Indexing has come under increasing criticism as it has grown rapidly. Three issues dominate the arguments but the indexing benefits of low cost and diversification means active and index funds have a symbiotic relationship.
Archive | Investment Strategies
The paradox of passive investing
The rapid rise in investments into passive vehicles is having a distortive effect on markets as the flows are prone to sudden reversals. The cheap cost may come with a paradoxical result.
Investment innovation beyond the status quo
Large super funds have been successful in delivering strong investment returns, but the changing nature of the sector means more investment innovation is necessary for continuing long-term success.
LIC reporting season wrap for 2017
LICs have generally retained their dividends despite some softness in income received from underlying investments, and three prominent, longstanding LICs are worth a look at current prices.
Why the times suit active fixed interest
With the 35-year bull market in bonds coming to an end, passive fixed interest portfolios are at the mercy of the index’s high levels of interest rate risk and compositional skew towards low return investments.
Six ways to improve your term deposit outcome
Leaving a term deposit to rollover automatically at the end of each term will almost certainly guarantee a worse return than if you read the rollover letter and do some research instead.
US will fall more than Australia in next bust
Amazingly, Australian and US stock markets have delivered the same returns for their home country investors over the very long term. With the recent US strength, it’s more likely to fall further in the next bust.
Understanding the extra return from hybrids
Hybrids are complex instruments but they can be viewed as a bond with an embedded option, and they convert to equity in certain circumstances. Investors should consider the risk of this happening.
Watch out for the buy/sell spread on funds
Investors should know the buy/sell spreads in their funds. The purpose of the spread is to pay for the transaction costs when investors buy or sell to ensure equitable outcomes for those that remain.
Investors face new choices in listed vehicles
Listed Investment Trusts are a rival structure to the long-established Listed Investment Companies, but what should investors know about the differences?
Managed accounts enter the mainstream
Managed accounts are becoming more mainstream. They allow investment transparency, better performance analysis and improved tax optimisation versus some other structures.
Spicing up two main investment principles
Telling investment stories in the form of a fable or parable is a great way to overcome the reluctance of many inexperienced investors to think about saving.
The indignity of a modest retirement
It’s no surprise that increasing living costs (food, energy, health care) are impacting retirees on modest incomes the most. Early planning and saving is needed to be ‘retirement-ready’.
Big data reveals how retirees really live
Analysis of the retirement expectations and spending habits of over 300,000 retirees is a valuable tool to make plans more specific, including both super and non-super wealth sources.
