Future thinking should be shared. With that in mind our team publishes insights weekly to help keep you in the (k)now.


Hewison Private Wealth - Insights
Hewison Insights
Australian Foundation Investment Company

Get rich slowly

Glenn Fairbairn
Director/Private Client Adviser
12 Oct 2015

On 7 October my colleague Nathan Lear and I attended the annual general meeting (AGM) of listed investment company (LIC) Australian Foundation Investment Company (ASX: AFI). AFI is Australia’s largest LIC with a portfolio of almost $6.6 billion at financial year end 2015. It has managed a portfolio of Australian company shares on behalf of its shareholders since 1928. 

It was reassuring to hear AFI’s Chairman Terry Campbell reiterate in his presentation the philosophy of “getting rich slowly.” Hewison Private Wealth has been guided by this approach during its 30 year history, where it has shown to deliver strong performance for our clients’ investment portfolios. To “Get rich slowly,” investors must not act on “the noise” in the market in the short term, reinvest dividends paid, and benefit from the long-term effects of compound earnings.

AFI invests in companies for a long-term period of 15-20 years and, although the market has been volatile in the short term, its long term returns have still enabled patient shareholders to build wealth. Considering recent market commentary has been overall very short-term focused, Mr Campbell’s comments were refreshing.

Importance of a long term view

While we always value and find interesting financial experts’ views on the economy and investment markets, it is reassuring when those views are measured and focus on longer-term outcomes, rather than what is making the news day-to-day.

As we continually advise our clients at Hewison, investing is about identifying assets that you would be comfortable holding for the long term and then being patient. Quality assets are those that are able to withstand volatility in the share market over the short-term, but deliver value to investors over the long term.

Outlook for Australian market

Mr Campbell closed his presentation with some general comments on the Australian market. The key points were as follows:

• The domestic economy is sluggish

• Many Australian companies are finding top line earnings growth difficult

• Changes in the Chinese economy will likely affect Australia

• Advanced economies will see slower growth

• Falling Australian dollar may assist Companies 

• Interest rates will likely stay low in Australia

• We are currently in a market for stock pickers

The information provided above is general information only and individuals should seek specialised advice from a qualified financial adviser. Please contact Hewison Private Wealth for more information. 

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.