This is a simple guide on how to follow Rivkin advice.
Rivkin offers a range of investment strategies to suit different investor needs. This allows members to choose one or more strategies to follow such that the overall portfolio suits their requirements. To give members maximum flexibility, we have designed our advice such that members can choose which broker platform they wish to use. While we have partnered with two brokers (CMC Markets and Saxo Bank) to provide two low cost options for members, they are under no obligation to use either of these brokers. Regardless of which broker the member chooses, the process for opening an account and following our advice is much the same.
Open a Stock Broking Account
Using a CMC Markets account as an example, this is the broad process for opening an account and following Rivkin’s advice. Firstly, a brokerage account application needs to be made, which typically takes between 2 and 4 days to process. Once your application has been approved you will be provided a trading account with an attached cash account. The cash account holds a BSB and account number (just like a normal bank account), which you can transfer capital to and use it to buy stocks. When a stock is purchased or sold, the proceeds will be drawn from or transferred into the attached cash account; this process is automatic and doesn’t require action from the trader.
Chose your strategy and establish your portfolio
Once you become a member, and open and fund your brokerage account, the next step is to start trading. Once you have chosen a strategy to follow, you simply need to buy all the stocks recommended by that strategy in equal weighting. In other words, if you are investing $50,000 and the strategy has 10 stocks, you would invest $5,000 per strategy. You then simply hold these stocks until the next rebalance date.
We recommend subscribing to e-mail alerts for any strategies that you follow. This way, on the rebalance date, you will be sent a notification (e-mail) specifying that a change may be required to the portfolio. If a change is required, simply review the updated portfolio, sell any stocks that have been removed and buy the new stocks that replaced it. To make it as simple as possible to follow, each portfolio adjusts once a month on particular dates which are listed below:
- ASX Blue Chip: 1st
- US Growth: 1st
- US Long Short Strategy: 1st
- ASX Growth: 15th
- ASX Event, ASX Income, and FX strategies are executed on an ad hoc basis
This structure is designed such that the investor is entirely responsible for executing recommended changes when they occur. For some members, there is evidence to suggest they don’t always follow the advice as given. For example, a common occurrence is that investors might miss a rebalance, for one reason or another, leaving them with an ‘old’ portfolio that holds stocks no longer held within the recommended portfolio.
A key problem with this scenario is it could result in a substantial difference between Rivkin’s results and that of the individual. The strategies provided, that have shown to be successful and have undergone significant back testing, are developed using a portfolio approach. When an individual makes personal adjustments or deviates from the intended strategies, it more accurately resembles stock picking than a systematic investment system and can result in diminished returns.
Rivkin Push Trade
So, to help members out who want to follow the strategy to the T but are finding it hard to do so we have another option for you. Our ‘Push Trade’ system allows you to register for a certain strategy, link your brokerage account, and provide us with information of how much money you want to trade the strategy with. Then, on the rebalance date, you will receive a text message asking you to confirm the necessary trades to be placed. Upon clicking this confirmation, the trades will automatically be placed for you. This system is perfect for people who still want to be hands on but don’t have the time to place trades.
However, if the idea of monitoring and updating the portfolio is something you are not particularly interested in doing, rest assured, the process of setting up a Separately Managed Account (SMA), where the investment process is taken care of for you, is a simple one.
To learn more about the platforms used by Rivkin and how the account management services work, please feel free to contact us on 1300 748 546.
