Travis Miller says diversifying your investments and turning to alternative assets can help safeguard your nest egg and grow wealth faster.
Travis is an author and one of Australia’s leading alternative asset managers, as well as being the co-founder and CEO of iPartners, a leading Australian alternative asset marketplace with approximately $5B in funds under management.
On Property Hub’s Get Invested podcast, hosted by Bushy Martin, Travis delved into the key steps to diversifying your investments.
Taking a broader approach to investing
Travis said investors should consider diversifying their assets for greater wealth creation.
“If I had to do it again, I’d take more of a broader approach. So I’ve been through periods in my investment journey where it’s nearly 100% property or 100% equity. But now, I’d take more of an asset allocation approach and just be more diversified,” Travis said.
“I see the market as public assets and private assets. If I could access private assets easily or in the earlier days, I think it would have had a higher allocation. So I think I’ve been very concentrated at certain times, particularly the early days in my investing. So that’s probably the main thing I’d tweak.”
Although, Bushy explained the importance of not stretching yourself too thin.
“If you’re diversified too early and you’ve got too little in too many buckets, then it’s difficult to achieve any great growth in the asset base. And at the same time, your broad knowledge isn’t there. So it’s I think it’s fairly understandable why a lot of investors, when they start off, start in one area, build their knowledge and then expand outside,” he said.
Ensuring you have the education to invest diversely
Having broad knowledge of different investment pathways and the risks involved is essential.
“The biggest gap to investing in alternative assets is education. A lot of people don’t know what’s out there, they don’t know where to look for it, and if they find it, they don’t really know how to invest in it or access it,” Travis said.
“A big mistake investors also make is not reading documentation in enough detail. I think a lot of investors see a big return or a big coupon or a pretty little marketing tool. And so I think where investors get in trouble is through well-marketed products that aren’t necessarily good products, but they’re distributed by very talented marketers.
“So be careful with pretty marketing documents. Personally, I much prefer an ugly marketing document that’s clear and easy to understand and has all the risks upfront.”
Understanding the difference between traditional and alternative assets
To help kick start the diversification, Travis explained the difference between traditional and alternative assets.
“So when I think about traditional assets, I think about traditional-listed equities, Australia and offshore, I think about traditional fixed income (just think bondsm Australian or offshore), and also manage funds in those asset classes, and then also cash in deposits. To me, that’s what I’d call public markets, traditional assets,” he said.
“Then, everything else in the private markets I’d call the alternative assets. And that can range from investing in property debt or equity, lending money to a private company or putting equity in a private company, things like collectables, investing in agriculture – all sorts of stuff that happens in the real world that is not commoditised.”
No matter what asset you invest in, Travis believes that patience is always required.
“I think the good investors are patient. So if you got a dollar in your pocket, you don’t have to spend it today. Just sit there and have a look around and find where you should put that dollar and when the right time is to deploy it,” he said.
“You have people that just rush into the next get-rich-quick scheme because they have a group thing going on or someone else is involved. You think you’re about to miss it, you have FOMO. But it’s like if you get to an auction but you miss the house. There’s always another one round the corner or down the road or up the hill.
“So just be patient, and also think about your personal circumstances and where you are on your own wealth journey. And just make sure you invest for that time horizon.”
Listen to the full interview here.