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G'day
It's a bit of a provocative
Forum Fodder this week. Tim Farrelly argues that as alternative assets
begin to be popular, performance dwindles i.e.
there is no safety in numbers. Yale's Robert Shiller (2013 Nobel
laureate in economic sciences) describes his
recent meeting with Prime Minister Shinzo Abe, and
the importance of "stories" in understanding why the global economic
recovery has remained weak since 2009 - except for Japan, which he attributes to confidence in
Japan's "story". Michael Edesess
reviews Fama and French's latest paper on a five-factor asset pricing
model, concluding it's "too opaque to allow thorough independent
analysis or confirmation" so as to be of any use to advisers or investors.
Fama as you know, shared the 2013 Nobel Prize in Economic Sciences, with
Shiller - so it's a brave man who criticises his work! We
also highlight
Ron Temple's "The wrong route to the right destination?" presentation
from Markets Summit. It missed out by only the slimmest of margin
(0.01%) on receiving the Delegates' Pick Award (behind
Hamish Douglass).
Ron's and Hamish's views are diametrically opposed and yet equal numbers
of delegates agreed with both arguments on the day. |
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"Attend" them and decide for
yourself who you agree with. Finally,
Sean Henaghan and his colleagues
from AMP Capital
argue that a different approach is needed to monitor the success of target date funds.
As always, all the best for a great weekend's learning and week ahead -
Graham
P.S. If you have a view on any of this, use the Comments area to express
it!
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LATEST...
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Safety in numbers?
When any investment and, in particular, an alternative investment begins
to be considered mainstream with attendant big inflows, the end is
generally nigh.
Tim Farrelly, farrelly's | Opinion
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The global economy's tale risks
Just as it is hard to make a blockbuster film every time, no leader can
consistently shape the narratives that affect the economy. But they need
to try.
Robert J. Shiller, Yale University | Opinion
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The takeaways from the latest Fama-French research
Does Fama and French's latest work, A Five-Factor Asset Pricing Model,
provide any information that can be of practical value to advisers or
investors? The answer is no.
Michael Edesess, Fair Advisors | Opinion
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The wrong route to the right destination?
We must question common assumptions about the US and emerging markets
to ensure we are focusing on the best routes to the right destination.
Ronald Temple, Lazard Asset Management | Resources
* Second
highest rated session of the Markets Summit 2014 program
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Monitoring the success of target date funds
The dynamic nature of target date funds - encompassing multiple
objectives and changing asset allocations over time - raises challenges
for performance reporting.
Sean Henaghan, AMP Capital Investors | White
paper
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Other good
reads
Did Hyman Minsky find the secret behind financial crashes? Minsky
spent his life on the margins of economics but his ideas gained currency
with the 2007-08 financial crisis.
The great divide over market efficiency - Cliff Asness & John Liew
attempt to reconcile the Nobel committee's decision to split the baby
that is the prize in economic sciences.
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RECENTLY...
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Heading for the exit
The Fed's clear message from yesterday's FOMC meeting is that it will
stay the course on exiting QE as gracefully and slowly as possible.
Dr Robert Gay, Fenwick Advisers | Opinion
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Malthus, Marx, and Modern Growth
Will each future generation continue to enjoy a better quality of life
than its immediate predecessor? It's likely, but the risks seem higher than a few decades ago.
Kenneth Rogoff, Harvard University | 1
comment | Opinion
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Thoughts on investing - scale and skill in active management
It's the eternal debate - can active management outperform? Two recent
reports - one from Warren Buffett, the other academic - offer some interesting insights.
Angela Ashton, PortfolioConstruction Forum | Research
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How much do clients withdraw in retirement,
really?
As the logic goes, retired clients deplete their portfolios and pass away as the years go by, so a firm with aging clients is akin to a
rapidly depreciating asset. Is this true?
Michael Kitces, Pinnacle Advisory Group | Opinion
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Why the US recovery will surprise on the upside
There are
sign-posts that clearly suggest the US is ready to surprise on the upside,
with significant implications for portfolios.
Hamish Douglass, Magellan Financial Group | Resources
* Awarded
Delegates' Pick Award for Best Markets Summit 2014 Presentation
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A year for genuine improvement
2014 is likely to be a year of genuine improvement in the global
economy, and one where uncertainty is rather low.
Christopher Probyn, State Street Global Advisors | Opinion
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PLUS...
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Markets Summit
2014 - The Great Escape - Resources Kit online
The most successful
Markets
Summit program yet (97% of delegates rating it good (42%) or excellent
(55%)), the 2014 program featured a stellar line-up of international and
local geopolitical specialists, economists, market/asset class experts,
and investment strategists. Each offered a high conviction idea
regarding the impact of Unconventional Monetary Policy on the
medium-term outlook for the global economy, key market or asset class -
and, of course, the implications for portfolios.
Access a baker's dozen of expert, high conviction insights to consider
applying when building portfolios.
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Preview the theme "Reconnecting the three Rs - Risk & Return (&
Relating)"
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Keep up to
date - follow us @PortfolioForum
There's no need to wait until
our weekly Forum Fodder email to know what's new with PortfolioConstruction Forum.
Just follow us on Twitter to hear as soon
as we release new articles on
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registration opens for our live programs.
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