Many ‘baby boomer’ retirees contemplating decades of retirement prefer a sustainable lifestyle based on a steady income that keeps up with inflation. New perceptions of risk are required to meet such income demands.
Tag Archives | volatility
Dividend streams tend to be stable and determined by fundamental factors. Unlike capital valuations, which are affected by estimates of prospective returns which are, in turn, strongly affected by market sentiment.
Everyone’s calling for the end of the long bull-run in equities. But we don’t know if the end is a few months or a few years away, and technological change is so vast that historical lessons need to be tempered.
Higher volatility, higher funding costs, US rate rises with AUD interest rates decoupling, Quantitative Tightening, maturing bond reinvestment flows all point to a difficult 2018.
Global stock markets could face the most volatile period since 2008-09. The danger is that US fiscal stimulus could fan inflation and lead to higher-than-expected interest rates. Risks are asymmetric to the downside.
The collapse of the Exchange Traded Note (ETN) linked to the value of the VIX was a warning to traders not to be complacent about volatility, and the entire market felt the impact.
Volatility continues to hit record lows despite political upheaval and the start of interest rate normalisation. But, as inflation continues to take root, can active strategies help investors protect their portfolios from downside risk?
Contrary to popular understanding, markets have been below normal volatility levels in the last year, but it might be time to prepare portfolios for greater volatility and a potential downturn in 2018.
We are seeing rapid one-day movements in some large stocks of 10% to 20%, especially those that were ‘priced for perfection’. What is causing this, and does it present a threat or an opportunity in a portfolio?
Meeting real return objectives in a low growth environment is a challenge. Investors will need to use cyclical volatility to their advantage by riding the upside and, importantly, avoiding the falls.
There are many ways to hedge against volatility, but often at a cost to the overall return of the portfolio. At what point is a smooth journey worth the impact on the destination?
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.
Talk of the current market being volatile is overstated. Markets have been relatively calm for the last four years, and what we are seeing now should be considered normal.
High yielding stocks are often seen as the silver bullet for retirement plans. But in many circumstances the focus on income overlooks the need to consider return and risk in any investment decision.
The Big 4 banks make up nearly 30% of the ASX, and Australian shares make up a significant proportion of most multi-asset portfolios. Even if you can’t resist the bank dividends, you should review your level of exposure.
A simple strategy of backing prior winners and shorting prior losers has outperformed again in 2015, supporting arguments for ‘momentum’ investing. It’s an example of a factor that can be used across a portfolio.