1. Just how dumb are the bond markets?

    If US bond rates go higher from here, it is likely to be in response to something we don't yet know, rather than what is already out there. Markets are not nearly as dumb as many suggest.

    Tim Farrelly | 03-08-18 | 1 comment | More
  2. Does fixed income still diversify portfolio risk?

    Re-evaluate the conventional assumption that owning government bonds is inherently defensive and risk diversifying. At best, it's an expensive choice and at worst, it won't work.

    Gopi Karunakaran | 01-08-18 | More
  3. QE turns 10

    November 2018 will mark the tenth anniversary of quantitative easing - undoubtedly the boldest policy experiment in central banking modern history. There are five key lessons learned from QE.

    Stephen Roach | 31-07-18 | More
  4. Why do older Australians save?

    A recent study gives us a better understanding into the decisions made by older Australians between consumption and saving.

    David Knox | 24-07-18 | More
  5. The global economy's uncertain future

    The sustainability of global growth depends largely on the US and China. One hopes that someone close to Trump can turn him around before his policies derail the world's long-awaited recovery.

    Jim O'Neill | 23-07-18 | More
  6. Trump may kill the global recovery

    For the first time in a decade, the biggest risks are now stagflationary (slower growth and higher inflation). It would seem that the current risk-off era is here to stay.

    Nouriel Roubini | 19-07-18 | More
  7. 5 essential investment committee tools

    An Investment Committee is key to a well-constructed portfolio. Your IC's toolbox must contain the appropriate tools, making governance a key pillar of your portfolio construction process.

    Annika Bradley | 17-07-18 | More
  8. We're on the cusp of an EM crash

    For 10 years, the world chased yield - flows into emerging markets were massive. As rates rise, money will move to safer environments. It’s time to protect portfolios against major outflows from emerging markets.

    Brett Gillespie | 16-07-18 | More
  9. Geopolitics to the fore! Do nothing...

    There is quite a bit happening on the geopolitical front right now to concern markets. With all this uncertainty, the best thing to do is nothing. Sit tight and enjoy the show.

    Tim Farrelly | 09-07-18 | More
  10. When politics trumps economics

    Trump and team continue to flaunt virtually every principle of conventional economics. A trade war may well be an early skirmish in a much tougher battle, during which economics ultimately trumps Trump.

    Stephen Roach | 27-06-18 | More
  11. Undiscovered Fund: A unique way to access emerging markets

    A fundamentally driven and benchmark unaware exposure to smaller companies within the emerging markets sector, this fund represents a unique way for investors to access emerging markets.

    Zenith Investment Partners | 26-06-18 | 1.00 CE | More
  12. Passive investing - reshaping the investment landscape

    Game changer or new danger? The rise of passive funds throughout this decade is recalibrating the traditional core-satellite portfolio model.

    Amin Rajan | 26-06-18 | More
  13. Are we in a corporate debt bubble?

    Since the GFC, the value of non-financial companies' outstanding bonds has nearly tripled. While a correction seems likely, the broad shift toward bond financing is actually a welcome development.

    Susan Lund | 20-06-18 | 2 comments | More
  14. Most retirees need to eat capital

    There is often confusion about income in retirement. In most cases, some income measures won't give retirees enough to spend, resulting in a lower standard of living than they could be enjoying.

    Aaron Minney | 19-06-18 | 1 comment | More
  15. A few investment selection faux pas

    Over the years, I've seen countless portfolios. Virtually all have had a pre-defined asset allocation aligned to a risk profile. But occasionally, that's where the alignment ended.

    Michael Furey | 18-06-18 | More
  16. Can the Euro be saved?

    The euro was supposed to bring shared prosperity, which would enhance solidarity and advance the goal of European integration. In fact, it has done just the opposite, slowing growth and sowing discord.

    Joseph Stiglitz | 15-06-18 | More
  17. Research Review: Biases in recommendations

    Two recent academic papers focus on how advice provided to investors might be distorted. The first relates to the disposition effect; the second looks at the impact compensation on advice given.

    Ron Bird | 15-06-18 | 1.00 CE | More
  18. Beware Quantitative Tightening!

    Quantitative Tightening is jangling the nerves of investors around the world. It's unprecedented and so no-one knows for sure exactly how it will play out. But all the evidence points to QT being a non-event.

    Tim Farrelly | 11-06-18 | 1 comment | More
  19. farrelly's Dynamic Asset Allocation Handbook (NZ Edition)

    The quarterly Dynamic Asset Allocation is published electronically, and emailed to subscribers in early March, June, September, and December. It features farrelly's Editorial; long-term outlook for markets; Forecast in Focus; and three different approaches to Implementation...

    09-06-18 | More
  20. farrelly's Investment Strategy (NZ)

    Welcome to the farrelly's Dynamic Asset Allocation NZ subscriber-only area...

    09-06-18 | More
  21. farrelly's Investment Strategy (Australia)

    Welcome to the farrelly's Dynamic Asset Allocation Australian subscriber only area...

    09-06-18 | More
  22. farrelly's Dynamic Asset Allocation Handbook (Australian Edition)

    The farrelly's Dynamic Asset Allocation Handbook features editorial exploring investment strategy "hot topics", farrelly's long-term forecasts for asset classes, a detailed review of the long-term forecasts for an individual asset class (rotating across asset classes each quarter) and three asset allocation models to assist with implementation...

    09-06-18 | More
  23. The old allure of new money

    There are now nearly 2,000 cryptocurrencies, and millions of people worldwide are excited by them. As with past monetary innovations, a compelling story may not be enough.

    Robert J. Shiller | 31-05-18 | More
  24. Will longevity products now become attractive?

    New means test rules for pooled lifetime income products, together with development of CIPRs, have the potential to radically alter Australians' views on retirement income products.

    David Knox | 30-05-18 | More
  25. Masterclass NZ 2018 - resources

    Masterclass NZ is a post-graduate extension program focused on contemporary issues that are fundamental to building better quality portfolios. Each year, the one-day program features five research-based, active learning sessions.

    25-05-18 | More
  26. Research Review: More on momentum investing

    Eugene Fama described momentum investing as the one remaining market anomaly. A recent paper gives an explanation for it. Another shows it still offers high profits after implementation costs.

    Ron Bird | 11-05-18 | 1.00 CE | More
  27. The difference for advice in retirement

    Many baby boomers are retiring with decent super balances and need advice on spending their retirement savings appropriately. Consuming capital for a higher standard of living is, after all, what super is for!

    Aaron Minney | 09-05-18 | More
  28. Do stocks outperform Treasury bills?

    It is generally accepted that stock markets provide long-term outperformance over cash. However, a recent academic research paper reveals this is not the case for the majority of stocks since 1926.

    Nick Griffin, Munro Partners | 08-05-18 | 1.00 CE | More
  29. Donald Trump's Normal Fed

    In a presidency that has shown little regard for conventional institutional norms, how can one explain Donald Trump's completely reasonable appointments to the Federal Reserve Board?

    Kenneth Rogoff | 07-05-18 | More
  30. The true impact of a trade war

    President Trump's protectionist threats have raised the risks of a serious trade war, the first in over 80 years. It is assumed that this would materially impact US growth - but is that the case?

    Woody Brock | 04-05-18 | More
  31. The place of bonds in a low yield world

    Investors are increasingly questioning the continued relevance of bonds in their portfolios. But bonds offer enhanced diversification qualities during times of low growth, low inflation and market uncertainty.

    Dean Stewart | 03-05-18 | 0.75 CE | More
  32. From asset allocation to risk allocation

    Asset allocation is often regarded as the most important portfolio decision, with asset classes then populated by investments. But this two-step approach can an asset allocation and investment selection mismatch.

    Michael Furey | 01-05-18 | 2 comments | More
  33. Is realism trumping populism?

    Around the world, populist economic policy seems to be in retreat. Even in Britain, a majority support a “meaningful vote” on whether the final deal with Europe is genuinely better than staying in the EU.

    Anatole Kaletsky | 30-04-18 | 3 comments | More
  34. Markets aren't pricing rates to revert to the old normal

    That's the view that Guy Debelle, Deputy Governor of the RBA, outlined in a recent speech. It's a timely warning - but what do we do with it? I think it depends on your investment time horizon, as do so many investment decisions.

    Tim Farrelly | 27-04-18 | More
  35. Policy blunders and currencies

    Nearly all recent initiatives of the Trump administration will prove to be macroeconomic blunders. The time has come to upgrade the credit quality of investment portfolios and to focus on the currencies of creditor countries.

    Robert Gay | 20-04-18 | 0.50 CE | More
  36. The misunderstanding of life expectancies

    As we consider the life expectancy of many clients, we should not be using any number in the 80s. A figure closer to 95 is both more realistic and provides a little buffer in case the individual lives longer than the average.

    David Knox | 18-04-18 | More
  37. Understanding how people spend their money in retirement

    A retiree's spending will change over time. However, changes in spending profile over time are often ignored when it comes to retirement income planning.

    Aaron Minney | 12-04-18 | 2 comments | More
  38. The global trade game

    The US/China trade confrontation is heating up and market analysts are scrambling to figure out what will come next. It's tempting to rely on historical experience but history is likely to be a poor guide.

    Mohamed El-Erian | 10-04-18 | More
  39. Research Review: Performance, fees and active managers

    Recent research examines the performance of active bond managers, and the impact of performance fees on returns of active equity funds and private equity funds.

    Ron Bird | 09-04-18 | 1.00 CE | More
  40. Making the case for sovereign GDP-linked bonds

    The time has come for national governments around the world to start issuing their debt in a new form, linked to their countries' resources.

    Robert J. Shiller | 21-03-18 | 1 comment | More
  41. Revisiting the importance of investment returns in retirement

    About 30 years ago, Canadian researcher Don Ezra identified the ‘10/30/60’ rule - in retirement, 10% of income comes from contributions, 30% from earnings on investments before retirement, and 60% from investment earnings accrued after retirement. Does this rule still apply in Australia, given our current economic conditions?

    David Knox | 19-03-18 | 2 comments | More
  42. Diversification - what it is and is not

    The concept of diversification may seem to be second nature. However, some of its fundamentals are often misused and sometimes misrepresented.

    Michael Furey | 15-03-18 | 3 comments | More
  43. Economists vs scientists on long-term growth

    Neither policymakers nor markets should bet on the past decade's slow growth carrying over to the next. The best bet is that AI and other technologies will have a much larger impact on growth than up to now.

    Kenneth Rogoff | 12-03-18 | More
  44. The blockchain pipe dream

    It is high time to end the hype. Bitcoin is a slow, energy-inefficient dinosaur. Most of the coins are little different from railway stocks in the 1840s, which went bust when that bubble – like most bubbles – burst.

    Nouriel Roubini | 06-03-18 | 1 comment | More
  45. Beware the Bond-cano!

    The peddlers of the Bond-cano narrative give very different recommendations. Even if we buy the story, it's just not clear what to do - all of which suggests that it is just a wonderful narrative.

    Tim Farrelly | 05-03-18 | More
  46. Rational irrational exuberance?

    In my opinion, the asset-price volatility we have been seeing has little or nothing to do with changes in fundamentals. And the widespread use of machine-driven trading is likely making all of this worse.

    Andrés Velasco | 02-03-18 | More
  47. Working toward the next economic paradigm

    It should come as no surprise that enthusiasm for economic and financial globalisation has faltered. Building consensus around a revised unifying paradigm will not be easy.

    Mohamed El-Erian | 01-03-18 | More
  48. Research Review: Everything you need to know and a bit more

    In nine pages, this paper says all that needs to be said on the ability of any of us to estimate the true value of financial assets. The next two papers produce conflicting findings on the impact of index investing on markets.

    Ron Bird | 28-02-18 | 1.00 CE | More
  49. Comments on financial market turbulence

    Was the recent market volatility predictable? Was the volatility exogenous or endogenous in nature? What lies ahead as regards inflation and interest rates?

    Woody Brock | 22-02-18 | More
  50. Unwinding the great QE carry trade

    Let's be absolutely clear - the recent plunge in equity markets has almost nothing to do with inflation or a changing of the guard at the Fed.

    Robert Gay | 15-02-18 | More
  51. Is the stock market loaded for bear?

    We are moving ever closer to the date when payment for today's recovery will fall due. Recent capital market gyrations suggest that awareness of the inevitable reckoning is already beginning to dawn.

    Dambisa Moyo | 12-02-18 | More
  52. The next 30 years

    There are themes and stocks that last for decades. Whether the investment horizon is three to five years, 10 years or even 30 years, it is likely investors will benefit from thinking about the universe of themes and stocks for generations to come.

    Bo Knudsen | 08-02-18 | More
  53. Backgrounder: Finology

    Finology knowledge and skills will substantially enhances practitioners' ability to communicate with clients, and to manage portfolios more effectively. This Backgrounder seeks to foster greater understanding and interest in the field of Finology.

    Portfolio Construction Forum | 08-02-18 | More
  54. What cyborg chess can teach us about the future of financial planning

    Despite the view that computers will come to dominate certain areas within financial planning, the reality is that there are still ways that computer-human duos can be more effective than computers or humans alone.

    Michael Kitces | 08-02-18 | More
  55. Finology and finding the higher purpose

    While economics studies how humans allocate scarce resources, and psychology studies the human mind and behavior, there is a gap at the intersection between the two – an emerging new body of knowledge dubbed, "Finology".

    Michael Kitces | 08-02-18 | More
  56. The blind assumption of unendingly low rates is dangerous

    The general uptrend in the broader equity market seems set to continue given economic data globally remains robust and central banks very accommodating. Given divergent risks, investors should focus more than ever on uncovering sources of idiosyncratic alpha, rather than relying on momentum or passive beta.

    Antipodes Partners | 07-02-18 | More
  57. Things break

    Every generation or so, things (in the economics world) break. We're probably at or close to one of those once-in-a-generation moments. Watching monetary indicators is key.

    Chris Watling | 07-02-18 | More
  58. The impact of technology on economic growth

    There are five areas where the early effects of technological change on the world economy are believed to be investible today.

    JP Morgan Asset Management | 05-02-18 | More
  59. Giddy markets and grim politics

    Headlines seeming to portend political instability and chaos have not prevented stock markets from soaring. What gives?

    Kenneth Rogoff | 19-01-18 | More
  60. Research Review: More insights into fund managers

    The holy grail is to find active managers who can add value. The combined insights of these two papers suggest avoiding large managed funds, especially those under the control of managers who run a concurrent SMA.

    Ron Bird | 19-01-18 | 1.00 CE | More
  61. 10 "fearless" predictions for 2018

    It is the time of the year when those in the forecasting business like to lay out our expectations for the coming year. Here are mine...

    Tim Farrelly | 18-01-18 | More
  62. Income layering: What? Why? When? & How?

    Income layering is a goals-based approach to building an investment portfolio that is likely to be beneficial to a wide range of retirees - especially those worried about how to sustain spending in the later stages of retirement.

    Aaron Minney | 10-01-18 | More