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