Meet Carl and his no-fuss strategy for reliable income

When I spoke with Carl, his calm, considered and warm demeanour was exactly what I imagined when we talk about the Livewire investor - thoughtful, discerning, and unshaken by the market noise.

His investing journey began with a nudge from his father, who handed him an old unit trust brochure. Something clicked. Suddenly, there was a world beyond savings accounts and a way to grow and sustain financial security over time.

These days, Carl’s investment approach is refined but simple: he looks for yield above the bank rate and earnings that hold up. When I asked Carl what the single lesson he wished he knew when he first started investing, it would be not to get attached. Be vigilant, and if the earnings start to fall away, it’s time to move on.

Outside of markets, what Carl is attached to is wildlife, such as supporting rehabilitation for black cockatoos, sponsoring a bear, and the iconic Twinnies (who recently made a memorable appearance on TV news), who do critical work rescuing Australian sea birds.

I hope you enjoy this instalment of Meet the Investor.

Profile

• Name: Carl Bowden
• Job: Retired
• Age: 62
• Years spent investing: 29
• Biggest investment: KKR Credit Income Fund
• Secret (or not so secret) talent: I can remember loads of stuff about a lot of subjects, even if I’m not interested in the particular subject. It comes in very handy at a pub quiz.
• Guilty reading or viewing pleasure: I’m fascinated by how businesses and markets work so lately I’ve been reading lots of books about things like how private equity operates, the origins of the GFC, and the collapse of Credit Suisse. I can thoroughly recommend The Big Short by Michael Lewis.
  

How did you get started in investing and what was your first investment?

I was issued a small parcel of shares in National Mutual when it demutualised in 1996. I’d wanted to invest in shares for a while but didn’t really understand how markets worked so this was a good entry point. I did some reading to learn more and over the next few years I invested mostly through well-known IPO’s (Bankwest, CBA etc) but there was no real plan or method to my approach at that time – just to buy some shares.

How would you describe your strategy and your investment goals?

These days my strategy is geared towards earning regular income through distributions and dividends. I have a “buy and hold until something changes” approach and I only hold between 5 and 10 stocks at any time, and I keep a close eye on each stock. My overall goal is to keep earning a yield above what I could get in a risk-free savings account.

Can you share your top 5 holdings in % terms and why you hold these positions?

Currently there are only five stocks in my portfolio – that’s probably not enough for most advisers but it’s an approach that works for me.

1. KKR Credit Income Fund (ASX: KKC) - 28%
Mentioned in a Livewire article a couple of years ago and it has a very attractive yield. I keep holding it because they announce their distributions for the following year in June and have always delivered.

2. Gryphon Capital Income Trust (ASX: GCI) - 24%
Invests in RMBS and ABS and pays monthly distributions. Has a good track record for minimising risk and paying a good yield. Held because I believe Australian real estate is generally solid and the securities that GCI invest in are unlikely to collapse. I read somewhere that Australian mortgage holders will do almost anything to keep their home so that gives me confidence that we are unlikely to see a GFC style meltdown similar to the US (the Australian mortgage market also has fundamental differences to the US market).

3. IVE Group (ASX: IGL) - 21%
I hold this primarily for it’s yield but the share price been on a bit of a run lately. It has consistently paid a dividend of almost 8% since I’ve owned it and their guidance for the next few years is to maintain the same dividend. I’m happy to keep holding it unless the share price rises so much that I can’t resist selling.

4. Charter Hall Retail REIT (ASX: CQR) - 17%
Was mentioned in a Livewire story as one of the few ASX stocks that has always paid a dividend since listing. It has a yield over 6% which is why I continue to hold it.

5. Metrics Master Income Trust (ASX: MXT) - 10%
Bought in 2019 after I saw a Livewire interview with Andrew Lockhart and was impressed by his straightforward and clear explanations about the company and it’s approach. Yields can vary a bit but they always pay a return that is well above my threshold and the owners of Metrics have skin in the game which is always a good sign for me. I was also impressed when Andrew personally replied to a query I sent in via their website.

What investment is on your watchlist?

I’m not watching anything specific at the moment but if I was looking for another investment it would probably be an ETF that meets my criteria for yield and invests in a different area. I always avoid anything that’s unprofitable or too speculative.

What was your worst investment and what has been your best?

Like everyone I’ve had some losses on share sales over the years but fortunately, I haven’t had any real disasters. 

I guess my “worst” investment was more of a missed opportunity when I bought 1,000 CBA (ASX:CBA) shares in the 1996 sale at $10 a share and had to sell them a couple of years later for less than $20 a share to help pay the deposit on a house. That was a big capital gain that I missed out on if I had been able to hold on to them.

Likewise, I’ve had a couple of good investments in percentage terms if not necessarily big dollar “wins”. I bought Telstra (ASX: TLS) at $3.67 and they ground their way up to around $6.50 over a few years. I didn’t think they could go much higher so I sold them and locked in a decent profit. They haven’t got anywhere near $6.50 since.

And I bought ASX (ASX: ASX) around $42 and sold them when they got to $66. I didn’t think they would go any higher from there (they did) but I was happy to take a decent percentage profit.

Can you share a personal passion or ambition you have for the future?

I want to continue to earn enough from my investments to be able to stay retired and to keep supporting a number of animal charities that I’m passionate about (and maybe some others).

If you are interested in sharing your investing journey, please send me a confidential enquiry by clicking the contact button at the bottom of this wire or by emailing team@livewiremarkets.com.

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