Over the last few days, we have started sending out quarterly reports to our investment (including superannuation) clients. And do you know something? Most clients have recorded positive returns for the three months to the end of March, 2012 of 6 - 8%. That's an annualised return of approximately 30%.
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| The All Ords is what now?! |
This has come as a surprise to most, particularly given economic news, and property prices. (We even made sure to send ut the reports on April 2 and NOT on April Fools DaY)
So, happy days are back are they? Well, a good quarter doesn't make a recovery, and I don't think it is relevant anyway (I'll get to that in the next blog).
The problem with regular reporting is simply a matter of relevance. What does it mean if your $300,000 portfolio grew to $320,000 in the last 3 months. Well, it does beat the alternative, and positive quarters haven't been too regular over the last few years. But where you aiming for $330,000? Had you been planning to put contributions in that you haven't? Do you even know what you were aiming for?
Without some sort of context, while it is 'good' that balances rose, it doesn't make much sense, unless we know what your target is.
So why do we send the reports out? Maintaining regular correspondence keeps communication lines open. We are developing some new systems that are designed to better incorporate all of our clients goals (even the ones they didn't know they had), and to track progress towards the achievement of them all. We work on, over time, knowing what we are working towards, and so generating the reports allows us to look at the benchmarks, and track the progress. While this is only one aspect of the 5 elements of our Wealth Management Model , it is the most obvious.
And of course, everyone sleeps a little easier when portfolios are going up.
