Staying invested through the cycles

Q: When did you begin investing? Was there a trigger factor that made you start?
A: I began investing while at university, pre-1987, so the 1987 crash was my first experience with a bear market. I got together with a group of friends who had a common interest in stocks and shares. It was more of a hobby at that stage.

Q: Do you have a target? And does this target move with changes in your circumstances?
A: There is no target per se in terms of a sum of money. I am working towards an active 'retirement'. But what's really important for me is to ensure that I provide the right educational opportunities for my family, which will certainly involve my children being educated at international universities. I believe the experience will broaden their horizons in a rapidly globalised world.

'It's "time in the market" and not "market-timing" that creates long-term value ... I am a strong believer in investing through the cycles, and any investment decisions made have to be for the long-term. Investing is more
of a marathon than a series of sprints.'
-Peter Flavel
Q: What investments do you have? Do you believe strongly in certain types of assets, like property or stocks, and so plan your investments accordingly?
A: I have about 70 per cent of my savings invested in a core portfolio with a balanced growth strategy. The balance is in a 'satellite' portfolio. For the core portfolio, I use a multi-manager approach and it rebalances quarterly to a pre-determined strategic asset allocation.

I am not averse to taking more risk in the satellite portfolio, so I invest in individual stocks and funds. I'm a firm believer in the long-term growth prospects of India and China, for instance. But care is needed as some assets have got ahead of themselves in valuation.

Q: Do you see yourself retiring in Australia and do you have property there for when you go back?
A: Like a lot of Australians, I tend to have a love affair with property. I had invested in some properties at an opportune time, and these include properties in Queensland, Melbourne and Bali. So I will spend some retirement time there, but I also expect to be spending time in the rest of the world, like Asia. I have been based in Asia for more than five years now, and can see myself spending some of my retirement here.

Q: You have young children. Does your investment plan include providing for them until a certain age before you tell them they're on their own?
A: Between my wife Theresa and I, we have five children. My investment plans include providing each of them with the right educational opportunities, right up to tertiary level, if they earn the right to be accepted into international institutions. I am a strong believer in instilling independence, yet doing enough to help them stand on their own feet, but they must create their own wealth opportunities.

I grew up in a family that ran hotels and farms, and my parents worked extremely hard, imparting strong values. Through that I have learned not to take things for granted, and that living with comforts comes about not by chance but through hard work.

Q: Do you believe in leaving money/property for your children?
A: What I believe in is to teach them the importance of education and making a career, and creating their own wealth, so they can be independent and financially secure. I think it's far more important to help them hone their fishing skills than to reel in the catch for them.

Q: Does your wife make her own investment decisions or do you consult each other?
A: It's a partnership. We consult each other on investment decisions.

Q: What kind of retirement do you envisage? Do you have a date for retiring?
A: I have difficulty envisaging myself enjoying a traditional retirement - that is, sitting back and not doing anything. What I probably will do is to continue to work for as long as I can, and ease into retirement. I will probably have a semi-retirement and work part-time. Life is meant to be enjoyed, but having an active mind and interests will continue for some time in my case.

Q: What has been your best investment?
A: I would say my decision to stay invested in the equities market through the various cycles. It's 'time in the market' and not 'market-timing' that creates long-term value.

My exposure in Standard Chartered shares has also been a good investment - I have seen it rising in the past five years.

Q: And the worst?
A: I had a residential property in Melbourne during the late 1980s as an investment when the market went sideways for several years. I eventually sold it but I had to hold the property for a longer time than anticipated.

Q: If one of your investments goes sour, do you curse and swear and ruthlessly cut losses, or go into a depression? Or do you see it as part of taking risks, and go on to something else?
A: I am a strong believer in investing through the cycles, and any investment decisions made have to be for the long-term. Investing is more of a marathon than a series of sprints.

Q: What do you spend most money on?
A: A fair proportion goes to investing in the future. I'm pretty much a saver.

Q: What do you splurge on?
A: While not in the splurge category, when we do go on holidays we like to travel to some places. The family likes Bali, India, though generally all through Asia as well as a special favourite - Sunshine Beach in Australia, near Noosa.