Buy and hold ? Not this banker

Swiss banker Wilfried Kofmehl, 43, has spent his entire working life in private banking - and he loves it.

'It's very difficult to be in this business. Clients expect you to be on top of financial news 24/7. But it's a wonderful job,' said Julius Baer's head of private banking in South-east Asia.

When it comes to his personal financial plans, he points to his four key 'pillars', which include compulsory and voluntary savings schemes administered by the Swiss government. In addition, he has investments in properties and other financial instruments such as stocks, unit trusts and bonds.

Instead of relying on a passive buy-and-hold investment strategy, he has become more proactive in his investing approach in the past few years.

Said Mr Kofmehl: 'I was following the old rule for 15 years, that is, keeping one-third in cash, one-

third in financial assets kept in a balanced portfolio and one-third in real estate. But markets are now so unpredictable and life cycles of economies are getting shorter.'

As a result, he makes drastic shifts from one asset class to another whenever he sees opportunities. Currently, he is holding more cash than usual, and fishing for undervalued equities and bonds.

It helps that he is in the business of managing money for high net-worth clients. Bank Julius Baer is part of the Julius Baer Group, a leading Swiss wealth management firm that targets private banking clients with three to five million Swiss francs (S$4.1 million to S$6.8 million) in investible assets.

Q:Are you a spender or a saver?
I'm mixed. I used to be more of a spender. I started to save more money after I turned 30.
As a private banker, I have developed the discipline to think in terms of medium- and long-term horizons. My current focus is on trying to achieve high returns from my investments so that I can spend more.

Q: What financial planning have you done for yourself?
For Swiss nationals, the key pillars are government-mandated investments, employee and employer contributions, life insurance for themselves and their families, and savings plans.
On top of these, I have real estate in Canada and Europe, and other financial instruments. Given current market conditions, I am active but cautious in equities and selective in emerging market bonds. Recently, I bought into a five-year Philippine bank bond that has a yield to maturity of 16 per cent.
I also have some theme-based investments in areas such as infrastructure and agriculture. Last but not least, I make some direct venture-capital investments.

Q: What's your investment philosophy?
I believe in absolute returns, not relative ones. For me, negative performance is not acceptable.
I'm happy with returns of 15 per cent to 20 per cent a year. Because of the earlier rebound in equity markets, I've achieved annual returns of 20-30 per cent over the past three years.

Q: Any other investments?
I invest in property. I have an apartment in Switzerland which was bought in 1989 for less than one million Swiss francs. Property values have risen steadily there but at a single-digit growth rate.
My wife inherited a cottage in Montreal that's more than a century old. Both properties are currently used by the family.
I don't collect wine but love drinking it. Recently, I came across a potential investment in different vineyards in 'old Europe' in, for instance, France and Italy.
The investment sum is set at US$250,000 (S$339,650) with projected annual returns of 40 per cent. I'm considering it.

Q: Moneywise, what were your growing-up years like?
I come from a regular European family. My parents loved to travel. I wasn't born with a silver spoon.
My dad was also in banking but later took up a government city-planning job. Mum was the best homemaker I ever knew. I was the only child, so I was very pampered.
Dad, who was more of a spender, didn't believe in saving money and spent whatever he had on weekend skiing trips and hobbies involving the family.

Q: What has been a bad investment?
During the 1987 big market crash, I invested 30,000 Swiss francs in Japanese equity warrants and lost all of it. I learnt then the importance of diversification.

Q: Your best investment to date?
My wife. Also, in the past few years, the equities market has had some fantastic runs.
Some of my investments have doubled in value. These include some of the smaller Singapore and Hong Kong stocks.
I also made some good long-term investments in hedge funds.

Q: And your home now is... ?
I live in a two-storey, four-bedroom house with a swimming pool. It's in the Tanglin area.