Key officials at the US Federal Reserve have finally acknowledged that they mischaracterised an inflationary surge that has proven larger and more persistent than they expected. The Fed must now follow up by doing two things quickly.
The 17 Sustainable Development Goals (SDGs) are vitally important to building a better world for all humanity. Using an SDG framework reduces portfolio risk while making a positive SDG impact.
The mind-set that works so well when people are building their nest egg for retirement can damage their quality of life in retirement. We help clients accumulate responsibly - we can help them decumulate responsibly, too.
When markets are exuberant, it is difficult to see - let alone act - against the hubris. When markets are down in the dumps, it is difficult to see past the misery. A reductive macro-economic framework may help.
Australian cash rates will stay low for decades. Low interest rates mean high asset prices, which means much lower returns ahead. Our client communications must be in tune with this new environment.
Uncertainty around the inflation outlook is at an extreme – yet a view on inflation is a critical input to building portfolios capable of achieving client goals out into the future.
Infrastructure plays a key role in the move towards decarbonisation and net-zero emissions. Government policy support and the unprecedented amount of capital required to achieve these targets should change how you think about investing in infrastructure.
Practitioner education focuses heavily on developing technical investment skills, often to the detriment of knowledge and skills that enable better engagement and understanding of the most important aspect of any portfolio – the client!
Investors should consider the real-world impact of their investments and build portfolios aligned with the UN Sustainable Development Goals as a means to building clients' wealth, and improving well-being.
Investors should view long biased, long short equity as a core solution, dedicating a meaningful slice to portfolios, rather than being constrained by traditional equity/debt buckets.
With the individual, business and economic benefits on offer from a more ethical Australia, the business case for change is a sound one. Strengthening ethics is simply a must for a better future.
Activist short sellers have received increasing attention - and notoriety - in recent years. This paper adopts the lens of narrative economics to reveal useful insights into the dynamics of activist short selling.
A large and growing body of commentators is warning about the very real possibility - if not outright likelihood - of policymakers unwittingly letting the inflation genie out of the bottle.
Global financial markets have been reacting to the Covid-19 pandemic since early 2020, providing a unique opportunity for researchers to examine the impact of a global pandemic on uncertainty, investor reactions, and stock prices.
High allocations to alternatives are often justified on the basis of return and diversification advantages. Two recent papers show that with private equity and hedge fund, it's the managers who are the real winners.
Value investing proved to be successful strategy for nearly a century, before experiencing one of its worst performance periods in the last few years. These two papers examine whether implementation or low interest rates are the culprit.
While the retirement income system is designed to accommodate all individuals, the real test is its adequacy for the poor. These two papers address this issue for both Australia and the US.
Emotions are an important influence on financial decision-making and investing. These three papers explore how emotional regulation strategies influence decision-making under risk and uncertainty, and the link to financial success.
Charles Goodhart, perhaps Britain's most distinguished economic commentator, has just co-authored a book arguing that longer-term inflation will be much higher than the past 35 years. The reason for his view is highly unorthodox - and, in our opinion, correct.
These two papers provide useful insights into how investors' attitudes and behaviours evolve over time, and how our beliefs are distorted if we experience positive or negative prior returns.
A generation of great international economists is passing from the scene. Richard Cooper, Robert Mundell and John Williamson each made important contributions on a variety of topics including to the ongoing debate about optimal currency arrangements.
There is a growing debate about whether the inflation that will arise over the next few months will be temporary, reflecting the sharp bounce-back from the Covid-19 recession, or persistent, reflecting both demand-pull and cost-push factors.
Even armed with objective probabilities to help decision-making, people often add their own subjective "weights". Two papers explain this "probability weighting" and how it affects investment decisions.
In a low return environment, investors just have to accept more risk in order to meet their goals? On the face of it, this seems self evident and may even have a large element of truth. But, for many, it may be a very, very poor strategy.
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...
Supply chain decision makers must continue to focus on mitigating risk in 2021, not maximising growth. Political risks outbalance opportunities.
The Investment Management Analyst Certificate (IMAC) advances investment management analyst knowledge, skill and expertise in a definitive set of competencies necessary for building and/or advising on quality multi-manager portfolios. It is both a structured post-graduate certificate course in its own right, and the Australian-based Registered Education Program for the global Certified Investment Management Analyst® (CIMA®) program.
I believe time allows signals to surface amidst the ubiquitous noise. In the spirit of Annie's "just thinking about tomorrow..." in which she pleads for us to "hang on 'til tomorrow, come what may," I present my 2021 predictions for the coming five years.
The first generation of behavioural finance described people as "irrational", fooled into cognitive and emotional errors that diminish wealth. The second generation of behavioural finance describes people as "normal" - we use shortcuts and sometimes commit errors on the way to satisfying our wants.
Finology - behavioural FINance and investor psychOLOGY - knowledge and skills substantially enhance practitioners' ability to communicate with clients and manage portfolios more effectively. This Backgrounder seeks to foster a greater understanding of and interest in finology.