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 Friday 23 January 2015

The independent professional development service for investment portfolio construction practitioners


Markets are off to another "interesting" start in 2015 (I should probably stop expecting otherwise). Oil prices, the Swiss dropping their euro peg, ECB's €1.1 trillion QE, a falling A$... But, portfolios must still be designed, built and managed. Markets Summit 2015 (17 Feb 2015) couldn't be better timed. 

Meanwhile, our first Fodder for 2015 kicks off with Core Faculty member, Michael Kitces, proposing a new way of thinking about retirement income strategies. He argues against the structure advocated by Jeremy Cooper and Wade Pfau in their recent paper in which they classified approaches to building retirement incomes into probability first and safety first. Michael's point is that any retirement income strategy can be managed in a manner that is "safe" or "risky" (and all have at least some probability of failure). It's better to distinguish between retirement income strategies as either "risk transferred" or "risk retained".

Turning to solutions, Zenith highlights a highly rated Australian equities fund that is largely "undiscovered" by practitioners (read their full report to understand more).

We finish off with a trio of articles on these "interesting" times. GaveKal argues Australia's next on the block (it's bitter but essential reading) while regular contributor Dr Bob Gay explains why falling oil prices are more therapeutic than destructive for most countries. John Mauldin then offers his unique view on the reasons for the Swiss Central Bank's actions and its likely roll on effects - as he writes,

it's every central bank for itself.  Interesting times indeed!

All the best for some great long weekend learning! - Graham

P.S. Markets Summit 2015 (17 Feb 2015) is 95% sold out, with just 26 seats left!


Risk transfer vs risk retention
The real distinction in retirement income philosophies is not about which are "safe" and which are not. It is whether risk is transferred or retained (and if retained, managed).
Michael Kitces, Pinnacle Advisory Group

Undiscovered Fund: Active Au equities fund with a growth bias
An actively managed portfolio with a growth bias, positioned towards companies whose earnings growth potential is greater than the market's expectations.
Zenith Investment Partners

Australia, the next shoe to drop
Australia still looks like one of the holdout anomalies in global markets where the adjustment from a decade of mispriced assets has yet to fully play out. 
By Will Denyer et al, GaveKal

Deja vu deleveraging
As long as policymakers can stay on course and avoid the policy mistakes of the late 1990s, the oil price collapse could prove more therapeutic than destructive.
By Dr Robert Gay, Fenwick Advisers

The Swiss release the Kraken
In an era when central bankers are supposed to be more open, collaborative, and communicative, why did the SNB decide to turn on a dime and shock the markets?
By John Mauldin, Mauldin Economics

Member comments
Academy Spring Seminar - Key takeout

There is more to the debt asset class than meets the eye. It is important to not see debt as the "safe" component of client portfolios - and it can replace or compliment the equity composure of the portfolio when considering assets or strategies not as equity or debt...  but as forms of return with risk characteristics.
Fergus Hardingham, FM Financial Solutions
More about Academy


The return of currency wars
The right policies are the opposite of those pursued by the world's major economies. No wonder global growth keeps disappointing. In a sense, we are all Japanese now.
Nouriel Roubini, Roubini Global Economics

A better class of bubble
Only the most die-hard peak-oil proponents, or other gold-bugs, fail to acknowledge that the commodity bubble has burst. Is it a positive, or negative, for markets?
Louis-Vincent Gave, GaveKal

Trend to global investing still has much further to go
Recently, I attended the Eureka Report Around the World of Investing Forum. The overwhelming impression was that global investing is very new to many Australians.
Dominic McCormick, Select Asset Management

Conference 2014 Top 10
How best to take portfolio risk
The traditional approach to portfolio construction is to own a diversified portfolio, adjusting total risk up or down. An alternative is to take a bucket approach.
Michael Kitces, Pinnacle Advisory Group

Lessons from the last 40 years for the next 20
Looking back over the last 40 years, it is clear that, in the next 20 years, successful asset owners and managers are going to listen to Einstein and stop making things too simple.
Alan Brown

Member comments
The lack of comment on this article speaks volumes...

As a stockbroker with a major national Firm, I can readily agree with your observations [about exposure to China A shares]... Comment

The Yin & Yang
My initial observations on your comments are 1. you're right about interest rates and divs in Australia...  Comment


Markets Summit 2015 - Cyclical? Structural? Secular?
What's really driving the outlook for markets? Markets Summit is THE investment markets scene setter of the year. The jam-packed, one-day program features 15+ local and international geopolitical specialists, economists, market/asset class experts, and investment strategists debating their best ideas on the key cyclical, structural and secular issues that are driving the medium-term (3-5 year) outlook for markets - and, of course, the implications for portfolios.
17 FEB 2015 | SYDNEY | 10+ CPD | A$575+GST |
Register now

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