Cashcows & Bullseyes

The Cashcow Portfolio

The Cashcow Portfolio is specifically designed to produce tax effective income and is perfectly suited to SMSF’s or any other investment strategy aiming to produce an income stream.

Significantly, because Suncow Wealth measures wealth in time rather than assets and liabilities, we believe this portfolio can play a ‘core’ role in almost any investment strategy.

Here are six reasons why you might consider the Cashcow Portfolio:

  • Low interest rates are impacting your retirement income
  • You need a core portfolio in your SMSF providing income and growth
  • You would like an investment strategy which provides some tax benefits
  • Build an investment portfolio using a relatively low risk strategy which does not rely on the markets going up to create growth
  • You would like to supplement or eventually replace your current income
  • Create an income stream to help fund your children’s education or your retirement

Whether you are in accumulation stage or pension stage, the Cashcow Portfolio provides both short term and long term benefits because of its growth and income characteristics.

Not surprisingly, we believe the Cashcow Portfolio works very nicely with…

 

The Bullseye Portfolio

The Bullseye Portfolio is Suncow Wealth’s signature service.

Bullseye is a unique offering which operates on a ‘Success Fee’ basis. I.e. if the specific stocks we recommend are not successful, you don’t pay any brokerage.

The Bullseye Portfolio works equally well both inside a SMSF and outside super.

You only pay brokerage if the stock goes up.

One of the biggest complaints from investors since the GFC is paying expensive adviser fees for poor or no performance. To overcome this complaint, Suncow Wealth has designed the Bullseye Portfolio.

What this means is you only pay a success fee when you sell and only if the specific stock(s) we have recommended appreciate by at least 10% pa. There are no purchase costs.

Please note – The Success Fee is not a performance guarantee.

Our Goal

Our aim is to identify 4-6 good buying opportunities per year for our clients. Some years we may exceed this benchmark while other years we may not. We much prefer a few strong recommendations which stand a higher chance of performing well than a lot of ‘hopeful’ recommendations which may not. Less is sometimes more.

Our Approach

Suncow Wealth models its investment approach on Warren Buffet, the world’s greatest investor. This means we are only interested in purchasing very good quality businesses (stocks) at a price below their real or ‘intrinsic’ value.

E.g. ANZ bank may be valued at $25.00 but is currently trading at $20.00, therefore representing 25% upside.

Not only does this approach provide the potential for good capital gain, it also helps reduce any downside risk as well. We also use this valuation method to determine when to sell.

The Bullseye Portfolio is also the perfect suitor to our Cashcow Portfolio. It offers investors a well rounded investment strategy providing both capital gain and income depending on their risk profile.

How does it work?

Suncow Wealth operates its own stockbroking facility and is therefore constantly looking for opportunities which meet our strict selection criteria.

When we identify what we believe is a good opportunity, we inform you via email. The email will explain the reasons why we like the stock, how much upside we believe it has and what amount we recommend you invest. (Never more than 10% for an individual stock).

If the opportunity appeals to you, you then sign off on the recommendation and email it back to us. Once we have your Authority to Proceed we purchase the stock for you.

How does Suncow Wealth identify good opportunities?

To identify what to buy, Suncow Wealth uses a combination of paid research and market consensus research to help evaluate opportunities trading below their nominal or intrinsic value.

We then overlay this fundamental research with our own technical analysis (price charts) to identify when is the best time to buy. i.e we don’t want to buy cheap stock when it is still trending down.

Specifically, most of our recommendations come out of the ASX 200 Index. I.e the Top 200 stocks on the Australian Stock market. This usually ensures stronger earnings (and therefore better performance) and sometimes the payment of a dividend along the way, pending how long the stock is held.

What the Bullseye Portfolio means for you…

The Bullseye Portfolio offers our clients a number of distinct advantages:

  • Success Fee we only get paid if the opportunities we recommend perform. This drives a different adviser behaviour and enforces a strong focus on quality advice.

  • We share the risk with you – significant time and cost outlays go into research, admin, communicating with clients plus the actual purchase costs of stocks. These accumulated expenses across all our clients means we take on just as much risk as you do, sometimes more.

  • Less is more – due to the time and costs involved to get a client vested in a stock, it is not in our interests to continually buy and sell or ‘churn’ stock. A few strong recommendations which perform well provide a much better return on time and equity for both parties than a lot of ‘hopeful’ recommendations.

  • Transparency – you are able to see exactly what you are paying for. There are no hidden fees or confusing billing methods like a phone bill. A one page contract note will be dispatched to you as soon as an opportunity is bought or sold and will clearly outline the costs involved (or not involved).

  • Proactivity – you can go about your daily life knowing Suncow Wealth is looking out for opportunities for you to invest in.

What if I want to hold onto a stock when Suncow Wealth recommends we sell?

Sometimes a client may choose to hold onto a stock because it pays a good dividend. If you decide to hold and not sell, you will be asked to pay the brokerage you would have otherwise paid had you sold when Suncow Wealth recommended you sell.

Why is the Bullseye Portfolio not part of the core portfolio?

There are two specific reasons for this:

Firstly, not all clients have the same tolerance for risk. Therefore, by separating the risks and costs of these two portfolios, it keeps the fees down for those clients who choose not to participate. I.e they are not forced to pay for something they don’t use.

Secondly, Suncow Wealth is able to offer participating clients a genuine value add for their investment portfolio’s while mitigating the risk as much as possible. In return, we are remunerated for our performance and therefore produce a win/win for both sides.

Why is it called the Bullseye Portfolio?

Bullseye gets its name from our research methodology which uses a combination of top-down, bottom-up and technical analysis. Using a process of deletion, we continually work towards the middle until we find one or two opportunites we are very comfortable with.

Importantly, different investments have different risks and a way of reducing risk is to diversify your investments. Prior to investing, it is important that you understand the concept of risk, return and diversification and how this may impact your personal situation.

Please note – the Success Fee is NOT a performance guarantee and does NOT apply to your regular portfolio or our Cashcow Portfolio.

Should you have any further questions we invite you to contact Suncow Wealth on 02-9810 8832 to discuss your enquiries further.