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.
Tag Archives | GFC
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.
This brief history of the GFC and the lessons we should learn is a reminder that similar events will happen again at some stage, and this time we have no excuse not to be ready.
The National Seniors Australia (NSA) survey reveals that retirees want access to regular and stable income, even at the expense of lower returns. The need to preserve capital reduces tolerance of losses.
It’s too easy to look at a long-term chart of rising share prices and be reassured about performance. But adjusted for inflation, many of our largest companies have gone nowhere in half a century.
The fundamentals point toward bankruptcies of major sovereigns like the US and Japan in the next decade. The after effects could be catastrophic on all major asset classes. It’s time to discuss the makeup and costs of insurance.
The 2008 GFC actually started a year earlier in the global credit markets, but the equity markets ignored the warning signs. With hindsight, everyone had the chance to exit shares at elevated prices.
Following the Ripoll Inquiry in November 2009, the Labor Government formulated the Future of Financial Advice proposals. A lot has happened since, and the Royal Commission is dealing with the consequences.
The intuition is that stock markets should perform in line with an economy’s GDP, but a look at the last decade shows little relationship, and perhaps the opposite is more accurate.
There is always market uncertainty, but the economic outlook is broadly set and investors should focus more on companies delivering solid returns over the next few years almost regardless of market conditions.
The current level of fear in the market could be signalling a downturn or even another GFC. Investors should remember the lessons from the last crisis, and be in a position to take advantage of the next one.
The problem with successful long-term investing is the constant availability of financial data, media commentary, and the ease with which a portfolio can be traded. That’s where a change in perception can help.
When stockmarkets fall, investors have the opportunity to ‘grab a bargain’, but the panic and negative media coverage that often accompanies a downturn makes it difficult to go against the crowd.
Mortgage funds still suffer from the poor reputation earned during the GFC, and are not well supported by investors. When the asset is a first registered mortgage over real property, some structures are worth a look.
A credit-fuelled property bubble enabled China to maintain its incredible run of growth through the GFC. But now it has to deal with the implications of a massive excess supply of property, as millions of homes lie vacant.
According to CFSGAM’s research, Australian Gen-X women remain most at risk of not meeting their retirement objectives, in part due to an aversion to growth assets since the GFC, despite the market’s recovery.