very carefully chosen team. Some people may be inclined towards direct share investment, others are not. That's where funds come in. Researching the funds and picking the best one or more for a person's individual needs is paramount to their investment success.
Okay, you can say 'Hey, I've got a planner to do that for me' which is fine, but don't be surprised when they put your funds somewhree that suits them the most. More investment savvy people do the research, talk to their team and come up with the solution that is best for them. It never ceases to astound me how easily people will walk into a planner's office, dump thousands of dollars on the table, say invest this for me and walk away. But they reap what they sow I suppose.

[Sim]

capital losses are acceptable, as long as they are offset by distributions.

I didn't say that. Unrealised capital losses are not something to cry about unless you have to realise them. This is where short term investments carry risk - if i needed my money back right now, it would be a different proposition. Were you upset when your house went down in value by $10K last month ? Probably not for two reasons - firstly you didn't know it went down by $10K in value, and secondly, you weren't intending to sell it this month.

Are you saying that you simply cannot stand to see any form of short term paper loss on any of your investments ? If so, I suggest that cash might be the best strategy for you.

- that time hides all inefficiencies, and especially those that occur sharply over a few weeks during an anticipated correction.

What ? The correction that has been anticipated for several years now ? When is the right time to invest ? Can I borrow your crystal ball ? Mine seems to be broken.

Which incidentally raises the hypothetical- would a fund manager advise to delay investing in his fund until after a highly anticipated correction, or would he adopt your position, and advise that any capital losses due to a forseeable correction would be smoothed out over the next 24-96 months? Obviously, I'd prefer he tell me to delay investing in his fund so that the risk of capital erosion was less. The 5% capital loss in Steve's funds during April will take how long to be regained?

Are you suggesting that anyone who still owns blue chip Australian shares past the beginning of April is foolish ? Are you suggesting that all smart investors would have sold out their holdings come March 21st because the market was about to drop ?

Last I looked, my fund manager didn't have a crystal ball (I haven't found any that actually do). Hindsight is a wonderful thing.

Sim, you still haven't answered my question regarding whether a buy and hold strategy renders managed funds obsolete, when for very little research effort, an individual investor has access to the same div and CGs the derivative funds do.

Buy and hold of what ? The underlying shares ? Or the fund itself ?

[Mark Laszczuk]

would a fund manager advise to delay investing in his fund until after a highly anticipated correction, or would he adopt your position, and advise that any capital losses due to a forseeable correction would be smoothed out over the next 24-96 months? Obviously, I'd prefer he tell me to delay investing in his fund so that the risk of capital erosion was less. The 5% capital loss in Steve's funds during April will take how long to be regained?


thefirstbruce,
If you happen to find an honest planner that can see into the future and know what's going to happen in the next week/month/year, let me know, I'd love to become a client.
Do you honestly think anyone knows whether a fund's value is going to rise or drop and by how much in any given month - before it actually happens? Okay, so there's an 'anticipated' drop - doesn't mean it's actually going to happen. Are you gonna dump a whole lot of cash into the market because there's an 'anticipated' rise? I certainly hope not.

[Aceyducey]

So TheFirstBruce,

Are you advocating the risk nothing-lose nothing approach - ie: keep equity in cash so you don't run the risk of losing money in investments?

And are you advocating cash as a long-term investment strategy versus property, shares, managed funds or other assets? What's the comparative rate of return over time?
(After all if you don't have a return rate how can you make a fair and equitable comparison!)

Or are you advocating cash as a short-term strategy?
In which case comparing it with investments with longer-term horizons is inappropriate!


Frankly if you're looking short-term there are many opportunities better than cash.

And if you're looking long-term there are many opportunities better than cash.

But if you're attempting to compare long-term investments against cash in the short term, you're making an unsound assessment.

Cheers,

Aceyducey

[thefirstbruce]

Highly anticipated..... mmm

Every one knew that a property correction was coming , and for many it was highly anticipated , but to get out at the top , or just before it is pure luck , which is what you're implying people should do.

I thought that 911 was going to trigger a turn in the property market , and if I'd acted in anticipation at the time , I'd be several 100K poorer today.

See Change

SC, you inferred wrong. I didn't state one should get out at the top before a correction. I implied one should not get in when a correction is highly anticipated, and evident via many TA indicators. Plus I was referring to the stock market, not property. However, I think if you are in contact with a lot of people from different walks of life, and REAs, it isn't impossible to see the plateauing of a property boom. I think there was a lot of helpful opinion on this forum about that late 2003.

[thefirstbruce]

I didn't say that. Unrealised capital losses are not something to cry about unless you have to realise them. This is where short term investments carry risk - if i needed my money back right now, it would be a different proposition. Were you upset when your house went down in value by $10K last month ? Probably not for two reasons - firstly you didn't know it went down by $10K in value, and secondly, you weren't intending to sell it this month.

Are you saying that you simply cannot stand to see any form of short term paper loss on any of your investments ? If so, I suggest that cash might be the best strategy for you.


Sim, I am thinking more of entry points into investments. Everyone from Peter Spann to Brenda Urwin to Kevin Hockey has recommended delaying buying property in the last 6 months, except in some hot spot with some special relationship with the local agent. Further, every experienced stock investor and broker and analyst I know were preaching stock market correction from February this year, and hence be weary of entry.

Further, my current circumstances entail looking for a tax minimization strategy. I was considering prepaid interest on a margin loan or IP. You ask whether I can't bear a paper loss of any sort. This point highlights that you are thinking long term, only..... I think it is obviously a better investment if I have the option of getting out of an investment after 12 months with a capital gain, and into something more lucrative. Of course it is a more powerful investment strategy to make a 20% return 3 times in three years rather than once. I think many zealous advocates of the buy and hold strategy fail to look for opportunities where they might make their money work more efficiently.

I come to this forum to gain insight on how I might do better than buy any suburb, and hold until I retire. If you are happy with that strategy, then that's your comfort zone. I just think it is possible to make one's money work a lot harder than that, and I am very much open to challenging my comfort zone to become more comfortable predicting cycles. I learnt about the buy and hold strategy back in the 80s when Noel Whittaker put out "making money made simple".

[Sim]

I think it is obviously a better investment if I have the option of getting out of an investment after 12 months with a capital gain, and into something more lucrative.

I agree totally - but that doesn't address the fact that your carefully chosen and timed investment may go down by 5% in value in one month.

[Sim]

Jamie,
No I'm not working for Steve as a financial planner, and I don't see what that has to do with my post?

Mark, I think Jamie's comment was only in response to an assumption (that I also made myself) based on previous posts by luckyone (http://www.somersoft.com/forums/showpost.php?p=153178&postcount=5) and MichaelWhyte (http://www.somersoft.com/forums/showpost.php?p=153183&postcount=6) - which seemed to imply that you were involved with NFS. Looks like we were mistaken.

[thefirstbruce]

I agree totally - but that doesn't address the fact that your carefully chosen and timed investment may go down by 5% in value in one month.

Sim, the gist of my postings in this thread is to inform of my experience. I had originally looked at Steve's fund in March, with the option of staying in or getting out after 12 months, with capital preserved at least. I would still prefer to get into property, but feel property will soften further in the next 12 months, so had settled on a margin loan for the time being, with the intent to get out and into property.

When I saw the poor Navra result in April, obviously I was glad I hadn't got into the fund in March. When that 5% is regained, who knows.

After reading Steve's explannation of how the fund works, that I posted earlier, further alarm bells went off in my head. Based on that explanation, I believe I am certainly a lot better off buying and selling with the limited TA experience I have, and using stop losses.

Maybe I was totally naive to believe parking margin loan money with 12 months prepaid interest in a fund, for 12 months, was a reasonnable thing to consider. Maybe the lesson from this thread is that equity funds should never be innvested in for less than the number of years it takes for a full bull bear cycle. That way, you at least preserve your capital, no matter when you enter the market.

[Sim]

Okay tfb, that's not the way your posts originally came across. I accept that.

Some real results will be interesting to see over the next twelve months. Since I own units in the fund, I will be happy to post some real-life returns down the track for reference.

For the record, I also did make some investments into the fund in March (only because that's when the money became available for investment, not because of any attempt at timing by me) - and yes, I am disappointed with the current negative equity situation of that additional investmen - and yes, in hindsight I would have been better to wait a month or more, but like I said, I am quite content to just let the money sit there - I didn't have the benefit of a crystal ball when I made the investment. I will use some of the distributions to cover margin loan costs, and will reinvest the rest for more growth in the future.

[Glebe]

Group hug! :)

[thefirstbruce]

And Sim, I have $250k sitting in my Commsec account. got out of most shares back in November...was too nervous to get back in during January and Feb, expecting that correction, you see.

talked with the third accountant in as many months yesterday, and have decided to minimize tax via expanding my business.

[Jamie]

Hey Michael,

Out of interest, who did you see when you went to Navra. I met up with Steve Navra and Mark Laszuck (I think that was his surname) last Friday.
Luckyone,
Yep, that's them, the two main guys in Navra Financial Services.
Jamie,
No I'm not working for Steve as a financial planner, and I don't see what that has to do with my post?

Hi Mark,

As Sim said, the only reason I asked was because Michael and luckyone both mentioned it, and you have mentioned previously you were studying to be a financial planner.

You're not working for Steve?

All the best,

Jamie

[gazza]

If you look at Navra's website (www.navra.com), there is a financial planner called Mark Raymond in the Sydney office.

[TomL]

Interesting thread - and I think it highlights a few things I would like to summarize.

All investments require an entry and exit strategy.
All investments need to make sense in your entire portfolio.
Each investment suits a particular purpose - CG, cashflow, risk mitigation, insurance, working capital etc

also .. i believe that ..

You can achieve CG in any market using any number of investment vehicles.
You can achieve cashflow in any market using any number of investment vehicles.
The right mix of CG and cashflow that fulfill your SANF requirements

As an educated investor we need to keep our eyes, ears and our MINDS open to opportunities, different points of view and experience of others. Then have the courage and conviction to investigate, understand, and apply those strategies that will further our own goals.

When I read these forums, and speak to other investors THESE are the things that are going through my mind. It gives me a framework for comparing strategies and tactics, and a way of filtering out the noise.

T.

[MichaelW]

Guys,

Sorry, I should have checked the surname. I knew it was Steve Navra and Mark ???. The original post stated confusion about surname but I confirmed that those were the 2 guys in question. I met both of them on Saturday but couldn't remember Mark's surname.

As an aside, a lot of commentators are suggesting the US market is massively undervalued at the moment. Steve is looking to launch his US fund in the near future and I am considering taking a highly leveraged position to buy into this fund. His trading approach can buck the trend, but it amplifies gains even more when the trend is your friend. I'm not comfortable with a highly leveraged position in Australian residential property at the moment, which is my other preferred vehicle, so I am leaning towards Steve's US fund.

Thoughts?
Michael.

[TJamesX]

Correct me if I'm wrong...

US market is still trading above long its term PE ratio, and is trading at a higher PE ratio than the Aussie market (desptie our strong performance for the last 12 months)

Value is relative to..??

[Mark Laszczuk]

Hey Jamie,
Whoopsies! Read the post and thought 'what the hell?', hahaahaa. Anyways everyone, just to let ya know - it ain't me!

Mark.

[luckyone]

Sorry Mark. Must offer my sincere apologies. After looking at Steve's website (and the photos), it most definitely was Mark Raymond. Like I said, I thought Laszczuk was his surname but wasn't sure. My apologies to you. :-)

[mit]

It will be interesting to see Steve's results for May. The market has been trading in a 100pt band, with lot's of volatility. This should be the kind of environment where his system should shine.

I was going to invest in his fund earlier this month but didn't get my act together.

MIT

[Mark Leo]

It will be interesting to see Steve's results for May. The market has been trading in a 100pt band, with lot's of volatility. This should be the kind of environment where his system should shine.

I was going to invest in his fund earlier this month but didn't get my act together.

MIT

MIT,
I'm also interested in May's results and tend to agree with your assessment. This is the kind of market environment that I've been waiting for to enable a true assessment of the fund's performance. Or as they say in the classics:'The NavTraDE system takes advantage of irrational investor behaviour to buy quality companies as their share prices are falling and to sell them as they are rising. Consequently, the system can realize capital gains from dealing in shares with volatile price movements, irrespective of the net price movement from the beginning to the end of the period. It takes time for shares to move through price cycles and therefore for the potential of the NavTraDE system to be fully realized'.

I'm expecting this system will work quite well on some of the more volatile markets OS as well...

Regards,

Mark Leo

[bawley]

The people at Navra just called me and I've booked to see Steve in person for my initial consultation next Tuesday the 24th May. I'll be able to post a lot more detail after that session.

Looking forward to it but with eyes open.

Cheers,
Michael.


Hi Michael

How was your session with Steve Navra - are you able to share some of the good oil? :)

Cheers Bawley

[caramellokoala]

doozer

To get back to your original post. I think if you delve a little more deeply into the staffing arrangements with Navra in Brisbane and Melbourne, you may find that a planner from each office quit almost at the same time. That may be why the person in Brisbane appears to be inexperienced.

I have my own opinion and experience with the Brisbane office and let me tell you I was far from happy with the dealings I had.

Cheers

CK

[Gabriel Conroy]

They are reputable and very honest from what I could gather and I s'pose on the conservative side, and yes, they are a bit shy on property and tend to go down the funds path. I later went to another planning firm (this firm is not any of the businesses that post here) that geared me into funds via margin lending. This, together with other aspects of their 'plan' has been an absolute disaster for me financially & I am now only getting back on my feet. The irony was that my problems started when I went to see this 'firm'. I feel terriby let down. I am now though ruthless when it comes to 'advice'. Here's what I have learned the hard way.
1. Trust no one. Be very careful of any planner. Get independant advice from your accountant, solicitor etc.
2. Check all the trailing fees, 'placement' fees etc. You'd be surprised how many people have their hands in your pocket along the way. Even 1% over years really adds up.
3. Plateforms are expensive, particularly if your balance is under about $250 000. Fees and more fees just wear you down like a slow death. With a lot of funds you'd be better off just putting your money into cash or term deposits.
4. Government super funds have very low fee structures. A lot of folk forget that most of these funds like QSuper also give FREE financial advice through qualified advisors. By all means pay for advice, but it had better be punching above its weight if you are paying. And I mean personal service and active monitoring of your portfolio etc.
5. Fee for service - Is what I like. Your advisor should have no preference for either funds, shares, property. They should give independant advice and the plans should not be 'one size fits all'.
6. No amount of advice will make you rich. You have to get out and do all the research and hard work yourself. Educate, educate, educate. Use your advisor to bounce ideas off. Avoid the cult of the personality.
7. Is your advisor rich and successful? Do they have their own property portfolio. Are they successful investors themselves? Are they successful market investors? If the answer is no to these questions then it may be time to move on.
8. Recent legislation has tidied up the planning industry. That's good to hear.
9. The plan I was in had locked me in for years. Be very careful of any plan that costs you tens of thousands of dollars to exit early.

I now have an outstanding advisor and accountant. Luckily, I still have some very good property that is worth a lot of money. I am putting my drama down to experience and hope that it in some small way helps other investors.

Best, Gabriel

Note - The above is not specific advice, nor is it intended to be used by anyone for the basis of individual planning or investment decisions.

[Ausprop]

thanks for the frank account of your experience Gabriel, a good heads-up for all of us.

[Chilli]

Hi Gabriel,
I am in the process of working with an advisor on a fin plan (my first with advisor) and concerns have been built up (even before reading this post ). I have been doing quite fine myself without any formal Fin Advisor to-date, but now feel that there are a lot more out thee I don't know hence the urge for an advisor and a proper plan.....
Would you care to post here or PM me the contact of your advisor & accountant. I am in Brisbane.

Thank you

[MichaelW]

Hi Michael

How was your session with Steve Navra - are you able to share some of the good oil? :)

Cheers BawleyBawley and others,

Sorry only just noticed this request to an old post of mine...

I did go and see Mark Raymond and get the initial discussion on my situation and proposed next steps. It was very productive as anticipated. Since then they have drawn up a full financial plan for me and I am meeting them again on Monday to put it into place.

I've now finalised the LOC against my PPOR (see my sig) and am using the freed equity to invest. I'll definately be leveraging some of it in to Navratrade and will probably also be buying a nice little IP up in Brisbane in the near future.

Navra would argue that well selected IP assets always perform well over the long term. My only consideration is that I believe the market is slow to turn and we informed investors will notice the correction and be able to act in ample time then. So, given the markets have peaked, I am debating the merit in buying a NG asset today. Sure, my holding costs will be neutral if the equities fund them as planned. But, if the equities are positive, why not just bank that profit off my PPOR mortgage and wait 12-18months or whatever and buy NG IPs when the market turns.

Either way, the advice they offer is sound and they are extremely professional. I would have absolutely NO hesitation in recommending Navra to any prospective clients out there.

Cheers,
Michael.

PS If you're interested I'll post Mark's response to my above considerations after putting them to him on Monday?

[House_Keeper]

A word of caution about financial advisers, from personal experience.

I have been through 3 advisers so far, all promising much but delivering only disappointing resutls.

I haven't met yet a financial adviser whose "advice" wasn't influenced by the amount of commission they were getting from the products they were recommending.

I would love to meet a financial adviser who genuinely cared more about growing my investment wealth than making a commission.

In the end, I have come to the realisation that nobody cares about my wealth more than I do. Nobody can understand my personal circumstances as well as I do. I prefer to make my own decisions. That takes a lot of research, education, and courage. I am finding that I am progressively getting better at it though as I continue my journey.

Cheers,

[luckyone]

PS If you're interested I'll post Mark's response to my above considerations after putting them to him on Monday?

Yes, please post Mark's response. That would be great.

[Ausprop]

"In the end, I have come to the realisation that nobody cares about my wealth more than I do. Nobody can understand my personal circumstances as well as I do. I prefer to make my own decisions. That takes a lot of research, education, and courage. I am finding that I am progressively getting better at it though as I continue my journey."

couldn't agree more housekeeper. Off topic, but I also happen to believe the same of the medical profession... unfortunately doctors are like financial advisers and are in business to make money, not be concerned about what is ultimately best for you. Not that there is enough time in life to become cancer experts or anything. So it is a balance, try do as much as you can for yourself and take on board the guidance of professionals - not ideal but you can only do what you can do.

Fee for service financial advisors would have to be the way to go - unfortunately human nature hates paying for anything and the tendency is to go to people that get paid from commissions as it appears to be a free service. Often it is out of ignorance too, I believe the general public thinks that 'financial advisors' are there to help them, when really they should be called 'financial product sales representatives'... at least that way people would know that financial advisors are just like real estate agents: same dog different leash.

[Simon]

Bawley and others,

Sorry only just noticed this request to an old post of mine...

I did go and see Mark Raymond and get the initial discussion on my situation and proposed next steps. It was very productive as anticipated. Since then they have drawn up a full financial plan for me and I am meeting them again on Monday to put it into place.

I've now finalised the LOC against my PPOR (see my sig) and am using the freed equity to invest. I'll definately be leveraging some of it in to Navratrade and will probably also be buying a nice little IP up in Brisbane in the near future.

Navra would argue that well selected IP assets always perform well over the long term. My only consideration is that I believe the market is slow to turn and we informed investors will notice the correction and be able to act in ample time then. So, given the markets have peaked, I am debating the merit in buying a NG asset today. Sure, my holding costs will be neutral if the equities fund them as planned. But, if the equities are positive, why not just bank that profit off my PPOR mortgage and wait 12-18months or whatever and buy NG IPs when the market turns.

Either way, the advice they offer is sound and they are extremely professional. I would have absolutely NO hesitation in recommending Navra to any prospective clients out there.

Cheers,
Michael.

PS If you're interested I'll post Mark's response to my above considerations after putting them to him on Monday?


I must admit to agreeing with all the negative sentiments on advisors until I met Steve Navra. He is the only FA I have ever met or even heard of who recommends property over funds.

I have recently bought into his fund am looking to buy more shortly.

Kind regards,

[MichaelW]

Simon,

Dare I ask "how" you bought into Steve's fund? ;)

I have to agree though that Steve seems the real mackoy. His advice is more about optimum financial structures to maximise your growth through effective use of tax deductions and an appropriate mix of asset categories. He is pro direct investment property and only uses equities to fund the holding costs of your properties which he considers the growth category.

To put Navra in perspective, I rang Mark with a minor concern I had. They recommended my mortgage broker and I couldn't speak highly enough of him and his personal professionalism. Anyway, being the tight-wad that I am, I put it to the broker that he might consider rebating me a part of his leading commission such as some other "discount" brokers in the market do. He couldn't, but when I mentioned it to Mark, HE DID SO out of Navra's pocket just to keep me happy. I don't think this is the norm for them but they would recognise that I am a potentially lucrative long term client. They are an A+++ financial advisor who are concerned with long term relationships and genuinely seem to care about the little stuff.

I could call Mark or Steve any time I wanted and they'd take the call. If they couldn't then they'd take a message and call me back. They're that sort of company!

Cheers,
Michael.

[stretchy]

I agree totally for commision-based advisors, however my experience with a fee-based advisor has been brilliant. Although the upfront expense does appear to be steep, you tend to break even after a few years when you factor in commisions.

You can also look for independent advisors - who by law cannot claim to be independent unless they are fee-based and are not associated with any product/orginisation they can on-sell. Of course there could be some soft-money incentives but at least you have some degree of confidence with an independent advisor.

With my super fund, I used a fee-based independent advisor to get rid of the commisions. With the lower fees from a wholesale fund and no entry/ext fees I will break even in about 4 years on my current salary. Given that I have 40 years of employment left (if I retire at 65) its a pretty good deal :)

You get what you pay for I guess.

Check Travis Moriens FAQ for more examples (he is the financial planner I used, so he is a little biased about commision-based advisors):

http://www.travismorien.com/FAQ/main.htm


A word of caution about financial advisers, from personal experience.

I have been through 3 advisers so far, all promising much but delivering only disappointing resutls.

I haven't met yet a financial adviser whose "advice" wasn't influenced by the amount of commission they were getting from the products they were recommending.

I would love to meet a financial adviser who genuinely cared more about growing my investment wealth than making a commission.

In the end, I have come to the realisation that nobody cares about my wealth more than I do. Nobody can understand my personal circumstances as well as I do. I prefer to make my own decisions. That takes a lot of research, education, and courage. I am finding that I am progressively getting better at it though as I continue my journey.


Cheers,

[geoffw]

I once used a fee-based financial advisor, figuring that he would be more inclined to give me independent advice. He didn't- he still sold me stuff which earned him hefty fees, and which were highly risky- most disallowed by the ATO (agricultural tax effective investments were a large part of the mix). I just about lost everything as a result of using him- the fees were only a way to get more out of me.

[nid]

Hi everyone,
This is our experience, in 2001 we think we want to invest and we dont want to clean the toilet, off we went to whittaker, the advice is to take of the loan for $75000 and put in manage fund, so we did it, after 3 months we got the statement said $88000. and then came down to $75000 and then $55000 we wait and wait because if you take out before 3 years we have to pay for panelty(sorry if wrong spell) we wait with nothing happenning and then start to come up, yeh, by 2003 it came up to $75000, we rang them and close the account as fast as we can and never look back. and during that 3 years we hardly hear from our financial adviser, so when they get our money, they gone. at the moment we dont mind to clean the toilet and during that 3 years we who paid for the interest, if we buy the property the tenant would help us to pay for it.
thanks
nid

[topcropper]

G'day nid.

It's just a shame that you pulled out in 2003. I assume it must have been late 2003. Early 2003 was the bottom. Exactly one week before the Iraq war started. At least you never lost much. If you held till now, you would be way in front.

At the bottom of the sharemarket slump in March 2003, investors were panic selling sound, profitable blue chip companies, trading at just 13 times earnings, to buy Sydney houses, trading at 40 times earnings.

Funnily enough, the opposite was happening just 3 years earlier, when the tech boom was on.


Back to the subject.
Financial advisers make huge profits from managed funds. That's why I believe small private investors can do better with a little research, and common sence investing. Financial advisers who were recommending residential property investing in the late ninetees, when property was cheap, and shares were expensive, and foregoing an ongoing commission from a fund manager are worth keeping as advisers. Navra is one of these I believe.

See ya's.

[JamesGG]

I must admit to agreeing with all the negative sentiments on advisors until I met Steve Navra. He is the only FA I have ever met or even heard of who recommends property over funds.


Hi all,

I know of another - our very own Garry Knight (http://www.somersoft.com/forums/member.php?u=1721) of this forum. :)

Cheers

James.

[thefirstbruce]

G'day nid.

Back to the subject.
Financial advisers make huge profits from managed funds. That's why I believe small private investors can do better with a little research, and common sence investing. Financial advisers who were recommending residential property investing in the late ninetees, when property was cheap, and shares were expensive, and foregoing an ongoing commission from a fund manager are worth keeping as advisers. Navra is one of these I believe.

See ya's.

Too right TC, that small investors can do better.
Funds, due to their regulatory restrictions, are locked out of many shares, and cannot move significant percentages of their portfolios at once, in or out. Hence, why I think most of them are happy to match the indices.

My brother is a stock broker and has nothing good to say about funds, as you can imagine. I presume the funds have taken a lot of work away from brokers. But then brokers have offered c*ap service for decades. Never return your calls during a bull run, unless you are already rich.

[MichaelW]

Hi Guys,

I promised I'd post Mark's response to my concerns on this thread after going and seeing him at Navra's offices yesterday.

He was perfectly pragmatic as expected really. He had even prepared a list of other high quality funds that he was also comfortable putting forward as alternatives to NavTrade. His position was though, that NavTrade in itself had good diversification and was low risk. Its across a mix of company types from banks to miners so has diversification in that regard. Because of their filtering requirements they mitigage a lot of the downside risk of the ASX100 companies by only picking the top 20 odd of these to trade in. And of course, their trading technique is reactive and not predictive so takes all the speculation out of the trade. I guess the only "speculation" is that the top 20 companies selected will continue to represent solid buying and little long term downside.

I've finalised the service level 1 stuff with them now and gone through the full financial plan. I'm about to step up to the full service level 3 offer and go the full implementation path. I've posted another thread on that implementation approach so won't hijack this one. Guess its off to Bris-vegas to buy IP1 and maybe IP2 for me and Mrs MichaelWhyte :) I'll post the results on that other thread.

Cheers,
Michael.

[willair]

by 2003 it came up to $75000, we rang them and close the account as fast as we can and never look back.
Nid,
sounds like a hard complicated and expensive lesson
thats always the problem when other people take control
of your money,you need to decide from the start whether
time or money is more important to you.
good luck
willair..

[yadreamin]

Hi
MichaelWhyte, you seem pretty happy with the service so far.May l ask what sort of fees you will pay?Is this a yearly fee or a once off fee?Or maybe a % of your investment?
Where did you post the thread on "implementation approach"?

My first time expirence with a Financial Adviser.
I have just had a financial analysis done by a very well known pro property firm.
I am still a bit dismayed at their sugestions and a bit dissapointed in their proposals for our future when it didn,t even include borrowing capacity. current or future LVR, or CPI increases for the 15 year plan they presented us.
Yes Yes l am following it up with the firm so no names now.
The one suggestion that l still cannot come to grips with is.

Take all cash out of offset acc on ip loan and any other cash reserves and pay it off principal of ip.
Then set up loc withdraw $10,000 and pay this off principal of ip.
Then pay down as quick as you can with after tax dollars that $10,000 loc.
Then repeat again,till your debt is very minimal."Debt is debt and you should always work at paying this off.!!"
It just doesn,t make any sence to me at all.
Maybe one of the forum members can shed some light on this "bright idea"
Cheers yadreamin

[MichaelW]

yadreamin,

Some of that propsal you've had drawn up does sound a little didgy, "debt is bad"?!!! Ah well, I'm sure you'll keep us posted.

To your questions:

I opted for full service level 3 with Navra which gains their assistance in full implementation of the proposal they put to me. This isn't for everyone as it is relatively expensive. The total cost of this is $5,500 however that waives any entry fees into their NavTrade Retail fund. I am investing $559K into that fund so this works out at less than 1% of that amount.

This is a one off fee. All future investments into that fund are fee free as a Service Level 3 client.

I can, however, opt for a full review of my financial situation to be conducted again and this would incur the $1,100 fee for the financial plan to be drawn up. I did this initially with Navra and have now opted to "ante up" to the full $5,500 by paying the incremental $4,400 and execute the plan in full.

There is also the usual ongoing management fees on the fund but these are low compared to the industry standard.

My personal opinion is that these fees are very reasonable. Had I had my full financial plan in place over the last 12 months then my "profit" after expenses from the fund alone would have been about $100K. I also aim to invest in two to three IPs at around $350K each. I'm off to Brisbane in the coming months to buy the first one or two.

Hope this helps somewhat.

Cheers,
Michael.

PS Here's the thread on my plan. I'll update it once I've executed some of it by leveraging into NavTrade and buying some IPs.

http://www.somersoft.com/forums/showthread.php?t=21768&page=1&pp=15