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As mentioned, this is an introduction to MSP. MSP stands for Managed Strategy Portfolio.
So there’s a couple of different services, the Investor Unity offers, or I should say there’s two primary categories of services that IU offers offer. We’ll talk about those, but this one is, this session, I should say, is focused upon the managed strategy portfolio or more broadly focused upon clients and people, humans that prefer to have the markets or in certain investments in the markets handled for them, so they don’t like to look at charts and analyse risk and consider macro concerns or micro concerns and place their trades and manage their trades and that sort of thing. They want a hands off. Type approach as we term it. So more specifically, I suppose it’s, we’re talking about high performance alternatives for the world’s largest markets.
Now performance is something that is published live, and we can I’m happy to go through performance in as much detail as possible, most importantly, and a little bit, broadly speaking, I suppose, these concepts of high risk, low risk, medium risk, whatever it may be. They’re not one size fits all type concepts..
So depending upon where you are, what you’ve done in the, where you are in your life, I mean, what stage you’re at in your life, what sort of investments you’ve had in the past how readily you can understand the sort of concepts we’re talking about tonight. It all bottom line really is that one man’s or one woman’s risky is another one’s conservative and vice versa. As I say, they’re not one size or fits all type concepts. So whether you consider any opportunity, whatever the investment is, they all are. In our case, in your case of in, of investor unity and the case of the MSP service, they’re tailorable. So the same approach, which is founded upon very time tested long-term principles. The strategy itself has been running for coming on six years now. The principles underlying are much older and more time tested than that. But it irrespective of the principles, they’re all apply to the same person people, same clients in the same way.
Everybody gets the same approach, but we can adjust the performance, which means adjusting the risk. According to your preferences. So we have clients from all walks of life. A lot of them, in fact, a large portion of them are retirees or coming into retirement. You know, highly encourage you all to understand this tailorability aspect of the of the performance. We’ll just progress forward and I’ll try, hopefully I can paint the picture a bit more clearly as we go through. But again, ask any questions as we go through and. And yeah, we’ll see how we go.
Alright, so a few things to consider here in terms of the sort of thought processes and decision making process you go through when you look at any investment.
Four components that we’re gonna be focusing upon this evening. Security and setup performance, as I say, strategy and approach, and the tailorability aspect as I mentioned. Okay. So now just a quick history of investor unity, myself and some of some of the some of these concepts and how they relate to our clients. And basically that’s some of the challenges that are faced by a lot of Australian investors. And Others. So that’s me there, by the way. So you can put a face to the voice. Adam La Vars, once again is my name. I’ve been in this industry since a little bit before 2006. In fact, it was couple years before that in a fairly informal way, but licensed since 2006.
That’s when it all became official, you might say. Currently licensed or accredited under ASIC standards, I should say, to to advise on equities, currencies. and also derivatives. So Investor Unity is something that I launched in 2012, or I should say I officially launched it in 2012.
And it was basically launched coming out of a career in the corporate world. So I worked for a couple of the big brokers in Brisbane and also in Sydney, couple of the big international brokers. And I wanted to leave the corporate world for a number of reasons, and one of them was just this lack of independence that you, you find in the financial industry, in the financial world, you might say, which makes it tough for tough from, put it this way this word independence is thrown around. But what it really comes down to is whether or not you as a financial markets professional and having a relationship with your clients, whether or not you’re actually. Able to be completely honest and upfront and tell them the truth about what you, as far as you see it, of course, to the best of your abilities about what you can, may consider to be best for them.
Now, that’s something that’s very much lacking in the financial services industry, as many of you know already. And as, as much as there are the, these various companies are filled or at least partially filled with good people. , good professionals, young and old. Their hands are very much tied in terms of what they can actually advise their clients to do according to what sort of products they actually have at hand.
So, I didn’t like that approach. And as I got a little bit older and wiser within the industry, a little bit more experienced and kept dealing with more clients from different walks of life I didn’t want to to be held back in that sense. So I launched Investor Unity just to be completely independent.
And what I mean by that is that, again, unlike. The way in which the term is thrown around the industry in terms of independence, in, in air quotes there. What I really mean by that is that not only are we not beholden to any particular Bank or any, a certain list of approved products such, but completely independent in the sense that we’re not beholden to any particular strategy market type broker or anything else, basically.
So we’re taking an entirely agnostic approach to that, to the markets, entirely agnostic approach to client success and as much as is humanly possible Interests and align alignments is with the clients and their long term success. So even to the extent of the strategy that we’re gonna be talking about this evening, it’s it’s actually not my strategy as such.
It wasn’t designed by me, it was designed by someone who has mathematical skills far in excess of my own. But it is something that we offer to the. The point I’m trying to make there is that even the strategy that we’re gonna be talking about this evening is not something that we’re, that I’m married to.
If it doesn’t. Work for clients or if it didn’t work for clients, if it didn’t have the history of success that it does, then I would allocate capital away from that, allocate risk away from that, and clients would then therefore gain exposure to it and new strategy. So that’s just the way it works in terms of my interests and in terms of the information slash education, you might say that I present to clients.
Moving forward, Managed Strategy Portfolio and the hands off side of things is the focus for tonight’s session. As I mentioned now we’re gonna talk about the four components of this, and we’re gonna start with security and setup because that is very important.
And so obviously we wanna try to put people’s minds at ease when for something as important as as that. And for those of you that have been to presentations before, when you’ve been through you, you’re looking at something and it looks fantastic, and then you get to the end of the presentation and they hit you with a big catch on big price tag or whatever it is. Let’s just be clear about where we are where we’re going with that one. Nice and upfront. So, there’s no setup, administration management, monthly fees or exit fees for the managed strategy portfolio. Service, the MSP service. No lock in periods or nasty catches. Funds remain in your account with the broker. Of choice. So this is a brokerage only service. You only pay for your trades. You only pay for trades that occur on your account as part of the service. So you don’t pay any upfront fees or any any other lock in, freeze fees or anything like that. Funds re on that important point there, funds remain in your account with the broker of choice.
So in, we’ll talk about the relationship between investor Unity and the broker and the parties involved, et cetera, et cetera. But, you don’t send funds to Investor Unity. You set up your own independent account and you authorise investor Unity to connect it up to the service so that you receive the the benefits of the strategies. Okay. So, Investor Unity neither receives nor has access to your funds. We only have the authority to place orders on your account. We can’t withdraw money, which is a good thing to know just in case. Services ultimately are very easy to set up and extremely easy to monitor and withdraw from.
So, people come into this sort of investment with a number of different goals in mind. Some people are looking for long-term growth. Some people are looking for income generation. it. Some people are looking of course for a little bit of a combination. Bet between the two. We’ll try to talk about some of the ways in which you can achieve the variations of that if we, if I have time.
But on the funds administration side of things, it’s extremely easy. If you want to take out a bit of your funds for whatever reason, that may be take out a bit of your profit. For example it’s just as easy as jumping online to, it’s an online banking equivalent type setup. Put in your details of course, and hit the withdraw button and it’s back into your regular bank account, usually within 24 to 48 hours that is. . Okay.
Now what else do we, what’s next here? So who provides what? This is an important one as well especially following on from the previous slide of course. So there’s the broker slash custodian, and then there’s investor unity. So this is, this confuses people a little bit sometimes because the word broker is another one of these things that’s not very clearly define. So that’s the sort of setup that we have for our clients. You set up an account with the broker slash custodian and then IU investor Unity ourselves, myself, we actually provide the strategy the actual implementation of the strategy, you might say.
So basically again, there to lay it out, list it out. The broker provides the trading account slash platform, the account administration. So if you need its statements, withdrawals, adding funds, updating your bank details, whatever it is, it’s all handled by the broker slash custodian. They’re also securing your funds on deposit as the custodian, and that’s secured via Westpac.
So there. You can actually use a number of different brokers, but the preferred broker is Fusion Markets and they’re part of the Glen Eagle Asset Management Group. So, Glen Eagle, the Glen Eagle Asset Management Group, been around for some 30 years under the highest of ASIC licensing available. Very good reputation in the industry. Several hundred million dollars under management. Funds are held with Westpac, so it’s a secured Westpac client trust account. Now, IU Investor Unity, providing the market strategies, the strategy allocations. So, Risk customisations and allocation to various strategies, if that’s what you want to do.
The charitability tying in with that, of course, and any kind of advanced guidance. So bottom line really is that the broker is looking after your funds and will provide you all of the basic support and basic administration, et cetera. Investor Unity, IU provides the strategies and . I’m also here if you want to talk about strategies in depths or markets or any sort of advanced kind of concerns that the basic sort of support that you get from the broker. It doesn’t cover. So, anytime you want to talk to me about anything really, anything industry or market related, then get in touch and get in touch and I’ll I’ll take you through it in as much detail as you like.
So the actual structure there to hopefully paint the picture a little bit. More clearly or as clear as possible, hopefully is looking something like that, which is basically illustrating that every client has their own separate individual account. What you’re really doing, in fact, is you are setting up an account as if you are going to manage it yourself, as if you are going to trade it yourself with your own strategies or whatever, and then what you’re doing. From there, once it’s set up and once your funds are deposited into the Westpac account, you don’t need a Westpac account, by the way. It’s all handled through the broker. So once your account is set up, you then take a final step of authorising investor unity to connect your account to the master account, the master portfolio, the managed strategy portfolio that is, and all that basically means is that we use utilising the magic of technology, of course. Apply these strategies to client accounts. Bottom line, really when we place a trade for ourselves and for the rest of our clients, you receive that trade on your account also simultaneously. Automatically. And Instant or automatically adjusted to your account size, et cetera, et cetera, and automatically adjusted to any custom risk settings that you have in place at the moment. Okay. So I hope that makes some sense in terms of the the overall account set up. But that’s basically what you do. You set up your own account, authorise us to connect it to the master strategy, and that’s how your trades end up in the markets, and that’s how your funds are secured through Westpac.
Okay. And in terms of ongoing management, once you’ve got the service in place, once it’s established for you, you have your online platforms there that you can jump on and take a look at any time you like 24/7 access across all device types, your tablets, your phones, your. Whatever you want. And that also allows live performance monitoring. So, what I say to clients is that in terms of transparency is the next best thing to coming into the office and sitting down next to me when a trade is entered into or exited out of. You will see that instantaneously on your account. So, I can close the trades out or you can if you don’t like them for whatever reason, you still have control over your own account if if you get worried about something for some reason. But yeah, it’s, it really is as transparent as you could possibly hope for. And these platforms as well. Not only do the, do they allow you to monitor the performance live in real time as it’s happening, but if they, it’ll, they also allow you to see your trade history, print out your statements. You get statements automatically emailed to you. But if you ever want to. Run a statement or run a report across a certain period of time, you can jump onto the platform and do that too. So, very convenient there. And those, that sort of online access also gives you access to the fasts and fast withdrawal and deposits as I mentioned.
Now, next on the list here is performance. Let’s talk about performance. Everybody likes to talk about performance. Of course, we’re all like after performance at the end of the day and the start of the day. And all these companies out there in the, on the internet and everywhere else, they all love to talk about the performance. What I want to try to give you is a balanced perspective, a much more balanced perspective than You, you might get otherwise perhaps. Of the other side of performance, which is of course risk.
The risk and performance are the same thing. Effectively, they’re two sides of the same coin. Now, generally speaking, when you get out there and start chasing higher performance, it comes at higher risk. And so the real consideration that I’m always advising my clients to, to take into consideration. The ratio between the performance, the growth relative to the risk that needs to be taken in order to achieve that. And I’m not just talking about the. MSP or strategies or investor unity. This goes for any investment in any market, whether it’s equities or real estate or whatever it is, it’s always risk relative to performance.
Okay, so what’s risky? What’s conservative? What’s assertive? What’s somewhere in between On the spectrum there, risk and performance is tolerable, as I say. Now the adjustments or the sort of flexibility of the service. In terms of the tolerability of the risk is set at the beginning, which means that when you set up your account and you get it connected up, that means that that means that you’re going to receive the default risk slash performance settings, which is what we’re gonna talk about in addition to the customised wants.
But everybody gets the default by default, the standard settings. If you want something different, whether that be lowered risk, a more conservative investment, or if you want a more assertive slash aggressive investment, then you just have to let me know. Now that can be set at the beginning. Or if the situation changes somewhere down the track, meaning that if you’re going on holidays for three months and you don’t wanna worry about things at all, you can dial it down.
Do you just send me an email and I’ll reduce the risk setting on your account. or conversely, a lot of clients like to start out on the standard settings or start out on a fairly conservative setting, whatever they’re comfortable with and just to see how the performance goes for a few months perhaps. And then once they’re com more comfortable with the concepts and the company and the strategies and. Everything like that they can then let me know we can increase the performance settings for them, increase the performance slash risk. So, it’s really all there for you. And I really wanna stress this because as soon as you start talking about things like high performance or if you start talking about especially this day and age with everything that goes on the internet if you start talking about alternatives, then people immediately equate that with high risk. Well, it can be high risk if you want, if you really are chasing the extreme high performance.
But it can also be operated in a very conservative way again, relatively speaking and on a according to your preferences. And that’s just the real point there. It’s just a adjustable according to you, not according to what someone else claims as gospel to be conservative or risky.
Let’s have a look at that then. Okay. So, again, transparency is important and all of these figures are available to you. There’s a brief brief snapshot of a few of these things on the site and also on the website there is a much more advanced calculator that you can use to, to put some of these figures in perspective.
And if you want to go through this, these with a fine tooth comb, I can send you a spreadsheet history of everything. Or better yet, you can get in contact with me and we’ll do a screen share and we’ll clarify any of the terminologies and figures and. Implications, considerations and variations and all the other type stuff.
But that is the performance since inception for the core strategy as mentioned. And so, running since early 2016. As you can see there. Now, important to, to take into consideration is the difference between the red line and the yellow line, as you can see. On screen here. So, a lot of people see that red line and they think it’s too good to be true.
Well, it is very good. Once again, I didn’t design this strategy. It was designed by much more of a mathematician type quant as they’re known. But that red line is the closed out profit. So that’s actually a profit that’s accumulating in your account as cash effectively now, the yellow line is the value of the account or the equity as it’s known.
So these draw downs as they’re known, these downward fluctuations draw downs or decreases in paper loss, the paper loss value or the decrease in value while your trades are still open, while it’s still holding onto. The positions, basically. So the long-term growth there, you can see is significant, certainly solid at the least now. And a lot of my clients, more experienced traders, so, they, they under understand very well sometimes too well what drawdown is. For those of you that are newer draw down basically just means a, as I say, it’s a downswing in the value of your account. And so we can look at the draw down figures there. The biggest draw down occurred back in April, 2017. So about a year into the strategy. The strategy was actually adjusted following this, because prior to this, it was trading a little bit more. Or prior to this point here, I should say it was trading a little bit more aggressively slash assertively.
So generally speaking it’s quite conservative, certainly by indu industry standards, but it was made further conservative from this point. At this point, moving forward, there’s been some open, again, paper loss draw down, as you can see for the last few months. Now, this is exclusive and it’s quite important to understand this. This is exclusive to. Euro G B P. So this full history is there and available for you to to take into consideration. You can see here generally on a month by month basis in terms of the profits that are closed out, actual cash received type profits. It’s quite steady and quite consistent. And lo and behold, Murphy’s Law, whatever you want to, whatever you wanna call it, but to, to in line with this presentation, we’ve just had the worst month on history, in fact with with the drawdown of some 3.83%.
So some of these figures can be confusing, of course, because if you see a big, nasty looking downward bar like that. It can be somewhat cause for concern, but in actual percentage terms, which everyone needs to take into consideration primarily. Of course, it’s 3.83%, which is you know, that’s a slow morning for a lot of stocks out there, especially ones on the asx.
So, that’s the long term trajectory as you can see there and the important thing, of course, is to consider the potential profit in relation to the potential drawdown there being based on the largest in history being some 24.67%. . So now I encourage everyone to take all this to consideration, put it in perspective, relative of course, to their own portfolio. Of course, their own goals, personal preferences and everything else. And also in terms of other. More quote unquote traditional type investments. So, for example, we can see there that or we can we can consider that the A S X and the s and p 500 in the US and equities as a whole, even though they’ve had their best 10 years on record, by most measures they still haven’t produced, call it 350 and importantly they haven’t had this kind of consistency and they’ve also had much larger drawdowns than 24.67%. So depending upon how diversified you are and where your capital is concentrated to in terms of equity allocations you’ve had. Much larger drawdowns, 24.67%. But even the index itself even the s and p index. So, all relative, of course, that’s what we need to take into consideration.
Now, on the tailorability side of things, that’s where we’ll get into some of the uh, some of the the details, but, Yeah, the E, everything is here. If you want to go through it in more detail, let me know. As I say, some of my clients are much more experienced traders, so we can discuss Z-score and sharp ratio and profit factor and those sort of things.
But in bottom line terms, it really just comes down to whether or not you are prepared to accept. X amount of risk for the potential returns on the basis of the consideration of the probability of the continuation of this type of performance. So, you know, that’s really what it all comes down to. Risk versus reward relative to probability. So some of you understand these concepts as I say.
The other thing to, to take into consideration is the largest loss on a single trade is some 2.2 percent. The other one that most people like to focus on is the accuracy rate or the win rate. So it’s averaged out there at 78.5%. So 78.5% of the trades are profitable.
Okay, so let’s consider the, the approach, the overall approach that is. And when considering these things, it’s obviously very important to consider what it isn’t or what, or the things that we want to avoid just as much as positives on the things that we do want to do. So one of the things we don’t wanna do is engage in any high frequency, high risk unsustainable or exotic type methods. Exotic used to be. Much less exotic than what it is nowadays. Nowadays, exotic means investing in some digital token that may or may not exist somewhere in the world or not at all.
So to put your mind at ease, none of that. Ultra crazy exotic stuff is, or even mildly crazy, if you ask me exotic stuff is is engaged in at all. Our clients are risk averse. They understand there’s risk involved in all investments, but they want to make sure that they’re not exposed to any sort of disastrous type risk or catastrophic type risk. And so all of that stuff is avoided. Please be rest as assure about that.
So, we also speaking more generally don’t wanna be overly relied upon any particular market conditions or market type. So we don’t wanna be restricted to equities or currencies or anything at all. This is more broadly speaking about investor Unity’s approach, where, as I say to my clients, we want to find opportunities where they are and not just where we want them to be. So again, that comes back to that agnostic approach or that first principles type approach is the that’s the buzzword nowadays anyway. We don’t wanna rely upon a buyer only or always in the market. type approach. It’s there’s nothing wrong with the approach. It works, it usually works out pretty well over the very long term. It’s high probability, lower return. But with this type of service, we are doing things differently and we are going after benefits that come with that, mainly higher performance. And greater flexibility, greater risk controls, and true diversification.
So the markets, as you know, are all very much intertwined and interrelated or correlated. So what that means, of course, is that, well, we used to say that when the US sneezes Australia catches a cold, and markets are just very much interdependent. Of course. So a lot of people out there like to talk about these ideas of diversification and they think they’re diversified because they’ve got 30% in financials, 10% in utilities or whatever the case may be. But for whatever reason sometimes they understand it and they put up with it nonetheless. Sometimes they don’t understand it and they’ve just sort of gone along with their advisor. Sometimes it’s worse than that. But in any case with that type of approach, you might think you’re diversified. But in the reality is you’re still exposed to the whims and folleys of the global title type forces. So in other words, when something terrible happens, the all the markets go down. Everybody panics, everybody sells. And it doesn’t matter if you’re holding a good company, a bad company, or somewhere, something in between. . Everybody’s just selling everything and everything just goes down. And so, you know, these things tend to work out over the long term if you’re holding quality companies. But that’s not what this service is in, is intended for. This service is intended for those that actually want true diversification that isn’t dependent upon. The market’s going up forever or it just isn’t dependent upon positive global economic environment.
So what do we want to do? Well, we wanna offer combined strategies within a single account service. So we wanna be able to take advantage. Incredibly important. We wanna be able to take advantage of rising and falling markets or simply stay out rather than just go up and down with the tide. We actually want to be able to time these things a little bit more effectively and adjust the exposure accordingly.
And as I say, we wanna be able to look for growth opportunities, that is where it exists and not just where we want it to be. And just be adaptable accordingly. And so that’s how you get that true diversification. That’s how we’re able to offer the kind of. Relative consistency. So while the equity markets have gone up a little bit and down and dropped around by 50% and 30% here and there, this thing has just remained relatively consistent, again, relative to the to the gains throughout that, that that period.
It has its own dips. It has, it goes through its own. challenges as I say, but at the very least it’s not, these things are less likely to occur at the same time as the various crises occur in equities markets. So you’ve just got balance there that can smooth out the overall growth and profitability of investment portfolio.
Alright. What’s next? Okay, so talk a little bit, bit more about the strategy. Again, a lot of my clients are very advanced. Others are just not interested in that sort of thing. They just wanna understand it well enough to have enough peace of mind to in, to invest, but they don’t really want to get into the ins and outs. So I’ll try to do the best I can. So we’re looking about talking about cons in this section, contrasting approaches. So we’ve got our offer. Warren Buffet on the left there very, takes a very long term outlook. His favorite holding time is forever, as he’s famous for saying he doesn’t really buy stock. He prefers to buy companies and is just basically in the business of accumulating quality assets over time. But inside that he also is a contrarian in the sense that he doesn’t like to just go with the flow necessarily. Certainly doesn’t like paying buying into stocks at over-inflated prices. And just about everybody will tell you that just about everything is over-inflated these days.
Warren, as many of you’ll know, of course, on a long-term basis, he’s basically looking for something that’s oversold and is effectively trading at a discount to its intrinsic value. So Warren and Charlie, if they see something that. They can buy at less than what they think it’s truly worth. They’ll just buy it and add it to the, add it to the pile basically.
Now we want to con contrast that in some. Sense against this gentleman here, his name is Jim Simons, or James Simons, some of you’ll be familiar with him. Warren is quite arguably the most successful value investor in terms of actual returns. James Simons is considered the best in history. His fund, Renaissance Technologies, his firm over the decades has consistently outperformed just about everyone by a significant margin.
Again, not through relying upon market conditions, they trade both sides of the market. Jim Simon’s history is very interesting interesting to me at least. And it includes short-term positions as opposed to Berkshire Hathaway, Warren and Co. Directionally agnostic. And also uses, very importantly, uses what’s known as a quantitative model to take advantage of temporary price inefficiencies, temporary market inefficiencies. So quantitative just means it’s a mathematical model. Are you doing things by the numbers, by the statistics? Allocating risk. Controlling risk accordingly, but as effectively just relying upon the mathematical model, rather than getting caught up in the politics of this, the director’s doing that gossip on the street and all of that sort of stuff, just doing things by the numbers. So believe it or not, we would actually want to combine a little bit of both in this type of approach. But as you can probably guess by now, certainly in terms of the core strategy, it leans more towards Jim Simons and that type of quantitative approach.
Okay, so the approach to the vast majority of population is the very long term buy and hold approach, time in the market, no timing the market as they say which is a totally fine approach over the very long term, and it has a high probability and a relatively low payoff. Things that are high probability, it’s a typically low payoff downside of this, the very long term approach is that it can take a long term time to recover from these types of drawdowns when they occur.
So I’ll just jump across to the markets. Now, if we take a look at the s and p 500 as an example, so you can see there, it’s gone through these big drawdowns, as some of you will know, 36% just over a year ago. The key point there really is that over the long term, the buy and hold approach does work statistically that is, but whenever you are considering taking this very long term buy and hold type approach. As I say, there’s nothing wrong with it, but there’s pluses and minuses of everything, no pun intended. So the downside of the long term buy and hold sort of ultra passive, ultra patient type approach is just that sometimes it does require a lot of patients. So that’s fine. For some people it’s especially fine for the younger types you can put your money in the quality companies. You can accumulate when it goes down and if it takes years to recover, it’s not a big deal. A lot of our clients, however, aren’t really wanting, not that anybody’s really wanting to, but a lot of our clients are particularly trying to avoid having another 10 year period where their their equities go through a large a large drawdown. A lot of our clients don’t want to be patient for another 10 years to sort of wait things out. And so that’s one of the concern things that everybody needs to take into consideration really irrespective of where they are in their lives, because especially when an investor is looking to buy into a market that looks like this. Well, it looks like it’s just going vertical. So we can see if we assume that historic history does repeat itself, which we all know that it does that when things start to look a little bit too vertical, it is perhaps time for a bit of a pause and a bit of consideration.
And so that’s really where we’re at now. I’m not here to predict disaster. I’m not here to predict a crash. If anything, I think we’ve got a few good few years of volatility, fairly extreme volatility ahead of us. That’s my market outlook in a sentence. and the NASDAQ is one of particular focus and everybody loves to say that, you know, they’re great companies, they’re in ultra dominant positions, have cash in the bank and all that sort of thing. But it’s all, but it’s very similar to the sort of things that people were saying back pre.com bust. The other thing that people forget, especially those of. Those who weren’t around during those times, they might have been, it might be a little bit too young to remember perhaps, but it actually took a good 15 years to, for the NASDAQ to recover from this drawdown period.
Okay. A little bit longer than I, in fact, with a an 84% drawdown at its peak there, it’s pretty serious stuff. The ASX is another example of the same principle to different degrees and with different dynamics of course, but the asx went through a 10 year period from 2008. So, all of these things need to be considered, especially in this kind of environment they’re in, especially when everybody likes to claim, high performance during what is really effectively a one way market, with the exception of the, of course, the big exception of the 40% odd drawdowns that occurred in 2020.
Okay. So that needs to be considered. I’m not trying to tell anybody to put their entire portfolio into this particular strategy. I’m certainly not trying to predict that a crash is going to occur tomorrow. What I do very strongly urge everybody to consider is this idea of diversification because everybody likes. Well, everybody likes to tell people that they’re diversified if they’ve got a little bit of banking stuff there, and some mining stuff there, and some utilities there. But at the end of the day, it’s the overall market sentiment. It’s the overall economic climate that drives all of these things on a title level. As I as I mentioned, . So like likes true diversification is the same.
So we, what we’re trying to do here is we’re trying to provide an investment alternative that does have maximum stability, plus also provide a sense of clarity and some true perspective in, in order to properly consider these things for yourself. Because at the end of the day, or at the start of the day, perhaps there’s this clarity that actually comes first in order to help you achieve that stability.
So now let’s talk about the tolerability aspect. Putting this long-term performance picture into a tailored perspective. Now again, the risk and performance is two sides of the same coin in any investment and it’s tailorable. But we’ll look at the average monthly return, the typical large drawdown that is the decrease in investment value effectively. And to keep it in perspective with the largest drawdown, the largest historical drawdown of the strategy.
Now to start to put it into perspective, we’ll talk about the default or the standard settings. So that equates to an average monthly return over the last nearly six years of 2.4%. A typical large drawdown, which occurs perhaps every 12 to 18 months, closer to 18 months, but we’ll say We’ll say 12 to 18 months at 12.5% and the largest drawdown of 25%, 24.67% to be precise, but call it 25%.
Now, again, that’s the standard risk settings. Standard risk equals standard performance. Standard performance equals standard risk, same thing. So one x or basically running in line, or the exact same proportional risk allocations as the master account, the master strategy portfolio. So in other words, in simple terms, if the master account takes a trade and risks 1% of the total account, the total portfolio then your account also would be risking one of your account, 1% of your investment. Now, again, that’s the standard. So let’s have a look at this thing called a multiplier. The multiplier is just that tailorability or that flexibility option. Multiplier is the word. And what that allows you to do is allows you to place a multiplier as a setting, setting on the back end that we do for you to the performance slash risk. So in this example, this column, we’ll look at 1.5 x. So what that means is that, again, if the master account is risking 1% and you have an account set at 1.5 x, then your account would, if it had this setting applied, would be risking 1.5%. Pretty standard stuff. Suggested minimum investment is $10,000.
So, if the master account is risking a hundred dollars, your account’s trading at 1.5 x performance slash risk multiplier, then your account’s gonna be risking $150. Instead of a hundred, just as an example. Okay? But that puts the average monthly return there at 3.6%. The typical large drawdown at 18.75%, and the largest historical drawdown, if you want to use that as a basis of reference at 32.5%.
Now, some of our clients are assertive slash aggressive wherever you draw the line and so they might have a two x performance slash risk multiplier. And so that puts the average monthly return at 4.87%, sorry, 4.8%. Typical large drawdown, 25%, and the largest historical drawdown if the client was trading at two x multiplier at 50% drawdown, so they would see their account decreased by half, which actually puts it in sort of in line with equities investing if you wanted to take historical comparisons. Now some clients, of course, are even more conservative. So again, these are, none of these are one size fits all type concepts. You don’t have to have one x or 1.5 x or two x. You can have 1.3, 1.7, 0.75. I’m just giving you some easy numbers here to work with again for perspectives sake. But if you are perhaps more quote unquote conservative, you might want to even perhaps start at a 0.5 x risk multiplier, which means that your average historical monthly return would be 1.2%, typical large drawdown, 6.25%, and the largest drawdown there at 12. Percent. So if we look at the the long-term performance there at 350, call it 350%, if you were trading at a half risk multiplier, you would get half of that 350 being 175%, and your largest drawdown over that period of time would’ve only been 12.5% . So if you compare that to equities mar equity market investments, it’s actually very solid. Okay? So I’m not trying to toot my own horn here. I didn’t design this strategy. I provide the service and offer it to, to clients as something that I’ve selected and verified and monitor and manage, et cetera. , but designed by someone else with far greater mathematical skills as I mentioned.
But if you keep things in perspective like that, and think about it from the perspective of what might suit you in terms of the potential profit relative to the bumps along the way, whether or not you’re prepared to. Have a little bit of a more of a rollercoaster ride or if you want a smooth ride then hopefully that’ll help you arrive at whatever the right decision for you might be.
Now. Alright, so I think that’s it for the presentation this evening. A little bit overschedule, as I mentioned. So getting started, if you do wanna set up an account and get exposure to this kite of kind of investment, what you’re doing is you’re setting up your own fully independent account.
It’s actually separate from investor Unity. Separate from all the other clients. It’s your own account and you are effectively setting it up in the same way as if you are going to trade it yourself. And then what you do is you go through the process of connecting it up to the master account, and then it becomes part of the service effectively.
So you set up your own fully independent account, you deposit your initial capital to the Westpac client trust account. That’s controlled by the broker slash custodian, which is Gleneagle Asset management. There’s, it’s actually called a fusion markets account. Fusion Markets is, Effectively the specific service, it’s effect, actually a trading name of Gleneagle Asset Management Gleneagle Asset Management, once again, been in business for 30 years. Highest asset regulation you could hope for. And then once that’s all set up, there’s an online form that takes a minute or so, which just authorises investor unity myself to connect your account to the MSP service.
And from there, All that really means, once again, is that when I place a trade for ourselves and for the rest of our clients, you just automatically and instantaneously receive that trade on your account also. And it’s about as simple as that. So for me, you can view your account in real time deposit, withdraw as you please.
There’s no lock-in period, catches, penalties for cancellation or anything like that. It’s your account and you actually are the one that has ultimate control over it. Even though you are authorising investor unity, to just connect it up to the service for the sake of effectively synchronising the orders, the order placement, I should say.
And yeah. Well, if you have any questions by all, punch ’em through to the chat box. If I don’t get to it immediately, it’ll come through to me as an email. If you’re watching this on the live channel, on the website, which you probably are, you can just scroll down the page. There’s some links to further performance information.
There’s a lot of reiteration of the things that I’ve talked about. , there’s some FAQs. There’s a link to go through to the broker if you wanna look at the account establishment process. And pretty much everything you like, you can just scroll down the page and explore. But other than that, if you have any questions, get in contact with me and I’m happy to help you out as much as I can.
But other than that, thanks very much for coming along. Wish you all successful trading and investing.
