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US
recession risk, bond tents, benchmarking &
global small caps
Hamish Douglass leads
Fodder this week with a 6-minute video Insight on
why it's our duty to encourage investors to focus on
the long-term. Chris Watling looks at whether the US
is heading for recession (probably, the risks are
rising) and along the way explains which indicators
are the most reliable (not many). Chris will be with
us in person in February for
Markets Summit 2017. Michael Kitces explains how
a "bond tent" can help manage sequencing risk for
pre- and post-retirees
(it sounds complex, but it's not).
Watch Professor Ron Bird's top-10 rated Conference
presentation and you may never tie a manager
to a benchmark again. Finally, Lazard asks whether
portfolios have enough global small cap equities.
All the best for a great weekend's continuing
education - Graham
P.S. Earn up to 17 CE hours
via the online
Conference 2016 Resources Kit.
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LATEST... |
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Philosophy/Finology
This is not the time to stop thinking
While parts of the asset management industry appear
to be dumbing down, we must continue to educate
individuals on the differences between investment
and speculation.
Hamish Douglass, Magellan Financial Group |
Resources
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Markets
Forecasting US recessions - what works and what
doesn't
Broad analysis of generally effective indicators of
US recessions leads to the conclusion that recession
risks in the US are clearly continuing to rise. A
wide range of indicators confirm the message
although some doubts remain.
Chris Watling, Longview Economics
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Research
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Strategies
Using a bond tent to navigate the retirement danger
zone
Perhaps the best way to manage sequence of return
risk in the years leading up to retirement and
thereafter is simply to build up and then use a
reserve of bonds to weather the storm.
Michael Kitces, Pinnacle Advisory Group
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Research
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Strategies
Manager benchmarking is a pox on both investors and
markets
It seems sensible to make investment managers
accountable by requiring them to perform relative to
a benchmark. But this kind of motivation has a
perverse effect.
Ron Bird, University of Technology Sydney | 0.50 CE
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Resources
* Rated
in the top 10 presentations by Conference 2016
delegates
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Markets/Investing
Do you own enough global small caps?
A satellite allocation to global small caps can
increase portfolio efficiency over the long term.
Lazard Asset Management
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White Paper
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Not their fault
Surely we can't blame central banks for the lack of
fiscal stimulus?
Tim Farrelly, farrelly's
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Comment
The failure to understand rebalancing
Of course, to rebalance to the same mix one must
sell relative winners since last rebalancing and buy
relative losers. In any case, I'm not saying there's
something wrong with rebalancing...
Michael Edesess, EDHEC-Risk Institute
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Comment
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RECENTLY... |
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Philosophy
We must change our legacy for the better
The financial system that we (banks, portfolio
managers, researchers, advisers...) bequeath is
unstable, un-trusted and built on inappropriate
theory with mis-aligned incentives.
Prof Jack Gray, UTS
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0.50
CE |
Resources
* Rated
in the top 10 presentations by Conference 2016
delegates
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Markets
The return of fiscal policy
Central banks have been driven to adopt increasingly
unconventional monetary policies - yet most
economies are far from where they need to be. We
should begin activating fiscal policy.
Nouriel Roubini, Roubini Global Economics
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Opinion
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Markets
Desperate central bankers
The lack of response at the zero bound of policy
interest rates is hardly surprising. In fact, it is
strikingly reminiscent of the so-called liquidity
trap of the 1930s. What is particularly
disconcerting is that central bankers remain largely
in denial.
Stephen Roach, Yale University
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Opinion
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Markets/Strategies
Geopolitics and the consequences of choice
The gravest geopolitical challenge is not terrorism,
the Middle East, or Brexit, but an eruption between
China and the US, the world's two largest economies
and militaries. It is always when the most powerful
countries clash that the world is altered
fundamentally.
Stephen Kotkin, Princeton University
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Opinion
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Strategies
The power and limitations of Monte-Carlo simulations
Predicting the future raises a significant number of
issues when creating an investment plan. Monte Carlo
simulations will illuminate the nature of that
uncertainty, but only if those using them understand
how it should be applied – and its limitations.
David Blanchett & Wade Pfau
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Opinion
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No rebalancing and risk tolerance
Is this just saying that an unrebalanced portfolio
will often outperform a rebalanced portfolio because
the exposure to the higher returning assets
(probably equities) will increase over time?
Tim Farrelly, farrelly's
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Comment
The failure to understand rebalancing
It certainly wouldn't be surprising for a client's
risk tolerance to increase as the value of the
client's portfolio increases...
Michael Edesess, EDHEC-Risk Institute
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Comment
Currency is the ultimate alternative
It's a good point that it is difficult (but not
impossible) to predict a given currency level on a
given day. The dynamic hedging decision, though,
isn't just about the NZD...
Dori Levanoni, First Quadrant
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Comment
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