Case Study: An example of a perpetual portfolio in retirement

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In this case study episode, Stuart Wemyss discusses a client’s journey to establishing a successful retirement strategy using a perpetual portfolio. The client, who began retirement with a Self-Managed Super Fund (SMSF) balance of just under $2 million, faced significant losses from a poor stock pick. However, over seven years, the portfolio has grown despite drawing substantial pension payments. Stuart highlights key strategies employed to achieve this growth, such as selling underperforming active funds, including Magellan and Walter Scott, and shifting to a more income-focused equity strategy using ETFs and corporate bonds.

The client’s real estate assets have also appreciated, with equity in their property doubling. Stuart emphasizes the importance of diversification, noting that despite some asset classes like banks and bonds underperforming, diversification across sectors smooth returns over the long run. He also stresses the importance of balancing income and capital growth in a retirement portfolio, ensuring all assets contribute. The episode concludes with a discussion on the challenges of active management and the benefits of long-term, diversified strategies for a successful retirement.

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