Investment & Portfolio Management

Benchmark Financial Services > Portfolio Management

Investment & Portfolio Management

Benchmark Financial Services > Portfolio Management

Valuable investment advice to build a long term wealth investment strategy

There is a range of issues to consider when investing in the markets to accumulate wealth. At Benchmark we have a network of research providers and contacts that assist us in providing valuable investment advice to clients. Our advice process and strategies cover areas including managed fundsterm depositsgearing, investment savings plans and diversification.

Below is a chart indicating the benefits of having a Benchmark Financial Services adviser to build your long term wealth accumulation/investment strategy.


What are shares?

A share represents an ownership in part of a company. As a shareholder, you have an interest in the financial performance of the company and have the right to benefit from profits. Profits are paid to you through share dividend, and you can also benefit from an increasing share price. However, with financial gain also comes the risk of loss. As well as share prices going up, there is also the risk of them going down and if performance is poor, a company may not pay dividends to shareholders.

Shares have the potential to also deliver some taxation advantages, compared to other investment assets. According to the Australian Stock Exchange, “For Australian investors, dividends are often worth more than the cash payment they receive. This is because where companies have already paid tax on their profits, tax credits known as franking credits, may be attached to the dividends the company pays to you. These franking credits can be used to offset tax payable by you on other income. In addition, shares held for more than 12 months qualify for a 50% discount on any capital gains tax payable”.

Shares are also known as stocks, listed securities or equities. Within Australia, most companies that offer shares to the public are publicly listed on the ASX (Australian Securities Exchange).

Shares can be held in a number of ways for example, in a superannuation account or an Investor Directed Portfolio Services (IDPS) account. They can also be held directly.

What kind of goals can shares be used for?

Shares are usually considered an important asset class when capital growth is the desired outcome for a medium or long-term savings and/or investment goal.

Managed Fund

What is a managed fund?

A managed fund brings together the assets of many investors into a single investment. The managed fund can include a variety of assets including property, shares, international shares and cash. They can also be geographically focused such as Asia or Australia, or focused on a single asset class or specific industry sector.

A fund manager runs the investment and pools funds according to an investment objective, philosophy of strategy. There are over 100 fund management firms in Australia and many of them offer several kinds of managed fund products.

Investors hold ‘units’ in a managed fund. The price or value of those units moves up and down like a share price does.

What kind of goals can a managed fund be used for?

A managed fund can be used for a medium or long-term savings goal. They can provide investors with a higher level of diversification and access to the skill of expert investment managers.

Term Deposit

What are term deposits?

A term deposit is a deposit of money with an Authorised Deposit-taking Institution (ADI), usually a bank or credit union. Your money is held for a fixed period with a rate of interest for the period of the deposit. It is annualised if the term is less than 12 months.

The following features can apply:

  • A term deposit usually offers a higher interest rate than an everyday savings account.
  • The period for your term deposit can be as short as three months, up to as long as five years.
    A term deposit is also known as a fixed deposit.

What kind of goals can term deposits be used for?

Term deposits can be used to achieve your short, medium or long-term savings goals. They can provide you with access to regular returns and the return of your deposit at the end of the term. However, since it is generally considered a low risk investment option, a term deposit might not be the best performing asset over the long term.


What is gearing?

Gearing involves borrowing money to invest in income producing assets such as shares or managed funds. This can provide you with opportunities to build your wealth.

Gearing involves a higher level of risk. Not only does it place your investments at risk, but also you may end up paying debt interest on assets that have fallen in value due to adverse market movements. Gearing may be tax effective, but it is only profitable if the investment returns exceed the after-tax cost of borrowing.

By taking out a loan, you will be required to pay interest until the loan is paid back. Depending on the type of loan, some security will generally be required.
Using a gearing strategy means you will acquire debt. You will need to consider the advantages and disadvantages before embarking on this kind of strategy as both returns and losses can be significant when compared to investing without gearing.

Negative gearing occurs when the return is less than the borrowing costs and is only beneficial if the excess tax deduction can be used to offset other taxable income. For example, where the dividends from a geared share portfolio are less than the interest payments on the loan used to purchase the share portfolio. Under present tax rules, you can claim the loss as a tax deduction against other taxable income and this can provide you with a benefit.

What kind of goals can gearing be used for?

Gearing may be suitable for people who:

  • Wish to accumulate wealth.
  • Have a more aggressive risk profile.
  • Have a long-term investment horizon of at least five to seven years.
  • Are comfortable with the risks of borrowing to invest.
  • Have a stable and reliable cash flow which is sufficient to meet loan repayments.
    Are on a higher marginal tax rate.
  • Have insurance to cover loan commitments in the event of illness or death.

Investment Saving Plans

What is dollar cost averaging?

Investment markets fluctuate, making it difficult to choose the best time to invest. One strategy to cope with the risk associated with investing in volatile markets is DCA. DCA involves investing a set amount on a regular basis, no matter whether the market is up or down.

The advantages of this strategy are:

  • You effectively average the purchase price of your investment because you have bought at both high and low prices over time. When the unit price is high, you buy fewer units. Alternatively, when it is low you buy more units for the same investment amount.
  • You reduce the risk of investing at the least favourable time.
  • It can be used as a long term ‘forced’ savings plan, in order to build wealth with funds that you would otherwise spend on items that you may not even need. These plans are flexible and can be increased/decreased/stopped at any time.

What kind of goals can dollar cost averaging be used for?

Dollar cost averaging may be suitable for people who:

  • Wish to accumulate wealth.
  • Wish to reduce the risk within their investment portfolio.
  • Are able to make ongoing contributions to their investments.


What is diversification?

Diversification refers to spreading your investments across a wide variety of asset classes to reduce investment risk.

Each of your investments can perform differently at different times of the economic cycle. It is impossible to predict which of your investments is going to be the best performer from one year to the next.

There are generally four ways a financial adviser can implement diversification as a part of your investment strategy. These include:

  • Using different asset classes (shares, property, cash/term deposits).
  • Using a range of investments within each asset class.
  • Using different fund managers to manage these different assets.
  • Using local and international investments.
  • Spreading the timing of your investments (known as Investment Savings Plans/Dollar Cost Averaging).

What kind of goals can diversification be used for?

Diversification may be suitable for people who:

  • Wish to reduce the investment risk and volatility within their investment portfolio.
    Wish to accumulate wealth.
  • Are comfortable in holding different kinds of assets within their investment portfolio.


I am very grateful for the personal touch which Rosanne and David have always provided with my financial planning. They have always advocated the long term approach and my Portfolio has experienced excellent growth as a result. I have had a very long term association with Rosanne, David and John & I look forward to continuing to plan my financial future with their professional guidance.

L. KULPA (Cheltenham)

Thank you sincerely for the generous amount of time spent on advising me on all financial and insurance matters. After making a significant professional change, John made me aware of the need to reassess my income protection insurance cover. As it turns out, the new policy which I purchased as advised by John, covered me for my recent out of work accident.

Alan Silver (Commercial Airline Pilot)

Thank you sincerely for the incredible assistance and advice regarding the insurance claim made recently for lost income due to illness. I recall how Rachael made me aware of the need to reassess my income protection insurance cover many years ago and thinking I would never need it. As it turns out, the new policy which I purchased as advised by Rachael, covered me for my recent illness which caused me to not be able to work for 3 months.

John Groenendijk (Southern Cross Hotel)

Rosanne, David & John have managed my Portfolio for 17 years now and in that time their service has always exceeded my expectations. They continue to ensure my financial needs are met and that I am fully informed with the reasonings behind their recommendations. I feel very comfortable knowing that Rosanne & David are managing my finances and have full confidence that their approach to financial planning will continue to produce excellent results for their clients.

C. Carson (Nth Melbourne)

All good businesses to be successful need to be credible and have honest and reliable people directing and working for them.Some fifteen years ago prior to my retirement I was looking for a sound financial adviser to look after my assets.

M. Chestney (Brighton)

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