David French | 18/02/2009 3:24:44 PM

This article was originally published in The Morning Bulletin on 19th July 2001

Successfully running an investment portfolio from Central Queensland requires specialist skills.

I grew up in Rockhampton, in Central Queensland. At the time I knew it wasn’t the centre of the world, but it certainly was paradise. Some readers will remember jumping off trees into deep holes in Moores’ Creek and the excitement of big floods at Reaney’s crossing. The creeks were full of perch and “crawchies”. Others whose names we will not divulge will remember their first pash playing “spin the bottle” or stealing a quick smoke at First Turkey (the “rough” kids still go there!!). Then there was our teacher Mr Cornwall, with his vast selection of canes in the waiting - I experienced a few, unfairly of course.

In my early twenties I moved away from the area. My experiences took me right to the big end of town, where I became quite successful as an investment analyst (and also as an investor). Contrasting this with my experiences of growing up in Rockhampton, the gulf between the flow of financial information up here and down there was obvious. Whereas in Sydney or Melbourne, commentary by chief executives and senior politicians are standard fare for the press, up here it is more the exception than the norm. People outside of Sydney and Melbourne just don’t get the same exposure to financial matters.

Think about it. Do you know that The Rock is the only publicly listed company with their head office north of Brisbane? This makes for a major difference in the way information flows to town. A town with 100 head offices is just going to have a better flow of information. This helps to make investors more aware of financial and economic issues, just as a matter of course (still, they don’t have paradise, which is why I came back!).

These differences in everyday life are critical to people who live away from capital cities and who want to invest successfully. The better stockbrokers and financial planners in the region will have systems in place so that they are at least as well informed as their counterparts down south. That’s not to say that they necessarily have to belong to a big group, but true financial professionals need to be able to personally understand the issues impacting on their clients and the characteristics of the investments they recommend.

Let’s look at an example. Let’s assume that the oil price is weakening. Does your advisor know why? What impact does this have on your portfolio? Are you invested in a fund with an overweight position in oil stocks? What is the fund’s stance on this? Is it important in the context of your overall portfolio? This is a lot different from simply parroting a recommendation that has drifted down from head office – it requires an intimate understanding of investment markets, and the courage to change tack when things are moving against you.

Your success in investment markets ultimately depends on the quality of the information that you receive and how you act on it. You have to go the extra mile to get quality information when you live away from Sydney or Melbourne – otherwise you might be left behind. Ask plenty of questions to help make sure your advisor is firstly technically equipped to fill this void and, secondly, is competent in applying that knowledge.

The Investment Collective (AFSL 471728) is a non-aligned financial planning and investment firm specialising in providing tailored financial and investment advice for individuals and small business. Capricorn Investment Partners Limited's services include financial planning, share trading, portfolio management, insurance broking and self managed super fund administration. Additional information on services provided by The Investment Collective Limited can be found by following this link. Readers are reminded that this document has been prepared for general information purposes only, and any advice contained herein has been prepared without taking into account your financial objectives, situation or needs. Readers are advised to see their financial advisor prior to acting on any general advice.

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