Tim Farrelly kicks off this week's Fodder, taking issue with the recent widely publicised claim that the major Australian banks are overpriced. Then we feature Jonathan Pain's top-rated presentation from our recent Markets Summit 2017 program in which he argues that the winds have already changed (and the implications for portfolios). Bob Gay offers some tips on how investors can best navigate the normalisation of US interest rates. Prof Jeffrey Sachs argues that there are three Donald Trumps (none are very reassuring). And Michael Kitces and Derek Thurp explain how our cognitive and behavioural biases can interfere with our (and clients') ability to properly interpret Monte Carlo analysis of retirement spending plans.
All the best for another week's continuing education - Graham
P.S. The Markets Summit 2017 Resources Kit and Finology Summit 2017 Resources Kit are now online - so all Members can "attend" and earn up to 11.25 CE hours (and if you were at the live program, there are still 5 sessions you can "attend" and earn more CE.)

QUOTE OF THE WEEK...

"Educating the mind without educating the heart is no education at all." Aristotle

LATEST...

Markets | Investing
Low interest rates matter. So do imputation credits.
A recent, widely circulated article suggested the major Australian banks are overpriced. But including the effect of imputation and a view on interest rates makes a huge difference...
Tim Farrelly, farrelly's | Opinion

Markets | Strategies
The winds have changed
The tectonic plates of the political and economic landscape are rupturing. Brace yourselves for a wild and entertaining ride...
Jonathan Pain, The Pain Report | 0.25 CE | Resources
* Rated in the top 5 presentations by Markets Summit 2017 delegates

Markets
Navigating normalisation
History indicates a reasonably graceful exit from ultra-low interest rates is possible - and that investors can weather the storm with the right strategy. Let's sort out which risks are worth worrying about and which are not.
Dr Robert Gay, Fenwick Advisers | Opinion

Markets
The three trumps
What Donald Trump's rise to the US presidency portends requires unraveling three mysteries - because there are three versions of Trump.
Jeffrey Sachs, Columbia University | Opinion

Strategies
The wrong-side-of-maybe falllacy
Monte Carlo analysis is commonly used to evaluate retirement spending plans - but our cognitive and behavioural biases may interfere with proper interpretation of the results.
Michael Kitces & Derek Tharp, Pinnacle Advisory Group | Research

Empathy and neuroscience
This is an interesting paper on the way that work is evolving in financial planning. In developing training programs for empathy is there sufficient quality neuroscience research to build robust courses?..
Nigel Douglas, Douglas Funds Consulting | Comment

Empathy training
Empathy is a very trainable/measurable skill. It can be observed based on quality of advisers responses not questions...
David Lazenby, ScenarioNow | Comment

RECENTLY...

Markets
The economic and geopolitical consequences of Mr Trump
There is no subject of more importance to investors than what Donald J. Trump will do with the powers of the US presidency. There are pluses and minuses of Trumponomics.
Niall Ferguson, The Hoover Institution | 0.50 CE | Resources
* Rated in the top 5 presentations by Summit 2017 delegates

Markets
Why Trump can't bully China
The US cannot "win" a trade war with China, and any victory will be Pyrrhic - leading to massive price increases in the low-cost stores on which many Americans rely.
Kenneth Rogoff, Harvard University | Opinion

Strategies | Finology
Finology Summit 2017 - The winds of change - key takeouts
Finology Summit 2017 featured international and local finology experts presenting their high conviction thesis on how the winds of change are affecting how investors think and behave with respect to money, and how we can better to relate with them. Here are our key takeouts.
Will Jackson, PortfolioConstruction Forum | Key Takeouts

Markets
Economic growth and equity market returns
This paper revisits the relationship between economic growth and equity market returns. Much of the literature has focused on the US so this analysis includes Australia and the UK, too.
Michael Furey, Delta Research & Advisory | 3 comments | Research

Finology
The fourth industrial revolution: what it means, how to respond
We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In the end, it all comes down to people and values.
Klaus Schwab, World Economic Forum | Opinion

Great start, but....
While plenty of effort has been devoted to quantifying the notion of tolerance, comparatively little has been directed towards defining capacity...
Brent Bevan | Comment

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