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G'day
What a week it's been for markets - and, not surprisingly, this week's
Fodder has a distinct markets focus. As
GaveKal notes, the German word Torschlusspanik (literally
gate-shut-panic) sums things up perfectly. Taking a bigger picture
perspective (and written before the market rout this week), Dominic
McCormick warns that while historically,
three or four rate rises have been the prelude to major market falls,
relying on that indicator going forward may be very dangerous as
things may well actually be different this time - and right on cue,
markets may have proved him right. So has market volatility finally
turned for good? Longview Economic's Chris Watling argued so in his
recent Conference presentation, and this week we publish his supporting
white paper on
why equity volatility has passed its low for this cycle.
On a more optimistic note, Dr Robert Gay looks at
why China's economic agenda has changed dramatically - and with it the
policy framework of its central bank, as it lays the groundwork for
the transition to a flexible currency. We highlight Schroders' Alan
Brown excellent insight from our recent Conference, in which he argues
that
thinking conventional tools will keep us out of trouble may be a big
mistake (echo'ing Dom's warning about relying on what's worked in
the past). And, be sure to read
Angela Ashton's review of a new research paper by two Australian
academics that
advocates the use
of glide paths to best manage
sequencing risk i.e. the risk of poor |
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poor returns right before or after
retirement - which, if Chris is right, is going a key risk for
portfolios going forward.
All the best for some great weekend learning - Graham
P.S. PortfolioConstruction Forum Conference
earned a record 31.75 CPD points for the three days -
if you attended, go to MyCE for your CPD accreditation.
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LATEST...
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US rate signal may be broken
Relying on Fed tightening to predict the next serious sharemarket
weakness may be very dangerous.
Dominic McCormick, Select Asset Management
| Opinion
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Torschlusspanik!
The German word for what we saw in markets this week is Torschlusspanik.
Literally "gate-shut-panic", it describes the nasty crush when everyone
rushes at once for an exit.
GaveKal
| Opinion
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Market volatility – has it turned?
Earlier this year, volatility across a whole range of key global assets
reached major multi-year lows. But, equity volatility, we expect, has
passed it's low for this cycle.
Chris Watling, Longview Economics
| White
Paper
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China’s Gordian Policy Knot
China has about five years to lay the groundwork for the transition to a
new monetary policy framework with a currency that is sufficiently
flexible. No other course is viable.
Dr Robert Gay, Fenwick Advisers
| White
Paper
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Prepare to change course
Warning, there may be rocks ahead. Reconnecting risk and return must
surely be the right focus - but thinking conventional tools will keep us
out of trouble may be a big mistake.
Alan Brown, Schroders
| Insight
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Down the retirement risk zone with gun and camera
This is a particularly relevant review of literature on sequencing risk,
considering as it does the impact of Australia's age pension on
retirement spending strategies.
Angela Ashton, PortfolioConstruction Forum
| Research
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RECENTLY...
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Markets' rational complacency
An increasingly obvious paradox has emerged in global financial markets
this year. While geopolitical risks have multiplied, markets remain
buoyant, if not downright bubbly.
Nouriel Roubini, Roubini Global Economics
| Opinion
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Geopolitical risks (and rewards) - the impact on portfolios
If geopolitics is far more important in considering investment markets
today, how do we integrate geopolitics into portfolio construction?
Marko Papic, BCA Research
| Resources
*** Rated in top 10 by delegates at Conference 2014 ***
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Hearing echoes of 1987
Today is much less reminiscent of 2007, when global equity prices were
at similar levels to today, than of 1987. But it seems too early for
investors to panic, or even reduce risk.
Anatole Kaletsky, GaveKal
| Opinion
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comment
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Retirement risk, rising equity glidepaths & valuation-based AA
The dynamic duo (Kitces and Pfau) are back in their search for the
ultimate truth about retirement income planning and how to structure
portfolios to minimise drawdowns.
Angela Ashton, PortfolioConstruction Forum
| Research
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An update on the route and destination
In the US, despite moderate growth, we see very attractive valuations
while many emerging markets are undervalued. But 7% growth in China is
unrealistic.
Ronald Temple, Lazard Asset Management
| Opinion
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PLUS...
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