Meet the team: Paul and Filip
Meet Paul and Filip who manage the Equity Portfolios at MW Lomax. With over a combined 35 years of investing experience they both agree on the active methodology to utilise the sharemarket and minimise the risks.
How does your investment style differ to other fund managers?
The only factual data out there is price itself so our strategy focuses mainly on price movements allowing us to identify the sentiment of the market at any given time to identify good risk/reward opportunities. In professional terms we adopt a highly focused and high conviction strategy in rising markets and protecting capital in falling markets. Below is an outline of our investment strategy:
‘High conviction means that we can be either fully invested or 100% in cash at any time if either strategy is our highest conviction. A highly focused strategy involves holding a comparatively small portfolio of up to 12 stocks at any one time that allows for the appropriate level of active management that provides the ability to be high conviction. Being highly focused, which is contrary to most mainstream investment managers, also allows us to be adaptive to changing market conditions thereby applying active management more effectively.’
Most fund managers apply the concept of value investing, often accumulating a stock believed to be of good value without specific regard for market or stock direction (often called dollar cost averaging). The problem with this strategy is that during bear markets, accumulating a share which is falling in price may have severe consequences to a portfolio as the general consensus is for price to fall, as opposed to the intent of investing – which is for price to rise. Furthermore, it is very difficult to apply a high conviction strategy to the traditional long-term or managed fund portfolio that holds in excess of 20-30 positions due to the time and liquidity problems
How do you pick the right investments?
The study of price will provide us with insight into ‘when’ we should be buying or selling, whilst our study of the Macro/Micro economic environment along with quantitative data will provide insight into ‘what’ to buy.
How do you know when the market is going to fall?
Although it sounds repetitive, it is again mainly the study of price which will indicate that a market is likely to fall.
How do you avoid making a loss when the market falls?
We have a plan in place each time we enter the market. A plan for when we are to buy, and also a plan for when we are to sell, including a get out plan should the stock not unfold as anticipated. For example, let’s say we buy into a stock with the belief that it is going to go up but soon after we buy it begins to fall below our buy price. At this stage we are left with two options. Hold and hope or sell out with at times a small loss. We for one are not in the business of hoping and praying, especially when it is the financial welfare of clients, therefore our strategy of selling out early if a stock goes against us, and not allowing that small loss to grow into a big loss is one of the main reason we have been able to outperform the market.
What’s the long term future of the share markets?
It’s funny to see how many times we are asked this question and we are constantly intrigued at the human psyche in relation to this topic. There is a very big difference between trying to predict where the market may be in 5 years’ time and actually making money from it. We are focused on the latter and given the highly volatile nature of world markets, we believe that the best strategy to approach these times is to incorporate an active investment strategy focused on achieving returns for clients, whilst having capital protection at the forefront in the event of prolonged downturns.
Why do you believe MW Lomax is the best place for people to come for wealth management?
To put it simply, we are offering people the opportunity to have exposure to the share market, which by the way is the greatest investment vehicle of all asset classes, proven throughout history, whilst also providing the peace of mind that in the event of any sustained market downturns, perhaps like the GFC, clients can sleep easy at night knowing their money is not exposed to potential heavy losses, which are commonly associated with these events.
How do you look after your clients?
We provide monthly newsletters providing insight into portfolio performance and outlook along with performance updates every 3 months.
Paul has over 25 years of experience in property and stock market investing, and 8 years as an equities portfolio manager. He achieved a Bachelor of Business at RMIT in 1995 and specializes in equities. Paul established an equities division at Vantage Advisory in 2007, which now operates an MDA at MW Planning that provides active portfolio management. Paul has consistently outperformed the Australian market since 2006 and has produced positive returns every year since 2006 with an average gross return of 12.76% pa to the end of June 2016.
Filip has over 10 years of experience in stock market investing. He achieved a Bachelor of Business at Victoria University in 2006 along with completing a Diploma and Advanced Diploma in share trading and investment with Distinction in 2009 at the Wealth Within Institute. Prior to joining MW Lomax, Filip has had experience in trading derivatives, stocks, commodities and forex along with mentoring individuals in becoming full time traders in his role at the Wealth Within Institute.