Look Beyond The Yield

Long-term growth is the secret to making the best buying decisions

- Peter Esho

Over the years, many people have asked me about buying property. “Should I buy one expensive property or two or less expensive properties?” It’s a difficult question that requires quite a lot of analysis to make the right decision. But I can help provide the steps of analysis an investor should take when considering what to do.

I spent almost seven years as a stock analyst, early in my career, at the Chicago-based research firm Morningstar, working out of its Sydney office and covering a range of stock market-listed companies. It was a humbling experience and one that, in hindsight, was the best training ground for building an investment framework, which I have used in my career ever since.

A stock analyst studies different companies throughout the day and writes up their research to help people decide where to invest. These are typically large companies listed on the stock market. This means we have the ability to look through their public accounts and periodic filings to find patterns and trends.

This is a great place for any investor to start. If you’re not into stocks, pick a couple of companies you engage with as a customer – for example, if you buy groceries from Woolworths, it’s a good habit every now and then to gloss over its financials and see what’s happening in its business.

After studying hundreds of companies, reading thousands of investment reports, and speaking to some of Australia’s most well-regarded chief executives, I learnt two very important lessons over those seven years:

1. How to think about investment returns; and