Archive | Investment Strategies

Indexing

The truth on three big indexing questions

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.

passive investing

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.

LIC reporting season

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.

active fixed interest

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.

bust

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.

bank hybrids

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.

Managed accounts

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.

modest retirement

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’.

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