This lecture instructs IMAC candidates on the principles of equity securities and analysis including: fundamental investing and analysis; industry analysis; corporate analysis; quantitative investing; momentum investing; value/contrarian investing; and, technical analysis.
This lecture instructs IMAC candidates on properties of debt markets, the investment features and risks of bonds, the application of the time value of money to the valuation of bonds, and the concepts of duration and convexity and their application to bond portfolio management.
This lecture instructs IMAC candidates on the accurate and meaningful measurement and assessment of investment portfolio performance, specifically performance measurement and attribution.
This lecture instructs IMAC candidates on how to make decisions about a portfolio's market and currency exposure, and to determine the impact of those decisions on portfolio performance. To various extents, these topics are considered in other IMAC lectures (currency management, asset allocation, performance measurement) and hence this lecture fills the gaps.
This lecture instructs IMAC candidates on: the primary roles of derivatives in investment portfolios; the difference between futures and forwards contracts and options; the risk and return characteristics of options; risk management strategies using derivatives; return enhancement strategies using derivatives; and, option pricing.
This lecture instructs IMAC candidates on: the multifactor approach to portfolio risk management; sources of risk that may be identified and managed within a portfolio; how risk may be managed using futures and options; Value-at-Risk as a measure of portfolio downside risk; Risk budgeting and Value-at-Risk; and how risk may be decomposed using value-at-risk to measure a portfolio’s overall risk.
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.
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.
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...
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...
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.
Although influenced by logical factors, changes in investment markets are often irrational and illogical. A whole-brain approach to seeking alpha is necessary to win in the investment game.
Artificial Intelligence, Machine Learning (ML), and Deep Learning represent an important expansion of the quantitative investors' analytical toolkit, providing substantial new flexibility.
Investors want it all from alternatives - keep up with equities in bull markets, and give insurance when markets fall. But true diversification adds independent sources of return to portfolios.
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.
An antidote for a low-rate environment is investing in companies enjoying the benefits of mega-trends, global shifts that are likely to boost demand for the products of a firm over the long term.
Value investing has proven successful over time but it requires discipline and a long-run horizon - and disagreement remains over whether the value premium will persist. What's your philosophy?
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.
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.
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.
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.
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.
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.
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.
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.
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.
Global high yield corporate bonds represent an attractive asset class for investors searching for a diversified source of income.
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.
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 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.
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.