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G'day
This week's Fodder features three of the giants of the investment
industry. First up is renowned investment thinker, Dr Horace "Woody"
Brock, a regular speaker at PortfolioConstruction Forum programs. Woody
weighs in with
his usual precise style of analysis - this time on Thomas Piketty's best
selling "Capital in the Twenty First Century". Uniquely for a
700-page tome on economics, it's No 1 on Amazon's bestseller list and has
become a conversation piece among well-read people. But does inequality
really matter to building better quality investment portfolios?
Read Woody's piece and you'll see why the answer is a resounding yes!
Mohamed El-Erian then picks up the cudgels with his views on
why inequality is a major economic concern that impacts all portfolios.
On a different note, we feature an interview with Bill Sharpe in which
he outlines his current work in the field of
retirement income planning (as dull as that sounds, it's anything
but - he's incredibly engaging). And speaking of retirement planning -
we should stop doing that, explains Michael Kitces (another of our
Faculty) and
talk instead with clients about "financial independence" (and while
we're at it, replace "retirement income" with "cash flows"). On the
communication front, we also feature the recent presentation by another
Faculty member, Prof Jack Gray, in which he argues that
we need to replace risk reports with risk rapports i.e. engaged
conversations. And, finally, picking up on last week's theme on
market |
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volatility,
BlackRock's Russ
Koesterich
offers his
four takeouts on the portfolio construction implications of higher
market volatility.
All the best for some more great weekend learning - Graham
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LATEST...
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Capitalism, inequality, and Piketty
Thomas Piketty’s "Capital in the Twenty‐First Century" is certainly the
economics book of the year. We have been asked numerous times to
appraise his ideas.
Dr Woody Brock, SED
| Research
Paper
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The inequality trifecta
Most countries face a trio of inequalities – of income, wealth, and
opportunity. Beyond the moral, social, and political implications lies a
serious economic concern.
Mohamed El-Erian, Allianz
| Opinion
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Bill Sharpe on retirement income planning
One of the originators of CAPM, Sharpe (along with Markowitz and Miller)
was awarded the 1990 Nobel Prize in economics. I sat down with him to
discuss retirement income planning.
Robert Huebscher, Advisor Perspectives
| Interview
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Phrases that should be banished from retirement planning
The words we use and how we frame concepts have a powerful impact.
Perhaps the most crucial change in our retirement planning language is
simply to rename "retirement".
Michael Kitces, Pinnacle Advisory Group
| Opinion
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Risk rapporting
Formal reports redolent with data and analysis fail to communicate risks
as people actually feel them. Reports need to be replaced by rapports,
by engaged conversations.
Prof Jack Gray,
UTS
| Resources
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Four takeaways from the recent volatility spike
Last week's volatility surprised many. How should portfolios be
positioned? And what does this recent bout of volatility tell us about
the economy and financial markets?
Russ Koesterich, BlackRock
| Opinion
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RECENTLY...
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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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PLUS...
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