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PROFILE FINANCIAL SERVICES Putting the puzzle back together…

PROFILE FINANCIAL SERVICES Putting the puzzle back together…. Disclaimer. This is General Advice The information discussed in this Presentation should not be used without receiving specific professional advice to your own personal circumstances

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PROFILE FINANCIAL SERVICES Putting the puzzle back together…

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  1. PROFILE FINANCIAL SERVICESPutting the puzzle back together…

  2. Disclaimer • This is General Advice • The information discussed in this Presentation should not be used without receiving specific professional advice to your own personal circumstances • No responsibility is taken by Profile Financial Services for people who disregard this disclaimer

  3. Looking Back Hindsight is a wonderful thing but… Market Behaviour2003 to 2007 What we said… Markets would be in for a tough and challenging period ahead… The transfer of wealth [would be] from the impatient to the patient…[Buffet] Asset allocation and portfolio insulation would drive returns in the long run… Profile Financial Services

  4. Fast Forward What happened… Housing market bubble Asset risk re-pricing Global financial deleveraging Reduced investor confidence Global growth slowdown Be fearful when others are greedy, and greedy when others are fearful… [Buffet] Profile Financial Services

  5. Context Movie Does anyone else feel a bit like this at the moment…? Profile Financial Services

  6. Re-Calibration Financial institutions… ‘The US financial system is finding the tectonic plates underneath its foundation are shifting like they have never shifted before’ Peter Kenny Profile Financial Services

  7. Financials Drawing a line in the sand… 0/5 Out of the former top five top US investment banks, zero are still operating under the existing model or even operating at all. $150 bn At 21 August 2008, the total bank write-downs stood at US $503.8 billion versus capital raisings of only US $352.5 billion [Bloomberg]. $1.4 trn The International Monetary Fund has revised its estimate for the total losses on US-originated assets to US $1.4 trillion. Profile Financial Services

  8. A Step Back Portfolio construction… ‘The advantage of actions is that they tend to increase options. Jump before you are pushed, and you can exert some control over how you fall and where you land’ Unknown Profile Financial Services

  9. Insulating Proactive portfolio construction… Industry Strategic Benchmarks Cash Fixed Interest Property Equities Alternatives • Balanced Investor • Increased Allocation to Defensive Assets • Exposure to Alternatives • Overweight Cash • Dollar Cost Averaging Strategies • Invested in what we Understood Profile Model Portfolio Profile Financial Services

  10. October 2008 Hopefully they’re not too late… AUSTR ALIANSUPER The $28 billion industry fund Australian Super has raised its allocation to cash and global bonds as it seeks shelter from volatile markets. The Australian equities allocation fell the most, with investments falling 10 per cent from approximately 38 per cent to 28 per cent. Profile Financial Services

  11. A Step Back Portfolio construction… ‘The advantage of actions is that they tend to increase options. Jump before you are pushed, and you can exert some control over how you fall and where you land’ Unknown Profile Financial Services

  12. 2008 to …. Crystal ball anyone… ‘But in all my experience, I have never been in any accident … of any sort worth speaking about. I have never seen but one vessel in distress in all my years at sea. I never saw a wreck and never have been wrecked nor was I ever in any predicament that threatened to end in disaster of any sort.’ E.J Smith, 1907Captain, RMS Titanic Profile Financial Services

  13. Strategy Adapting for a challenging environment… ‘It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. Charles Darwin Profile Financial Services

  14. Pro-Activity Implementing… ‘Opportunity is missed by most people because it is dressed in overalls and looks like work’ Thomas Edison Profile Financial Services

  15. Action The wheels are in motion… Investment Committee| Extra-ordinary full dayresearchmeetings focusing on strategy, investments and implementation. Profile Clientele| Group workshops incorporating client based insights, concerns and outlooks on the current environment. Research Houses| Private consultation with independent research consultants evaluating current asset allocation and forward strategies. Profile Financial Services

  16. Portfolio Construction Inside the engine room… • Growth/Defensive Asset Allocation • Growth Rates • Inflation • Interest Rates • Currency • Commodities • Energy • Credit Thematic Insights Economic Insights • Geographical • Sector • Industry Strategic Asset Allocation Profile Financial Services

  17. Building Blocks Insight based processes… Growth - Defensive A focus on ‘return of capital not return on capital’ Slowing Global Economic Growth High Cost of Debt and Lack of Capital Flows Re-pricing of Asset Risk Economic Insights • Agriculture • Emerging Market Economies • Mispriced Credit Spreads • Private Equity Capital Thematic Insights Emerging Markets Credit Markets Strategic Asset Allocation Increased Allocations to Niche Opportunities Reduced Allocations to Beta Risk Profile Financial Services

  18. Agriculture The theory… Economic Insights The global population is growingThere are limited resources and unlimited wants The wealth distribution in emerging economies is growingMore money demands a higher quality of living: FoodDemand drives price increases Thematic Insights Strategic Asset Allocation Soft commodity prices will increaseBusinesses involved in the primary and secondary production, distribution and sales in this industry will benefit Profile Financial Services

  19. Building Blocks Insight based processes… Growth - Defensive A focus on ‘return of capital not return on capital’ Slowing Global Economic Growth High Cost of Debt and Lack of Capital Flows Re-pricing of Asset Risk Economic Insights • Agriculture • Emerging Market Economies • Mispriced Credit Spreads • Private Equity Capital Thematic Insights Emerging Markets Credit Markets Strategic Asset Allocation Increased Allocations to Niche Opportunities Reduced Allocations to Beta Risk Profile Financial Services

  20. Interpreting Information overload… ‘The economy depends about as much on economists as the weather does on weather forecasters’ Jean-Paul Kauffmann Profile Financial Services

  21. Headlines An explanation for everything… BLOOMBERG 15 Dec 200313:01 U.S. TREASURIES RISE; HUSSEIN CAPTURE MAY NOT CURB TERRORISM 15 Dec 200313:31 U.S. TREASURIES FALL; HUSSEIN CAPTURE BOOSTS ALLURE OF RISKY ASSETS Profile Financial Services

  22. Action The wheels are in motion… We are monitoring your portfolio Profile ClienteleWorkshops We are taking pro-active steps to help further insulate your investments Investment CommitteeResearch Research HousesConsultation We are researching new opportunities We are there to work with you Profile Financial Services

  23. The Outlook Summary… ‘You cannot control the market, all you can control is how you manageyour risk’ Profile Financial Services

  24. Thank You PROFILE FINANCIAL SERVICESYour Partner in Building Wealth + Security Profile Financial Services

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