Our Investment Philosophy
GCR has developed a unique style of investing that specifically suits many retirees, entrepreneurs & business entities.
We call this investment process ‘Active Investment Management + Options (AIM+O)’. This style is only offered to clients who qualify via our financial planning, goals & risk discovery & fact-finding process. This service is a highly personalised service which involves regular monthly points of communication as well as formal reviews each 6 and 12 months.
Not everyone will suit AIM+O and GCR only engages like-minded people who are clearly suitable & want their money pro-actively managed to potentially achieve higher real net returns with clear lower absolute risk.
Strategy Outline:
Outlined here is a summary of the investment process and philosophy that has taken over 15 years of personal trading experience by Mr Gye E. Duncan to design AIM+O.
Qualifying our Client:
The first step in the process is qualifying you, your goals, concerns, preference, income, capital requirements and your expectations. This is more important than it may seem; as if you & GCR are not clearly like-minded, AIM+O strategies may not be suitable for you.
Financial Planning Assessment:
During the financial planning process, we will be able to determine your cash-flow, risk tolerance and suitable investment vehicles for you to invest through.
Investment Vehicle:
Once it is confirmed that you suit GCR’s unique AIM+O pro-active style, we will prepare your individualised Statement of Advice (SOA) and Engagement Client Agreement (ECA) which will include total transparency of AIM+O strategies, systems, processes, risks, profits and fees. If it is confirmed you do not suit GCR’s unique style, we will offer an alternative that suits you or if we cannot help you, we will advise you accordingly.
Many of GCR’s AIM+O clients are Self-Managed Super Funds (SMSF). Many are retirees previously disenchanted with retail or industry super funds. Many are entrepreneurs & business entities requiring or wanting an individualised service not normally available through other professionals or large institutions.
Selection of Investments:
Coupled with a contrarian style of management, GCR uses a combination of investment processes (Technical, Fundamental and Behavioural Finance Analysis) to select and pro-actively trade the portfolio of investments.
At GCR we prefer to work with companies that provide the products & services the community needs to use and purchase. We choose companies with a proven track record and strong cash-flows that deliver regular dividends. This strict adherence to investment criteria means GCR will generally only invest into the ASX Top 50, occasionally companies in ASX Top 100. We avoid investing in Initial Public Offerings (IPO’s).
Portfolio Concentration & Diversity:
We invest only in industries where we understand how they make money, their business strategy and the risks these enterprises are taking to generate their growth, profits and dividends.
We cannot know everything, so we restrict our stock holdings at any one time to between 20-30 companies. Within these companies, we further invest only in ASX listed companies, where there is exposure to global growth and a global revenue base.
We also invest in cash & mortgages (unlisted) funds for diversification, risk and client cash-flow management purposes.
We use unlisted major mortgage funds with proven track records in risk management and consistent stable interest income payments. In particularly, GCR uses unlisted mortgage funds which allows us to mostly disconnect a client’s portfolio risk from the stock market’s volatility.
Portfolio Holdings:
GCR has secured, via ASIC, the licencing condition to operate a full Managed Discretionary Account Service (MDA Service).
This means we are not restricted or controlled by institutional ownership or fund manager bias on the selection of investments, fee structures or brand name. It also means our clients are not exposed to exorbitant institutional overheads, corporate executive bonuses or institutional management decisions that could be made for the institution’s best interest and not our client’s best interest.
Our preference is to cut out all unnecessary middle-men (middle institutions) who, in our opinion, add little value for our client’s portfolio’s net profits. Lowering administrative costs for clients while upholding full transparency and full compliance is another central aspect of the GCR process.
AIM+O (Active Investment Management + Options)
Another central point of difference is GCR does not consider paper profits or paper losses to be gained or incurred unless realised. During our 25+ years of financial advice and services industry experience, we have not seen any retirees able to live on paper profits.
Similarly, paper losses are not incurred as we do not sell a stock for a loss unless absolutely requested by the client.
We can do this due to our initial research and selection of the companies we invest your funds in, pro-active management of risk, our money management system design, and cashflow management within your portfolio. This system is designed so we do not need to sell stocks in a paper loss position.
GCR has no time frame to take the pre-agreed benchmark profit on a stock for clients. We do multi intra-day trade, intra-week trade, intra-month trade or intra-year trade, all depending on securing the benchmark profits. All profits are secured back to cash. This builds security (above a pure passive buy and hold or indexing investing strategy) as we are regularly taking profits back to cash and not exposing clients to potential market bubbles, like the Global Financial Crisis.
GCR then watches the market for an opportunity to buy the same 20-30 stocks at a lower price to then sell when profit benchmarks are achieved. This action is repeated as regular as profits are available to covert to cash.
Additional to stock trading strategies, GCR has the ASIC licencing condition of Derivatives limited to Options Contracts.
GCR regularly writes (sells) Options over the major 20-30 stocks in the client’s portfolio. The particular Options trading strategies GCR uses are Covered Call writing, Short Put Writing (100% cash covered), Straddles, Strangles.
We also can Short or Long the ASX OJX Index (S&P/ASX200) for either specific profit opportunities or risk portfolio management purposes. These particular strategies are fully discussed and signed-off by engaged clients before implementation.
Over the years, we have found that by trading and writing Option premiums to generate additional income for clients, GCR often achieves higher consistent net profits with lower risk (volatility) for clients. Naturally, GCR cannot guarantee any future returns and past performance is no indication of any future performance.
GCR does not expect AIM+O to suit everyone, although we have found it has helped many retirees, entrepreneurs and business entities obtain their risk assessed goals and objective.
We wish you all the best in achieving your investment goals and if you feel our style may suit you, GCR will be happy to see if we can help you.
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