Guess what?
Our final numbers are out now.
They’re looking incredibly positive.
For our Managed Account Service, we saw a monster Santa Claus Rally during the final two months of 2023. This gave us strong back-to-back gains for our Eligible and Wholesale Clients:
- In November, our composite portfolio was up +8.79%.
- In December, our composite portfolio was up +6.72%.
- So overall, for the year, our composite portfolio was up +19.91%.
- Historically, this means that 2023 has become our best-performing year since 2019.
How did this happen? Well, we are always aiming to capture contrarian opportunities. And in 2023, we saw a golden opening in REITs — real-estate investment trusts. In simple layman’s terms, here’s what it means:
- Just imagine a house that’s valued at $1 million. It’s available in a good neighbourhood. It comes with wonderful tenants. Everything is high quality.
- However, through a stroke of luck, you are given the chance to buy this property at a 30% discount off its fair value.
- This means you can potentially acquire this $1 million house at $700,000. Why wouldn’t you?
So, in a nutshell, this is exactly what we saw happening on the stock market in 2023. A rare opportunity to buy into undervalued assets like childcare centres, shopping malls, and warehouses at scale:
- REITs with strong occupancies of 95% and above, as well as debt gearing of 40% and below may look particularly attractive.
- With hindsight, we now believe that the price floor for many of these assets happened in October 2023. Since then, the stock prices have started to surge up. They have simply proven themselves too cheap to ignore. Perhaps offering an ideal mix of growth and income.
- Of course, it must be said that past performance is no guarantee of the future. It never is. But right now, many commercial property stocks are looking cheap relative to the book value of their assets. This is because this sector has been whacked, walloped, and pummelled by interest-rate fear.
Source: Business Insider
Here’s why capturing this opportunity matters to us:
- As inflation recedes, central banks around the world may be in a position to ease their foot off the gas pedal, then carefully bring rates down. In fact, over 152 rate cuts are projected to happen across multiple countries in 2024. This is the biggest such move since 2020.
- You must remember — the market is a highly evolved animal. It is muscular. It is dynamic. Its primal instinct, first and foremost, is to seek out growth and yield. So, as the interest-rate cycle turns, the market is already hungry and pricing in the next 12 months.
So, here’s the stunning division that we’ve seen in our Managed Account Service:
- Most of our Eligible and Wholesale Clients had courage. They saw the urgent opportunity. They introduced funds. So we were able to buy global assets for them during the weakest stretch of 2023 — August, September, October. As a result, their returns were greatly amplified.
- Sadly, a few people chose to sit on the sidelines. Doubting, hesitating, wavering. They failed to act. They failed to be decisive. So, ultimately, they lost out on the chance to lock in potential gains for 2023. It’s a damn shame.
So, here’s my observation for the investment journey ahead:
- Over the next 12 months, we will see a sharp contrast once more between those who choose to act versus those who don’t. It’s the dichotomy between courage and fear; action and inaction.
- Yes, there will be market dips in 2024. Yes, there will be moments of volatility. But as value investors, our mission is to push forward. To adapt, improvise, and overcome.
- In the words of Mellody Hobson: ‘The biggest risk of all is not taking one.’
Our Quantum Income Strategy
So, what are smart investors looking for in 2024?
- Better prospects for capital growth.
- A stronger stream of passive income.
- Diversified wealth protection.
You could achieve all this when you choose to buy into global assets on the stock market:
- This is what we’re focused on with our Quantum Income Strategy.
- If you qualify as a Wholesale or Eligible Investor, we can help you set up and manage a global brokerage account.
- We have our eye on investment targets in Australasia, Europe, and North America. We are especially keen on resilient sectors like property, infrastructure, and energy.
For our target client, we are focused on securing strong dividend income of $60,000 or more per year (depending on capital and market conditions):
- Ask yourself: is this something you urgently need to act on?
- Come talk to us. We are already preparing our clients for the next quantum wave in 2024 and beyond.
Regards,
John Ling
Analyst, Wealth Morning
(Past performance is not an indicator of future performance. This article is general in nature and should not be construed as any financial or investment advice. Managed Account Services are for Wholesale or Eligible investors as defined in the Financial Markets Conduct Act 2013. Please request a free consultation if you would like to discuss your eligibility.)