“Timing is everything.”
That’s the key theme that has underpinned the investment strategy and successful investing career of our Managing Director Philip Ryan.
With more than three decades of experience in financial planning and funds management, Philip has a wealth of knowledge at his disposal when assessing prospective investment opportunities for clients.
But what about his own interests? How does someone with his industry experience and passion for investing create an investment portfolio that delivers sustainable long-term financial return?
We sat down with Philip to discuss his investment strategy and here is what we learnt…
“My first recommendation would be to get yourself an education in basic economics,”
“Invest time in understanding the relationships between currencies and interest rates, property cycles, population increases, fiscal policy and any extra forces that are at play in the economy.”
This interest in economics and economic cycles dates back to Philip’s days at university, huddled in the Queensland University of Technology (QUT) Library, absorbed in the theatre and histrionics of the Wall Street crash of 1929 and analysing the impact of the Great Depression of the 1930s.
From this fascination with financial disaster, and eventual recovery, Philip quickly ascertained that while downturns in the economy could be a source of ruin for many an investor, they also presented significant opportunities. Fast forward to 2018 and against this more modern backdrop, Philip still identifies with the contrarian approach to his investment strategy and believes alternative thinking can land some bargain investments, particularly in the real estate market.
“Property has always been a key focus in building my family’s investment portfolio,”
“It’s all about buying well, at the right time and to me, that time is when the property market is out of cycle. Most of the money is made when you make your purchase. I’ve always appreciated suburbs and areas that weren’t popular at the time, but you could see their potential.
“A prime example is New Farm right here in Brisbane. In the 90s it was out of favour as a residential location. It was known as a low socio-economic area with a shady reputation. Look at it now, it’s a prestige address.”
The numbers back up Philip’s statement. According to Corelogic, back in 1990, an investor could purchase in New Farm for under $200,000. Today, the median house price sits at $1.63 million*.
Being able to spot a bargain during a downturn in the property market isn’t simple. Philip takes a “helicopter view”, assessing suburbs from above to see what infrastructure and amenities are currently available, and the potential for future developments that could add value.
That could be access to public transport, planned entertainment precincts, retail centres, education institutions. You must take a holistic view and think beyond what the location is now, to what it might look like in the future. Broader economic factors such as employment and migration should also come into play when considering your investment strategy.
Some of Philip’s more astute selections have seen him employ a buy and hold strategy until in time, the properties have become suitable for medium-size residential development.
“You have greater control over property than other assets. Some simple renovations can vastly improve its presentation and add value, and the property itself will appreciate over time,”
Despite being a huge advocate for property investing, Philip is also a big believer in creating multiple income streams to fund a comfortable lifestyle.
“Property has been good for my wife and I, but it should only form one part of a wide-ranging investment strategy,” he said.
“Diversification is important in the creation of any balanced investment portfolio.”
*Corelogic: New Farm median house prices based on sales 1 July 2017 to 2 July 2018.
This advice is general advice only and does not consider your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances and we recommend that you seek personal financial product advice on your objectives, financial situation or needs and obtain and read the relevant product disclosure statement before making any investment decision.