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At this stage in life, the primary objective is to derive a steady flow of passive income to replace the cash flow previously received through the workforce, ensuring you can cover everyday living costs.
Income investments focus on generating reliable cash flow to support your lifestyle, providing a steady stream of passive income for your retirement years.
To meet these needs, we believe superior risk-adjusted return outcomes can be achieved through a focus on strong cashflow-positive investments, such as:
Furthermore, our experience shows that investors tend to exhibit greater patience with positive cash flow investments during market downturns, which aids their ability to look through market cycles and maintain a long-term strategic investment approach.
We hold a strong belief that long-term investment performance is best served by investing in assets that offer high levels of transparency and control.
We focus on direct investments in property or assets instead of large pooled managed funds. This approach provides clearer insights into risk exposures and expected returns, allowing us to align your investments more accurately with your unique financial goals
Unlisted assets, like commercial properties and mortgage loans, provide unique benefits, including reduced risk, less volatility, and the potential for steady income over the long term.
For clients with a suitable long-term investment horizon, this often results in a relatively large exposure to unlisted, illiquid assets, including direct holdings in mid-size commercial properties and asset-backed mortgage loans.
Unlisted assets have historically proven to be a great long-term investment for investors, offering distinct characteristics that provide benefits to a diversified portfolio.
The valuations of unlisted assets are less correlated to other asset classes, meaning their inclusion in a portfolio can lower overall risk. Their valuations are also less impacted by changes in the business cycle, leading to less volatility in returns in the short term.
Compared to listed assets, real assets tend to be less affected by short-term market fluctuations and can generate steady income streams.
Unlisted assets have historically provided better risk-adjusted returns compared to many other asset classes, offering opportunities for greater returns relative to the risk taken.
While the benefits of investing in unlisted assets are significant, there are trade-offs, particularly concerning their illiquidity. These assets can be harder to trade or find buyers willing to transact at a given price. During distressed market environments, it may not be possible to sell unlisted assets at a fair or reasonable price.
For this reason, Sterling Financial places limits on the amount of illiquid assets included in your portfolio to effectively manage these liquidity risks.
Rather than picking an investment product ‘off the shelf’ and essentially outsourcing our responsibilities as investment managers to a third party, we engage directly in the investment selection process to the greatest extent possible.
One of the primary requirements when selecting an external fund manager is to engage with smaller groups with whom we can communicate directly. This allows Sterling Financial the opportunity to be appointed to the Investment and Compliance Committees, as well as the possibility to extend our influence through an ownership stake in the management entity of the selected investment fund.
View your portfolio/superfund using the following link:
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