Can you pick the best performing asset class over the next 12 months? Follow the link below to see the best to worst performing asset classes over the past 30 years and see if you can pick the best performer for the next 12 months. The Power of Diversification
It’s easy to understand the benefit of investing in Australian equities given the long history of dividends, tax benefits (via franking credits) and our familiarity with household names including the banks, Telstra, Wesfarmers, AGL etc. which have performed strongly in recent years. Often overlooked is the importance of going beyond our shores to reduce investment […]
A fundamental attribute for being a successful investor is the virtue of patience. This is having the patience to focus on achieving your long-term goals and sticking to your portfolio’s target asset allocation without being thrown off course by inevitable bouts of sharp rises and falls in markets along the way. Impatience must surely rank […]
In looking back at the major news events during 2016 we thought it worthwhile to reflect on how the media affects markets and investor expectations and emotions. US election in November 2016 – leading into the home stretch all reports predicted Hillary was a sure bet, there was no way Trump was going to win. […]
2016 has seen some major news events (Brexit, the US election) which increased short term volatility in equity markets around the world. Despite the recent volatility, market returns over the last 12 months to 30 November 2016 have been strong. The Australian equities market (ASX 300) has increased by 5.8%. Once dividends are included, the […]
“Still today, the definition of investment risk remains the volatility of share prices…we refuse to accept volatility as a problem. Our primary risk is not losing money but outliving it.” – Peter Thornhill (Financial Commentator). This month the RBA reduced cash rates to 1.50% pa. At the height of the GFC cash rates were 7% pa. […]
In light of the recent market pullback we have provided the following charts to provide perspective of the longer term which paints a much different picture: The first chart below shows the return of the US Market since the GFC (2009) highlighting the pullback in valuations of greater than 7%. Whilst short term volatility can […]
In building an investment strategy to provide independent income streams for life after work we continue to analyse different asset returns given the impact of inflation is often underestimated. Even with a “low” 2.5% pa inflation rate over 20 years, this will result in a 60% rise in the cost of living. To put this […]
To ensure clients continue to get optimal investment outcomes we are continually seeking out reliable research and in the last few weeks the 30 June 2015 SPIVA Scorecard was released. This is a regular paper which compares the historical results of Australian and international equity managers to benchmark returns. In the latest report the evidence […]
The media would have you believe that a successful investment experience comes from picking stocks, timing your entry and exit points, making accurate predictions and outguessing the market. Is there a better way? It’s true that some people do get lucky by making bets on certain stocks and sectors or getting in or out at […]
To ensure clients continue to get optimal investment outcomes we are continually seeking out reliable research and in the last few months the 30 June 2014 SPIVA Scorecard was released. This is a regular paper which compares the historical results of Australian and international actively managed investments to benchmark returns. In the latest report the evidence […]
Spring in some years sees the media and then investors get excited (by negative news) and 2014 didn’t disappoint. After an uneventful six years of steady growth since the depth of the GFC, we were suddenly reminded by financial news headlines such as in October 2014 ‘September shocker as Australian Shares lose $90 billion’ that […]
Ways you can protect your income against rising living costs include: Invest and maintain investments in the key businesses and sectors of the economy (both in Australia and internationally) who generate and sell the products we commonly buy and consume. Stay the course and invest regularly. This may include investing new savings or reinvesting surplus […]
Have you wondered why the Australian market appears to have lagged the US this year? The US Dow Jones Index continues to set all time highs having passed its pre-GFC high in February 2013 whilst the Australian ASX 200 remains some 25% below its pre-GFC high as shown in the following price only chart: Dow […]
(1) “For some reason people take their cues from price action rather than from values. Price is what you pay, value is what you get.” If you own a company with total assets of $1M and someone offers you $700,000 – do you sell even though the price is less than the value? In reality, […]
On the 1st August 2012 Vanguard reduced fees for seven of its wholesale investment trusts. Fund growth (for reasons noted above) and a commitment to maintaining low costs saw investors benefit through a fee reduction which has resulted in most Vanguard funds moving to about one fifth of the average Australian managed fund fee for […]
The latest results from the independently researched Standard & Poors Index Versus Active (SPIVA) Australian scorecard reinforce how difficult it is for active investment managers to generate better than the market returns (referred to as “beating the market”) after fees on a recurring basis. The publically available SPIVA research report measures the performance of active […]
Be it ongoing banking woes in Europe, declining property prices or the slowdown in the resource sector, in many cases the financial media continues to paint a bleak picture of the investment environment. However there is an untold story of success starting to make itself heard amongst wise Australian investors. The widespread reaction to continued […]
History shows investment inflows (people buying) are highest after periods of strong performance and outflows (people selling) peak after periods of poor performance. In other words investors tend to buy at high prices and sell at low prices resulting in wealth destruction and performance below that of what markets deliver. Source: Bloomberg and ICI as […]
‘And you thought 2011 was tough?’ So went the headlines in December as media and market pundits, reflecting on a miserable year, saw no respite for investors in 2012. But markets have a funny way of confounding expectations. To be sure, the reasons to be anxious were piling high as the year turned, with European […]
Warren Buffet, in his 1997 Chairman’s Letter to the Shareholders of Berkshire Hathaway Inc., offered this advice, which is just as relevant today as it was then. A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices on beef? […]