104 results found

The impact of Covid-19 and the resulting massive worldwide government fiscal response to the crisis has sparked new discussion about the risk of an upsurge in inflation - or deflation. This is not a trivial debate.

One of the touted benefits of hedge funds is that they provide returns that are largely uncorrelated with other risky assets. In practice, hedge funds returns are highly correlated to equity markets during downturns - when it matters.

This is a time to be buying not selling. Question marks remain as to how far this market will fall before it bottoms out. But what we do know is that valuations are attractive. The chances of long-term investors earning returns well in excess of Term Deposits over the next five to 10 years are very, very high.

Behavioural biases get in the way of good investment decision-making. A well-structured approach to goals-based planning can go a long way to defeating the worst impacts of many of these biases.

Tim Farrelly | 0.25 CE

Bull market longevity tells us nothing about the timing of the next bear market. Valuations are a helpful warning, but don't inform us on the timing because the trigger is normally a shock.

This lecture instructs IMAC candidates on approaches to asset allocation (SAA, TAA, DAA), the role of strategic asset allocation and method for setting the SAA, optimisaton, pre-tax return estimates, estimating risk and correlation, and forecast estimation errors.

This lecture instructs IMAC candidates on the drivers of currencies in the short and long term and different approaches to currency risk management for portfolios.

In late May 2019, Australian 10-year bonds were at 1.64% per annum. A month on and they’d dipped under 1.3% per annum. This is quite a move.

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.

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.

Tim Farrelly | 2 comments | 0.25 CE

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

Investors are entitled to believe that the industry has standards so that they can compare like with like - but obviously that's not the case.

Potential returns on traditional assets are falling and the search is on for different sources of attractive returns. The Australian Asset Backed Loans asset class deserves a place in many portfolios.

Tim Farrelly | 1.00 CE

In the 1950s, Markowitz showed that low or negative correlation is the secret sauce that makes diversification work. While his maths stacks up, the way it is often abused, does not.

Harry Markowitz called diversification "the only free lunch in finance". But it can’t be taken for granted as not all diversification is good. The answer will often lie with good rules of thumb.

Tim Farrelly | 1 comment | 0.25 CE

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.

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.

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.

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.