Fodder kicks off with a Guide written by practitioner Jerome Lander and funds management exec Andrew Fairweather, addressing the most fundamental portfolio construction issue - creating an Investment Policy Framework that encapsulates your investment philosophy. Anatole Kaletsky argues we may be seeing a major structural shift in economic doctrine, to overcome the failures of market fundamentalism so starkly exposed by the GFC. We highlight Prof Moshe Milesvky top-rated lecture from Conference 2015 on integrating human capital into portfolio construction. It's part 1 of the lecture series that Moshe will continue at our upcoming Strategies Conference (23-24 Aug) in which he'll argue the importance of using "biological age" (not chronological age) in retirement planning. We feature PIMCO's Rob Mead on the biggest portfolio risk ahead. And we end with a lecture from Berkeley Professor Shachar Kariv on observing how a client makes financial trade-offs as a more accurate measure of their risk preferences.
- All the best for another great week's continuing education - Graham
P.S. PortfolioConstruction Forum Strategies Conference 2017 (23-24 August) - It all adds up! Early bird savings end Thursday 27 Jul

QUOTE OF THE WEEK...

Learning is not a spectator sport. - Anonymous

LATEST...

Philosophy
A Guide to forming an Investment Policy Framework
This Guide aims to assist practitioners develop their own investment policy framework by providing a helpful checklist of issues to consider, and publicly available examples from institutions in Australia and globally.
Andrew Fairweather & Jerome Lander | More

Markets
A "Macroneconomic" Revolution?
Next month will mark the tenth anniversary of the GFC. Why have so few of the policies that might have ameliorated economic conditions and alleviated public resentment been implemented since?
Anatole Kaletsky, GaveKal | More

Strategies | Finology
A client's life is a mix of stocks & bonds - allocate around it
It is time to properly account for risk characteristics of client’s most valuable asset - their human capital. This isn’t easy to implement and places practitioners in a difficult situation.
Moshe Milevsky, York University | 1.50 CE | More

Markets | Strategies
Don't confuse the winds of change with "hot air"
The biggest portfolio risk in 2017 will be over confidence in assigning scenario probabilities. Don't confuse the winds of change with "hot air" when it comes to portfolio construction.
Robert Mead, PIMCO | 0.25 CE | More

Finology
Achieve client goals with minimum discomfort
Actually observing how a client makes financial trade-offs can provide a more accurate measure of their risk preferences than if we simply ask them questions about what they think they would do.
Shachar Kariv, University of California, Berkeley | 1.00 CE | More

A small rise in rates may have little impact
In terms of the impact to changes in interest rates from here, I’m not sure the suggestion that the “economy's sensitivity to interest rate changes has also doubled” holds true in general terms.
Brad Matthews, Brad Matthews Investment Strategies | More

What about asset price inflation?
Call me nuts but the lowest interest rates in the history of mankind still gives me great consternation.
Doug Turek, Professional Wealth | More

RECENTLY...

Markets
Policy rules versus discretion
The use of discretion in setting monetary policy has had a somewhat checkered history. Ironically, the debate about rules versus discretion is just heating up as the FOMC sets a steady course for unwinding its extraordinary policy measures.
Dr Robert Gay, Fenwick Advisers | More

Markets
The G20's misguided globalism
This year's G20 summit in Hamburg promises to be among the more interesting in recent years. The knee-jerk globalism that suffuses G20 meetings feeds into the populists' narrative.
Dani Rodrik, Harvard University | 1 comment | More

Finology
What do we know about investor irrationality?
It has become conventional wisdom that underperformance is due to the irrational investment behavior of individuals. It is time to question whether the conventional wisdom has even a scintilla of meaning.
Michael Edesess, EDHEC-Risk Institute | More

Markets
Cycles in a low growth world
In a low growth, low inflation, low interest rate and low yield environment, a cyclical economic upturn presents opportunities in asset classes such as equities and real estate.
Andrew Milligan, Standard Life Investments | More

Markets | Investing
Bonds are the "walking dead" - time to rotate into loans
Bond investors have enjoyed a multi-decade bull run in yields, fuelled by unsustainable post-GFC stimulus, but "the times they are a-changing".
Jeffrey Reemer, Invesco | 0.25 CE | 3 comments | More

The changing world
The economic world has not changed - it is like gravity. The current outcome (e.g. low interest rates) has changed because the relative inputs are different...
Michael Chamberlain, MCA NZ | More

Demographics seem to be the key
I suspect that you are right and that slowing demographics are behind the slowing of growth and low interest rates...
Tim Farrelly, farrelly's | More

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