Bonds have performed well for most of the last 30 years with a tailwind of easing liquidity, but the current high prices makes them vulnerable to losing their protective qualities.
An efficient diversified portfolio might include unfamiliar assets with short-term volatility. It’s important to focus on a comfort level to attain the long-term benefits of diversification in a portfolio.
The Royal Commission focusses heavily on poor incentives amid a sea of damnation and exhaustively-documented case studies, but does not provide answers, especially on the vexed issue of best interests.
APRA’s letter to super funds highlights concerns about ‘cash’ investments. A lack of understanding might haunt investors when the next downturn comes as too many people forsake protection for yield.
Value and contrarian investors often buy shares in companies rejected by the market, which makes it the hardest way to invest. It looks great when it works but idiotic when the market continues to disagree.
Before the GFC, many experienced market professionals forgot about risks such as liquidity, and did not do the research needed to minimise the problems. It will all happen again.
Investment solutions that were once only available to the big end of town are now available to anyone willing to learn the same lessons, research the available products and try some new approaches.
Fund managers are commonly using algorithms to derive and implement their investment strategies, and investors should be looking behind and beyond the computer code to understand the inputs.
High debt, wealth inequality, increasing automation, ageing population, and climate change are among the most significant structural headwinds the global economy faces today. What could this mean for equity investors?
Devices connected to the internet, not just phones and laptops, are increasingly part of everyday life. Soon, it will be our lights and doorbells, and later, almost everything, with more risk of hacking.
It’s much easier to measure returns than the risk involved in generating those returns. Yet, it’s crucial to understand risk because in certain markets, higher returns may simply be coming from taking more risk.
ETFs have grown rapidly in popularity and diversity, but like managed funds, not all products will survive for the long term and there are consequences if a small-scale ETF is closed by its issuer.
The tightening of credit conditions for home lending driven by the Royal Commission has not fully translated into aggregate statistics, and the slowdown may already be worse than we realise.
Investments that offer some element of tax effectiveness or tax breaks can be good, but it’s unwise to make investment decisions, both buying or selling, based solely on beneficial tax treatment.