Fodder starts with Dr Woody Brock's review of the three key risks facing investors. In this first of three parts, Woody shows that, notwithstanding the barrage of media messages about how risky life has become, economic risk at least has actually dropped dramatically. Yale's Stephen Roach rings the bell on the balance of economic power - soon, developing countries will have a greater share of world GDP than developed countries, with radical implications. Renowned economist, Lacy Hunt, reviews the Fed's history of tightening and concludes that the secular low in bond yields remains in the future. We feature Australian-based CIMA® certificant Tim Macready's award-winning paper on including an impact investing allocation in portfolios. And we end with Tim Farrelly's top 3-rated Finology Summit session on how a formal, written spending policy can help investors focus on what's really important.
All the best for another week's continuing education - Graham
P.S. Stand for more with CIMA certification (more knowledge, more skill, more competence) - the peak, specialist certification for anyone involved in constructing multi-asset, multi-manager portfolios. Enrol today!

QUOTE OF THE WEEK...

"The purpose of education is to replace an empty mind with an open one." - Malcolm Forbes

LATEST...

Markets
The dramatic decline of risk - part 1
In a world of risk-on/risk-off investing, it is important for investors to know where true risks lie and where they do not lie. In fact, macroeconomic risk has decreased by well over 80% during the eight decades.
Dr Woody Brock, SED | White Paper

Markets
A world turned inside out
The pendulum of world economic growth has swung - by 2018, the developing countries will have a greater share of world GDP (59%) than developed countries (41%). New? Absolutely. Normal? Not even close.
Stephen Roach, Yale University | Opinion

Markets
Fed tightening - past and present
In a century of Federal Reserve tightening cycles, typically, the Fed has tightened too much and/or for too long. The current tightening cycle will not end any differently.
Lacy Hunt & Van Hoisington, Hoisington Investment Management | Opinion

Strategies
Impact investing in the context of a diversified portfolio
This paper presents evidence to suggest that an allocation to impact investments can contribute potential portfolio benefits from the risk-return profile and low correlation with other asset classes.
Tim Macready, CIMA® & Simba Marekera, Brightlight Impact Advisory | 0.50 CE | White Paper

Finology
Focus investors on goals with a retirement spending policy
A formal, written spending policy can help investors focus on what's really important - will they meet their goals?
Tim Farrelly, farrelly's | 0.25 CE | Resources
* Rated in the top 3 presentations by Finology Summit 2017 delegates

Overvalued Assets
Thanks Tim, that US analysis succinctly illustrates that those assets are probably overpriced, as are many other assets in Australia and globally...
Mark Hayden, Hayden Financial Services | Comment

Who will buy assets redeemed by retirees to fund their retirement?
...in the developed world, retirement age needs to rise over time, or savings rates must rise dramatically...
Douglas Isles, Platinum Asset Management | Comment

Housing and superannuation
With Australia's ridiculous Asset Test system, compared to New Zealand's brilliant system, low income people will eventually save up $350,000 in their super and then buy a house, only to go on the full aged pension...
Steve Blizard, Roxburgh Securities | Comment

RECENTLY...

Markets
Macron’s mission
The centrist Emmanuel Macron's success in the first round of the French presidential election is likely to re-energise Europe.
Prof Harold James, Princeton University | Opinion

Markets
Decoding the latest Fed speak
The Fed's talk of a symmetrical inflation goal played well to markets when they were in the throes of the reflation trade. Markets are now flipping to the conclusion that transparency amounts to dovish policy.
Dr Robert Gay, Fenwick Advisers | Opinion

Markets | Investing
Now is the time to accumulate duration
As 2017 began, there was (once again) an air of optimism that interest rates are about to return to normal. This optimism dismisses the significant structural headwinds that are prevalent.
Brett Lewthwaite, Macquarie Investment Management | 0.25 CE | 3 comments | Resources
* Rated in the top 10 presentations by Markets Summit 2017 delegates

Investing
Bonds are different: active v passive
Opinions in the active-passive investment debate have drifted poles apart over recent years. This paper finds that, unlike their stock counterparts, active bond mutual funds have largely outperformed their median passive peers over the sample period.
Jamil Baz et al, PIMCO | White Paper

Finology
People know what to do to change - they just need to do it!
Can people easily change their behaviour and take action without support? The Theory of Planned Behaviour can help to promote real change and convert client intentions into outcomes.
Prof Joanne Earl, Flinders University | 1.00 CE | Resources
* Rated in the top 5 presentations by Finology Summit 2017 delegates

A recipe to transfer from the young and poor to the rich and wealthy
...having access to my super to fund a home deposit sounds appealing, until you think about it for more than two seconds.
Robbie Reid, Eqeus | Comment

Housing and superannuation
Yet again, Professor Ron Bird is absolutely correct...
Ray King, Sovereign Investment Research | Comment

Tim Farrelly's observations on US equity valuations
As usual, Tim brings much needed perspective to the questions we regularly ask ourselves...
Cameron Wenck, Shadforth Financial Group | Comment

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