Tuesday 19 August 2014 by FIIG Research Legacy

Investor profile

Gary and Gayle Wilson

Gary Wilson, 68, and his wife Gayle, 60, never stop investing. When they made a tree change six years ago from Toowoomba, where they part-owned a successful pharmacy, to the Scenic Rim region near Lamington National Park in Queensland they didn’t just buy a home. They bought the popular Cave Rock Cottages holiday escape which gave them a new business to manage.

The retreat is the latest of many investments over the years, from residential property on the Gold Coast, to a disastrous stake in an asbestos mine.

Below, Gary tells us about his investment strategy, his best and worst investments and why he now has 90% of his portfolio in bonds.

What was your first investment and how did it go?

It was a block of land on a canal at Biggera Waters. I bought it for $7000 in 1979 and my father sold it while I was overseas for double that. I doubled my money in about four years which in those days in the Gold Coast wasn’t all that hard to do.

What is the best piece of investment advice you have received and who was it from?

It was indirectly from my father. He always borrowed money to buy investments, mainly in property but later in shares. It was forced savings. He always had something he bought to pay off so he never had money in the bank. He believed that the best way of investment was to always have something you were paying off.

What has been your best performing investment?

Prior to the GFC it was shares. But the GFC was a rude awakening. I finished after the crisis ahead of where I was 3-4 years before but it was just a hell of a roller coaster ride. At my age I can do without the stress. I find bonds don’t have the big highs and lows just tiny highs and lows so I can sleep at night. Since then my best investment has been Swiss RE bonds. I’ve done really well with them.

And the worst?

Shares in a company called Woodsreef, which I bought when I went overseas on a working holiday in 1970. The idea was they were going to pay for my trip to Europe and back. They had a huge asbestos mine in the NSW Northern Tablelands which was their only source of income. Anyway, they went belly up with the asbestos blow up so I did the lot. I’ve had lots that didn’t do well but that was the most significant loss.

What proportion of your portfolio is in fixed-income?

About 90%. That’s not what they recommend but I haven’t been happy with the value in other investments. If there was a general share market collapse and the share market went back to half what it is, I’d probably put some of that money into shares, but at the moment with the way world seems to be I’m much more content having my money in bonds.

Do you pursue a particular strategy?

I go to a large extent with what’s recommended but I make sure to allocate about 50% of my portfolio to inflation-linked bonds. They don’t show as high a return as other forms like fixed or floating bonds but I can remember when inflation was 17% and rates were about the same. If inflation started moving tomorrow it wouldn’t worry me at all. The returns I get are about 6% overall and I’m quite happy with that. It’s boring but it’s no worries. I don’t actively trade a lot. There would only be about 25% of the portfolio that I would look at actively trading.

What are you hoping to achieve personally through investing?

Security is a big thing with me. I’m a first born and a baby boomer so security is Number One. That’s why I’m almost totally invested in bonds. My goals are to have the backing for us to deal with whatever might happen to us health wise and to help out my kids and our siblings from time to time if need arises.

We’re not extravagant at all. We rarely go out to dinner although we probably would if it was more convenient. We have a very simple life.

Where do you get your information about investing?

From FIIG seminars and webinars and my FIIG broker Jake Koundakjian. I also read as many articles as I can find and listen to anything I can find.

How did you start investing through FIIG?

I was a subscriber to the Eureka Report and Elizabeth Moran used to have an article there every week. I used to follow her and I made contact and went to a seminar to start with.

How would you invest $100,000 if you were given it tomorrow?

Probably in bonds like the rest of my portfolio. I’d talk to Jake about it. At the moment everything is reasonably fully priced, I feel. The share market, the property market, and the bond market are all fairly fully priced. So I wouldn’t rush. I’d be happy to put it aside but if anything came up it would be in bonds.

Do you have a personal finance budget and do you stick to it?

No, we have a broad budget. We have a business account and a personal account and we keep an eye on them. We both know what we can afford. We don’t have a lot of access to means of spending unwisely. That might change if we get back into the big smoke which I don’t see happening. We don’t get much opportunity here to do too much damage.

What is the most extravagant purchase you have made?

An Alfa Romeo Alfetta. Fabulous car but they didn’t do the transition from left hand drive to right hand drive very well so all the pedals were offset. If you put your foot down where the brake should be it was the accelerator!