Calendar 2019 is ending on a relatively positive note, especially compared to the same time in 2018. Policymakers have a chance to "fix the roof while the sun is shining".

With interest rates on government debt at multi-decade lows, a number of leading economists have argued that almost every advanced economy can allow debt to drift up toward Japanese levels. This ignores what can go wrong.

Practitioners are often reluctant to adopt new solutions because of high risk. "If it has never been done, how do you know it works?". But failure to try new approaches can mean missed opportunities.

Sharpe proposed that active investing must be a losing pursuit in aggregate. This paper takes a critical look at that proposition, and whether it is worthwhile considering using active fund managers.

Central bankers and senior economic officials now almost unanimously believe that monetary policy has reached its limits.

It is only a matter of time before some shock triggers a new recession. Because policymakers will be pressured to do something, "crazy" policy responses will become a foregone conclusion.

The Sino-American trade war may well be about to enter its endgame. The next round of negotiations could be the last real chance to find a way through the trade, technology, and wider economic imbroglio that has been engulfing both countries.

Are markets efficient? Recent research suggests not, finding media impacts information dissemination, and mispricing explains the value premium.

Christine Lagarde will soon succeed Mario Draghi as president of the ECB. She is taking the reins at precisely the right moment for Europe to make the changes needed to avoid a second lost decade.

There are several geo-economic games of chicken playing out. In each case, failure to compromise would lead to a collision, most likely followed by a global recession and financial crisis.

Policymakers are coming to realise that it is neither wise nor feasible to rely constantly on central banks for economic-policy support. The case for shifting the burden from monetary to fiscal policy is becoming more apparent.

On the positive side - still - is the US consumer, the household sector. On the negative side is synchronised global industrial deceleration, and markets underestimating the negative trajectory of the US/China relationship. Investors need to avoid chasing momentum in equity markets and yield and duration in fixed income markets.

Trump's administration is flailing at antiquated perceptions of the Old China that only compound the problems it claims to be addressing. Financial markets are starting to get a sense that something is awry.

With bond prices going parabolic in the past few weeks, once again market participants are wondering whether the bond market is in a bubble.

Financial regulators have been reluctant to dish out jail terms. A new research paper finds that prison terms can be a cost-effective governance mechanism. A second paper gauges the impact of self-control on investment behaviour.

In the increasingly intense strategic and economic competition between Washington and Beijing, it's naive to think Australia can just sit on the sidelines.

Hindsight has taught us the importance of active core bond funds as an insurance policy and now is the time to consider expanding your investable universe as the secular need for income intensifies.

The rise of intangible assets has created a new level of economic potential for successful businesses. For both growth and value investors, the nature of fundamental analysis must evolve to match an intangible world.

A broader approach to retirement income, looking beyond yield and incorporating expected return and risk, means some income-generating assets should be excluded from retirement portfolios.

Since the GFC, we have seen a re-emergence of the low growth world which persisted before the 1950s. Investment returns in the 2020s and beyond will be concentrated in a few winners with real earnings growth.

Infrastructure's ability to provide consistent returns through market cycles, generate attractive long-term revenue streams, and provide diversification makes it a must-have inclusion in portfolios in the 2020s.

One of the best performing equity sub-asset classes over 20 years is seemingly being ignored. Investors should seriously consider an allocation to Global SMID equities in their portfolios.

Many investors are reconsidering a strong traditional overweight exposure to Australian equities. But structural forces driving domestic growth continue to support an overweight allocation to Australian equities into the 2020s.

Alpha still matters and an active approach can enhance portfolio returns, creating extra saving to be spent in retirement.

We can never know for certain how the macro backdrop will change or which investment style will dominate. But focusing on uncovering fundamental earnings leadership tunes out market noise, and enhances returns.

The conversation with retirees needs to move away from projections based on averages and volatility risk measures, towards a probability-based assessment of running out of money.

In times of lower growth and falling interest rates, volatility strategies can be used to produce a steady stream of income to complement other sources of returns.

Value investing experienced one of its worst underperformances in the decade since the GFC. As we enter the 2020s, valuations heavily favour value stocks and the data shows that value has a greater than 85% chance of outperforming growth from here.

This hypothetical Investment Committee considers three relevant, forward-looking economic and market scenarios which have a reasonable probability of occurring during the next two to three years.

The diverse characteristics of credit markets provides investors the ability to construct robust portfolios, offering investment opportunities suitable for all potential market environments.

To achieve a satisfactory return from equities, you must identify high quality forecastable businesses, apply a strict valuation discipline and have the conviction to be different from the herd.

The significant valuation gap between listed and direct infrastructure markets presents an opportunity to arbitrage value from the two as the gap closes. Understanding the weight of this change into 2020 and beyond is key.

Trailing a rising market can feel like missing out - but pure pursuit of highest returns can have unintended consequences. Protecting capital on the downside has a material impact on total returns.

Moving into the 2020s, global equity portfolios should be concentrated and highly selective, positioned to address both fundamental changes in the global backdrop and vulnerabilities in the successful styles of recent years.

Somehow the optimal growth/defensive asset split from the 1980s is still considered "balanced" today - never mind that for the first time since the 1930s, the cost of capital is stubbornly static at a negative real return.

Portfolio managers and investment advisers still too often follow their own values, rather than their clients’, when making investment decisions. In the 2020s, values will move from the periphery to the focal point for successful investments.

Prior to the GFC, you could build a retirement portfolio on the back of a 7% yield, virtually risk free. Today, without that free kick, a 7% yield is a much harder job, especially from a risk-budgeting perspective.

Limiting overlapping economic exposures more effectively creates concentrated yet diversified portfolios capable of meeting investors’ long-term objectives into the 2020s, while better managing risk.

Focusing on financially material ESG data and systematically including them into investment analysis facilitates 20/20 vision of a company’s risk-return profile.

Whether they realise it or not, investors use factors every time they make an asset allocation decision. Combining multiple factors can help investors increase the chances for investment success.

If we want a vibrant capitalist future in the 21st century, we need to support ethical legal frameworks for capitalism and practice Conscious Capitalism.

Portfolio managers don't have perfect vision. Better prediction accuracy results in more concentrated portfolios, higher turnover, higher position limits and higher returns and information ratios.

The decade since the GFC has been a challenging period for value style equity investing. Not surprisingly, investors are questioning the value of value investing.

A deliberate blend of emerging market debt and high yield opens up another universe of liquid, high income opportunities which can offer relative stability in returns and deliver the potential of higher income.

Future returns from infrastructure portfolios are less clear due to disruptive forces. Managing these risks requires an unrelenting focus on improving efficiency and customer service.

The 2010s challenged value investors as, paradoxically, cheap stocks became cheaper and expensive stocks grew more expensive. For those holding their nerve, the inconsistency sets up a good 2020s.

Artificial Intelligence, Machine Learning (ML), and Deep Learning represent an important expansion of the quantitative investors' analytical toolkit, providing substantial new flexibility.

Australia has enjoyed nearly three decades of uninterrupted economic growth, but there are sound reasons to question whether this will continue in the future. Five core shifts – industry, urban, energy, land and culture – are needed for Australia to reach its full potential.

To succeed within the ever-shifting context in which investment decisions are made, investors should adopt a multi-lens approach. Context matters, and siloed thinking can be detrimental.

There are three negative supply shocks that could trigger a global recession by 2020. None of them are amenable to the traditional tools of countercyclical macroeconomic policy.

Many economists argue that resolving US-China trade tensions is the best way to avoid significant global economic and financial disruption. Yet, while necessary, this would be far from sufficient.

A disciplined, scenarios-based approach to determining your views on the outlook for markets is vital for building 20/20 portfolios. Determining investment strategy by analysing issues from a number of viewpoints allows you to arrive at plausible scenarios for how the future may unfold.

As life expectancies improved, the "Financial Independence, Retire Early" movement was born. But a very long time in "retirement" requires more flexible spending rules.

Crypto land has become an unregulated casino where unchecked criminality runs riot. It is high time that law-enforcement agencies stepped in.

What strategy should a rational investor, completely free of constraints, take to preserve wealth while making modest long-term gains? To do so will not be easy over the next two decades.

Two recent research papers explore the impact of investors' increasing appetite for environmentally responsible investments.

There is nothing unusual in a US President having a penchant for spin. But it won't be nearly as easy to spin the consequences of the flaws with Trump's economic policy.

The growing proportion and influence of older workers in the labour force will provide support for the equity market going forward.

Portfolio construction is multi-faceted and should be iterative. Five key components provide a framework to design quality portfolios to meet clients' objectives.

Facebook’s crypto-currency aims to function as private money anywhere on the planet. Given the massive risks, governments must step in and stop it before it launches.

Research finds that SRI funds perform as well as conventional funds, ESG equity investing has outperformed in the US, and controversial stocks do best in crises.

The critics of QE are right to warn of unintended consequences. But shunning QE may also have unintended consequences. The critics should be careful what they wish for.

Retirement bucket strategies tie specific expenses to specific portfolios. But looking at categories of spending doesn't necessarily work. A better approach is to segment spending within each category.

Investment grade debt has become much riskier, default rates will rise when interest rates begin the inevitable normalisation, and credit spreads are too low – it’s a bubble waiting to burst. Actually, no.

If you believe the UK is turning into populist Zimbabwe or Venezuela, you should expect a no-deal Brexit. Otherwise, forget about it.

A new study shows that retirement savers demonstrate a strong preference for trusted managed fund brands over unbranded funds - but unbranded funds are strongly favoured over poorly trusted fund brands.

The Federal Reserve is contemplating changing its framework for targeting inflation. It should conclude that the FOMC needs more patience with the current neutral stance rather than a new target.

The inflation outlook is subject to far wider possibilities than policymakers have considered. Too little focus on structural factors could pose serious risks to economic wellbeing and financial stability.

The definition of the "alternative investment" asset class is one of the most debated and important. What is your philosophy?

A carbon tax - while immensely popular among economists - imposes the same cost on the rich and poor. A carbon dividend would be a smart step that wouldn’t invite a yellow vest reaction.

Five misplaced concerns about the future of the dollar make forecasts of a long-run collapse in the dollar problematic.

Climate change has moved faster than most thought possible. There will be exciting investment opportunities in companies focused on climate change mitigation and adaptation.

Retirement village contracts have their pros and cons. The contracts are really a type of complex insurance or financial product. Comparison shopping is very difficult but possible.

A recent paper looks at the impact of passive investing on market stability; a second describes shades of alpha for active and index investing. A third reviews luck and portfolio rebalancing outcomes.

Rather than worrying about whether portfolios are actively or passively managed, investors should focus on strategic asset allocation. The tired active-passive investment debate has run its course.

The long boom in Australian residential property prices seems to have finally ended. Further falls to come will cause the Australian economy to slow but will not cause a recession.

If a final US-China trade deal prevents China from gaining greater monetary-policy autonomy, it could create major problems when the next big Asian recession hits.

With Wall Street hitting all-time highs and the US economy certain to set a record in June, the question is whether this is a resumption of the bull market or only a temporary bounce.

These are my key takeouts from Markets Summit 2019's Faculty of investment thinkers from around the world offering their high conviction ideas on the drivers of and outlook for the markets.

China is frequently presented as a source of crisis or instability for the global economy. However, the picture is one of imperfection, not peril.

Yes, the days of 10% Chinese growth are over. That was inevitable. But there are five key reasons to dismiss the now-widespread diagnosis that China is ensnared in the middle-income trap.

Most of us use funds in clients' portfolios. Three new research papers look at what differentiates fund managers, highlighting factors we probably never considered important.

Compared to physical risks, investors have a much greater ability to incorporate carbon and related pollution regulations into investment decisions.

The US Federal Reserve surprised markets recently with a large and unexpected policy change. The new normal will be a US policy rate close to or just below 3%.

My key takeout was that perhaps markets entered an inflection point through 2018 and, accordingly (if they haven't already), investors need to think about how they position portfolios.

The idea that imputation refunds are an unfair, expensive rort is gaining acceptance in the community. The Labor proposal is not fair, nor much of a revenue earner. It's not even nuts. It is just wrong.

The arguments of supporters of Modern Monetary Theory have a grain of truth, but also rest on some fundamental misconceptions and have unpredictable, potentially serious consequences.

For the first time in a decade, bonds can compete against equities on returns. High quality, investment grade corporate bonds can deliver mid-single digit returns for a third of the volatility of equities.

Climate change is affecting countries, companies, assets and communities in a variety of ways. Good stewardship of client assets requires investors to consider these issues.

There may be enough positive factors to make this a relatively decent - albeit mediocre - year for the global economy. But a global growth-stall and sharp market downturn could come in 2020.

Two recent papers provide timely insights on the market impact of behaviour that is detrimental to corporate reputation, and the impact of ever-growing passive investing on behaviour within organisations.

Only by making the effort to understand and align investment beliefs with values can we get a sharper understanding of our clients' true objectives and provide solutions that will really meet their needs.

More than one third of Australians think there is widespread corruption in the banking and finance sector.

The subtle channels can be so powerful that they communicate information without us knowing it. Body Linguistics, EQ and awareness are the keys to understanding others.

Practitioners need to know what words to use and lose - and be able to apply that knowledge - to improve their conversations with clients about fees, regulations and investment strategies.

A myriad of factors - psychological, emotional, cognitive and behavioural - impact a client’s financial independence during decumulation, demanding different investment solutions.

Individuals live as part of a broader system of interconnected networks and relationships. There are advantages - for you and for them - in thinking about the client as part of a family dynamic.

There is scientific consensus that five major personality traits explain much of the behavioural differences between individuals - linking to financial outcomes, and preferences for advice.

Helping clients is about more than just educating them as to the right decision, it's also about helping them to actually take action.

The way investors respond to the language of financial services can be influenced by using the right words, avoiding others, and structuring messages to overcome skepticism.

This panel, which considered key takeouts from Finology Summit 2019, commenced with an overview of a 2018 global study on how well financial advisers know their clients.

Behavioral diagnostics represent the cutting edge in understanding clients, detecting what clients reveal about themselves through their decisions.

Helping clients is about more than just educating them as to the right decision, it's also about helping them to actually take action.

It is time to align client portfolios with risks they face - requiring a deep understanding and evidence-based approach to uncovering and forecasting client goals.

Persistent earnings revisions ultimately drive share price performance. Understanding and capturing this predictable pattern enhances portfolio returns.

There is evidence to suggest that biases lead to behaviours that can negatively impact Australian investor portfolios.

The complexity of multiple and often conflicting investment objectives is matched by an increased desire to simplify - giving way to some dangerous misinformation.

Stars are celebrated yet funds management is a team pursuit. Behavioural finance tends to focus on individuals' biases, but teams' behaviour determines results.

Emerging markets are full of undiscovered opportunities and hope. Assuming failure may seem a counter-intuitive way to invest, but it is an effective way to avoid behavioural biases.

Every financial adviser has access to the same products and portfolios – we must differentiate our advice value and specialisation, innovate new business models, and focus on the client experience.

We must fully understand a fund’s performance to achieve best practice portfolio construction and recommend client solutions that truly reflect their investment beliefs and avoid unwanted biases.

Helping clients is about more than just educating them as to the right decision, it's also about helping them to actually take action.

The Big Five personality traits offer insights into the behavioural headwinds (or tailwinds) clients might encounter in achieving their financial goals, and the most effective way of dispensing advice to them.

Human beliefs, biases and behaviours are central to the behaviour of financial markets, causing financial and economic instability to persist.

Hamish Douglass, Andrew Canobi, Brett Gillespie, Tim Farrelly, Charles Jamieson, Peter Kim, Stephen Miller, AJ Qualtieri, Randal Jenneke, and Thomas Vester convened to debate their Markets Summit 2019 key takeouts and the portfolio construction implications.

Few clients have the 20-year horizon required for today’s strategically-oriented models to become consistent with suggested outcomes, such as CPI+4%. This builds in a structural mismatch.

Investors are so focused on predicting the end of this economic cycle they have missed the fact that it simply won't. A recession will be avoided and the cycle will extend.

It’s a Quantitative Tightening world and the tide is receding. QT appears set to continue in 2019 and bonds should continue to perform well.

Banks are a defensive fixed income investment. This may sound counterintuitive only a decade removed from the most prolific financial crisis of our lifetime.

Nearly a decade after one of the great debt binges of all time, Chinese economic growth and credit creation have slowed. Today, stimulus is being undertaken. This is not a crisis, this is reform.

As recessionary pressures continue to build, rotating portfolios toward high grade, defensive assets will prove to be a prescient asset allocation decision for investors.

The vast majority of emerging market economies are fundamentally healthy and are being driven by broad thematics, not just evolving consumption patterns.

While infrastructure is known as a defensive asset class, it is set for enormous growth over coming decades, making it an attractive investment proposition for years to come.

Recent central bank decisions have strengthened the conviction that the New Neutral is a global reality which will have long-term implications on investment decisions.

Global high yield corporate bonds represent an attractive asset class for investors searching for a diversified source of income.

Easy money in credit markets is gone, and corporate bonds face more risk for less return. Structural liquidity deterioration raises a black swan risk of a disorderly sell-off spilling into other markets.

The best chance for survival among what were regarded as the most defensive of stocks is to be the biggest, most revered brand – or at least hold second spot. Others will struggle and many will disappear.

The new normal is a world of higher systemic risk, which implies portfolio managers will need to dig more deeply into their tool kit of risk-understanding and mitigation techniques.

Returns in emerging market equities have been disappointing in recent years. But the stark rise of populism in the western world may actually present an opportunity for many emerging economies.

Slowing growth with extreme recession risk, coupled with a combative populist government, may well see Italy trigger a crisis in European debt and the currency, causing a substantial global volatility event.

Rates are normalising, populism is on the rise, technology is driving disruption. But not every perceived winner will win and not every perceived loser will be destroyed forever.

On some measures, global equity valuations are the most attractive in several years. Risks, however, have certainly increased and in many cases are more difficult to frame.

For most of the last 10 years, the world's major central banks have been creating significant amounts of cheap money, inflating several bubbles. Those bubbles are beginning to burst.

Drawing on his unique background as part of the elite leadership team of the CIA's Clandestine Service, David shares his views and analysis of the current geopolitical landscape.

Much macroeconomic analysis is very narrow in scope. ESG factors are ignored all together. A new indicator of national progress measures economic dynamism and progress on meeting ESG goals.

Two of the defining characteristics of the global investment landscape over the last 30 years are being reversed - globalisation (by economic nationalism) and finalisation (as we've reached peak debt).

The former head of the Australian Stock Exchange recommends that dividend imputation should be abolished?

Yes, it’s possible that we enter a recession in the not too distant future. But the best curve to forecast recessions still has a positive slope.

For most of the past decade, the growing spending power of China’s expanding middle class has fueled the global economy. Not so anymore.

Australian investors have a different perspective on foreign currency to investors elsewhere in the world, and this should be reflected in how local portfolios are built.

We see three scenarios for 2019 - is it a benign outlook like 2016? A bubble bursting like 2000? Or will inflation accelerate?

Over the course of this year and next, the biggest economic risks will emerge in those areas where investors think recent patterns are unlikely to change.

Cyclical volatility in earnings has increased dramatically since the 1980s. The recent Apple profit warning is an excellent case in point.