Managed Funds Navra Aus Retail - Performance

I used to read that group until the slanging matches forced me to stop. There seemed to be some useful contributors but a few noisy woodchucks who tended to drown out a useful message with garbage. And I remember there was this one poster who clearly was delusional... but it's been a long time and I think I have blocked out the details

That thread is from 2005 but Travis is just spot on in my opinion, I'm largely in agreement with his whole investing philosophy though so am potentially a biased source.

 

Thanks for posting, very much appreciated. Yes, I am a newbie and need all the help I can get.

OK, seems like I am not on the right track, my strategy is high risk.

So what would you do?? I NEED INCOME. I am high negatively geared and a shortfall of $50K pa.


Cheers, AL

 

Hi Sim
thanks for your help, I think I do need to elaborate on what I am trying to achieve.

Firstly, went to Navra Seminar in Perth a couple of weeks ago.
Steve Navra stated that he uses property for growth and Navra fund purely for income to assist in servicing debt, ie IPs, shares etc.

I have invested soley in property, and as mentioned currently have a shortfall of around $50K pa.

I have tried to manage the risk by setting up a LOC to assist with the shortfall and currently this will cover at least 4-5 years which is capitalised.
I am presently 50% LVR/ - $5M property ($2.5M debt).

I am comfortable using this strategy, however as I am planning to continue investing in property as well as diversify into shares/MF I would now like to use Navra Fund to help service ongoing investments.

You mentioned that you use cashflow Navra generates to help offset investments, using ML capitalising interest. This is exactly what I am trying to achieve. When you state high risk, what do you mean and how are you managing your scenario??

One way I could possibly reduce the risk is not capitalising the ML.
If I were to go $100K ($50K LOC/$50K ML) @ 15% (Navra) $15,000 -
($4750 interest @ 9.5% ML), which leaves me an income of $10,250 if it continues at 15%.

Hope this all makes some sense, as I am still trying to get my head around all this.

Cheers and appreciate ongoing support/help.

AL

 

Hi Always,
You have so much spare LVR you don't need to use a ML for your initial purchase. By using a LOC only you gain a small margin of safety from the lower interest rate of the LOC and no margin calls to give you a psychological hit. You can always margin up later when you feel a little more certain of yourself in this new field. Don't capitalise interest unless you have PPOR loan you need to pay off first, then make sure its used for that purpose rather than your next holiday. Use the distributions to reduce the LOC used for NAVRA next as gaining a bit of equity in your first foray into MF will help to ensure you continue making profits in future. Failure to do so might tempt you invalidate the whole plan based on your first disappointment, and then your eyes would be closed to a very important methodology for progressing your investing career.

50%LOC 50%ML might have sounded really cool when you first heard about it, but its a methodology that may not have come at the right time for you and your circumstances. Look at it again later when your serviceability has improved, and you have a wider margin for error available to you.

 

Hi Venger
Thanks for the great response, you have highlighted some great points.

Finally, I think I am starting to get this.

Cheers and all the best.

AL

 

Mate just a few thoughts, do with them what you will:
1) you seem to be doing really well out of property, with plenty of equity available. If I was a really good Australian basketballer trying to make money, I wouldnt go and take up tennis I would take my same area of expertise into other areas (perhaps the US) and see if I couldnt make some more there. All I am saying is that if you have a machine that has been working really well for you, why tinker with it? Maybe you can find a way just to stick with property (and use LOC to fund your shortfalls perhaps?), and maybe branch out into other areas of property.
2) Just from your posts, you seem to have gone to a seminar, got excited and come up with a plan that you were happy with, then heard a few arguments against it and changed your mind again. There are plenty of experts with opinions but at the end of the day if you arent working your own plan, the plan just wont work. Take some time and really come up with a strategy you are comfortable with, then go ahead with it and fine tune along the way. Make sure that your plan is the product of your own conclusion, not something you read on a forum by someone you didnt know, or by a seminar salesman (and they all are selling something, even the ones that say "dont worry I am not trying to sell you something"!!)

 

Sim, probably a very basic question with an obvious answer. But how does having equity growth help with maintaining your margin loan. Presumably this would mean extracting the equity growth via a LOC to put into the margin account?. So a slightly better interest rate, is there something else that I haven't grasped? Or are you simply referring to any equity growth in the MF portfolio,
Thanks

 

Hi Coopranos
thanks for taking the time to reply.

The reason for diversifying from property is basically due to the returns/yields, which are very poor, especially in WA. When purchasing property stamp duty and other associated fees can also be very expensive exercise.

I am currently chasing the property cycle and have started investing East but once again you need deep pockets with this strategy.

This is where I am hoping I can balance this approach with shares/MF etc.

I do plan to continue researching and using this forum to get some great tips is one avenue, I also am reading various magazines etc. and hopefully this will help me pick up my game.



Cheers, AL

 

The Navra funds quarterly distribution for period ending December 2007.

Navra Blue Chip Australian Share Retail Fund 3.4 cents per units
Navra Blue Chip Australian Share Wholesale Fund 3.4 cents per units
Navra Blue Chip American Share Wholesale Fund 1.0 cents per units

 

Thanks Tropo.

Qrtly Results good enough for me !