The Forum team recently said a sad goodbye to our beloved sausage dog, Schnitzel von Krumm. He was well known to those who attended our live programs or visited our office over the past decade. The team has put together this montage of a few memories...
Given increasing longevity, it's important that retirees not ignore strategies that can generate long-term capital growth. In short, retirees need to re-examine the role of equities in their portfolio.
Mid this year, ASIC concluded its enquiry into allegations of wrongdoing and criminal behaviour at IOOF, related mainly to the research team and its then head. The real "scandal" turned out to be about reckless and biased elements of the media (and politicians).
A growing body of research on the actual spending habits of retirees finds spending declines over time, implying retirees may not need to be saving as much to retire.
Growing US scepticism on international free-trade and defence agreements is rational in an unstable world, according to US geopolitical forecaster and author, George Friedman.
Does our character manifest itself in our investing decisions? This Resources Kit presents 10 key research papers, presentations and opinion pieces around what determines values, how values impact ethics and behaviour, and the relationship to trust.
I wonder whether this post-Trump market rally and associated bullish economic and market narrative will come to be seen as one of the more prominent historical examples of poorly timed and lazy market groupthink.
Variable withdrawal strategies for retirement spending are receiving more attention. Optimal asset allocations for such strategies are quite different to rules of thumb based on fixed withdrawal strategies.
The IMF is right to warn that populism poses a serious threat to the global economy. What is really worrying is It is no longer only populists of Donald Trump's ilk who are delivering it. Mainstream politicians increasingly sound populist too.
Only 1 in 10 listed companies globally achieved sustainable, profitable growth over the decade. A disproportionate number had a founder still running the firm or who remains on the Board.
Perhaps the best way to manage sequence of return risk in the years leading up to retirement and thereafter is simply to build up and then use a reserve of bonds to weather the storm.
Broad analysis of generally effective indicators of US recessions leads to the conclusion that recession risks in the US are clearly continuing to rise. A wide range of indicators confirm the message although some doubts remain.
The gravest geopolitical challenge is not terrorism, or the Middle East, or Brexit, but a possible eruption between China and the US, the world's two largest economies and militaries. It is always when the most powerful countries clash that the world is altered fundamentally.
Predicting the future raises a significant number of issues when creating an investment plan. Monte Carlo simulations will illuminate the nature of that uncertainty, but only if those using them understand how it should be applied – and its limitations.
The lack of response at the zero bound of policy interest rates is hardly surprising. In fact, it is strikingly reminiscent of the so-called liquidity trap of the 1930s. What is particularly disconcerting is that central bankers remain largely in denial.
Conference 2016 featured a stellar lineup of international and local experts offering their best high conviction idea/thesis around the the friction between short-term and long-term investing imperatives - and the portfolio construction decisions that must be made.
Passive investment has flourished since the GFC but we are entering a new environment where active management will thrive. The opportunity for practitioners to add value has gone up significantly.
Data overfitting is a well known problem and one would expect clever statisticians and scientists not to succumb to its temptations. But "meta-overfitting" may be endemic in finance.
Managing the fundamental friction between short-term and long-term investing imperatives is a key challenge when building portfolios. This Backgrounder explores some of the key concepts and debates.
The listed infrastructure market provides investors with a broad, deep and liquid range of infrastructure investment opportunities.
A range of cognitive biases leads investors to generally overestimate their skill. A long-term investment strategy simply compounds this problem. A long-short investment structure can improve outcomes.
Despite interest rates being at historic lows, there are thousands of dividend income opportunities amongst global companies that can provide income for a desirable retirement lifestyle.
The infrastructure asset class, when defined in a disciplined manner, generates reliable earnings - and for the foreseeable future, earnings of infrastructure assets should continue to be reliable.
As the Australian bond market grows and sub-sectors emerge, investor must ask – is my defensive allocation true-to-label?
Maintaining a solid level of income for the retiree must remain at the forefront of thinking and a move up the risk spectrum into equities provides a solution.
Critics charge that liquid alternative funds may not provide exposure to quality hedge fund managers and exhibit lower performance potential. This paper examines those concerns.
In portfolios with international exposure, there are times when currency returns dominate overall performance. This paper analyses the currency hedge decision from the perspective of an Australian investor with international exposure.
The world of investing and business has seen a great deal of change in the past 30 years. Investors face a slew of psychological challenges. Here are the 10 attributes I believe to be the hallmark of a great investor.
Since the birth of the modern stock market in 1602, investment culture has moved from a return focus to a risk focus, and back. What can investors in the 21st century learn from four centuries of investment history?
Research suggests that we have remarkably little insight into our future preferences. So a challenge of goals-based investing is that we save towards a goal that isn't what we want when the time comes.
Considering structural and cyclical drivers can help reveal investment opportunities, if an appropriate timeframe is defined. A two- to three-year period is an under researched view.
How long is it since Australia had a recession? Most would say 26 years. A world record. By looking at the data a little differently, we may not be so sure that Australia has gone 26 years without a hiccup.
What are the investment implications of a potential Trump presidency? In the short term, we think it could be positive for equities and negative for bonds, but negative for US equities in the medium term.
While seemingly elegant in theory, globalisation suffers in practice. That is the lesson of Brexit and of the rise of Donald Trump. Those who worship at the altar of free trade – including me – must come to grips with this glaring disconnect.
New research has found that teams of three portfolio managers deliver higher gains, adjusted for risk, than funds managed by a single individual or by teams of other sizes.
The "best" retirement income strategy may be very different depending on whether you measure based on wealth, spending, probabilities of success, magnitudes of failure, or utility functions that weigh both the upside and downside risks.
As the battle for the White House heats up, candidates are drawing attention to the challenges facing the nation. But whatever the outcome of the upcoming US Presidential election, we believe the impact on markets will be about the same.
The Brexit referendum is a major break in the 70 years of European integration. What's next for the UK? Who is next to exit? What does this mean for broader global stability? And - most importantly - what are investment implications?
The next bear market will come like the proverbial 'thief in the night' and none of us can predict the hour or day. Preparing clients for bearish times may be more important than portfolio design. But how?
Since winning independence from South Africa in 1990, this country of 2.4 million people has achieved enormous gains, especially in the last couple of years.
The current investment environment is arguably one of the toughest ever in which to build portfolios that deliver return and are robust into the future. There are a range of approaches that can be taken.
"Africa rising" has been a catchphrase since the beginning of this century. It is the idea that Africa, and especially Sub-Saharan Africa, could be to the 21st century what South-East Asia was to the second half of the 20th century.
Many have spoken of the significant risks funds carry with Australian equities exposures. So I thought I'd check the evidence on the influence of equities on multi-asset portfolios.
Economists and investors risk being blindsided by a global upswing that is already underway, financial historian Professor Niall Ferguson explained at PortfolioConstruction Forum Symposium 2016.
Symposium facilitates featured a stellar line up of 20 international and local experts - including special guest keynote, Professor Niall Ferguson, PhD, internationally renowned economic and financial historian - offering their expert, high conviction ideas to help build better quality investor portfolios.
Most economists continue to view the economic future as more rosy (if their forecasts of economic acceleration are any guide) while the Fed is implicitly saying the same by raising rates and forecasting further rate rises. But there are three main reasons caution.
More than ever, investors need to filter out the noise and consider the geo-political developments which are shaping the world.
Markets are focused on the economic cycle as an indicator of central bank actions. But inflation should be the most important macro indicator on the radar of investors.
George Soros may be wrong about global deflation for four reasons. But if Trump wins the Republican nomination and then the presidency, all bets will be off.
Retirement income planning is a relatively new field that differs from traditional wealth accumulation. Eight key ideas serve as a manifesto for my approach to retirement income planning.
Retirees and their pensions are being sacrificed for what now passes as "the greater good." ZIRP has created a massive problem for retirement savers and pension fund managers. NIRP will make their problem worse.
One might argue that Australia's high dividend yield, currently lower PE Ratio and generally smaller companies means the Australian equity market behaves like a global small cap with a value style tilt. Is that true?
In the last 10 years, many companies from emerging economies have closed the corporate governance gap relative to their developed market counterparts. Such companies find themselves in a sweet spot.
Among the many challenges facing the EU - refugees, populist politics, German-inspired austerity, government bankruptcy in Greece and perhaps Portugal - one crisis is well on its way to resolution. Britain will not vote to leave the EU.
Markets Summit 2016 featured a stellar lineup of international and local experts offering their best high conviction idea/thesis around the Markets Summit theme - is it deja vu (all over again)? - and the resulting portfolio construction decision(s) that must be made.
In a cyclical sector like commodity, deja-vu abounds for those with a long memory. As the outlook improves, equities usually rally before commodity prices, responding to improved demand forecasts.
The extreme thirst for yield has pushed the US high yield cycle into unchartered territory. In a clear case of déjà vu (replace "subprime" for "high yield"), the cycle has reached the shakeout phase.
Often in markets, you do get the feeling that somehow we've been here before. But things are never quite the same. Looking at some examples from the past, particularly Japan, we can see what can we learn and apply to our investment decisions going forward.
Investors must make choices in an increasingly complex environment - and that complexity has substantial and varied effects on the decision to opt out of a portfolio choice.
The extreme thirst for yield has pushed the US high yield cycle into unchartered territory. In a clear case of déjà vu (replace "subprime" for "high yield"), the cycle has reached the shakeout phase. It's time to sell/short the beneficiaries.
The resources sector is unloved, under-owned, heavily shorted and facing a slow grind to re-establish equilibrium between supply and demand. This is incorporated in the prices for equities, with discounts that reflect the negative sentiment. A contrarian with a longer term approach should be getting quite excited at this point.
Research in psychology has revealed that our decisions are disrupted by an array of biases and irrationalities: Merely being aware of these shortcomings doesn’t fix the problem. The real question is: How can we do better?
Trust is weighted differently when selling intangibles like financial advice, because there is no real product to demonstrate, nothing for your buyer to grasp. There is no physical product to be trusted. So what can be done to create trust?
For all its ups and down, 2015 ended up being a year to forget for Australian investors, with little variation in the performance of major asset classes. Dynamic allocation within portfolios and additional levels of diversification will be critical for 2016 to avoid the feeling of deja-vu.
Core assets - Australian equities, global equities, and fixed income - are going to generate pretty lacklustre returns this year. Having as efficient a portfolio as possible is going to be really key to your return success.
The FSC has called for a cut in the company tax rate to 22%, funded by an increase in the GST. It's hard to see why FSC made this call, particularly given that its stated number one priority is "working to improve the well-being of all Australians".