As investors, we are all looking for an edge in earning outsized returns. Here I identify 3 simple portfolio management principles that are essential in any investor’s toolkit, and briefly outline how they can all be brought together into a simple cohesive strategy. Show More
On the 9th March 1987 U2 released the Joshua Tree, the fastest selling British Album of all time that went on to sell over 25 million copies. Joshua Tree is still acclaimed as one of the greatest albums of all time. Interestingly Bono considered pulling the album prior to its... Show More
In a world where market volatility and low growth are the new norm, asset allocation is more important than ever. As Tim Keegan, AMP Capital’s Head of SMSF and Self-Directed Wealth explains, “It’s more challenging than ever for SMSF investors to improve their returns just by relying on Australian equities,... Show More
Interest rates globally continue to plumb multi-decade lows, or even multi-centennial lows in the case of Bank of England. In this article, we outline some key implications of negative interest rate policy and the ‘lower for longer’ rates regime. We may be about to enter a period where bonds and... Show More
The idea that we have entered a “low return” world is now consensus. The arguments are based on a combination of fundamental macro factors (a low growth world) and extended structural valuations in equity and debt markets, suggesting significant return headwinds. Consistently achieving solid real returns in this environment will... Show More
“Real estate is always good as far as I’m concerned.” – Donald Trump Show More
One thing Brexit has done is remind us about the inherent vulnerability of financial markets to these sorts of shocks. Our approach is anchored to the idea that the ability of markets to withstand these shocks is a function of valuations (cheap assets are in a much better position than... Show More
While markets have in many cases recovered from their Brexit jitters, we are remaining cautious. There is still significant uncertainty surrounding the consequences and timeframe of the eventual exit of Britain from the EU. Likewise, we are skeptical of the sustainability of the recovery in risk assets which seems in... Show More
We have argued for some time that central bank policies – while perhaps necessary from a political and mandate perspective – have been a pervasive force in distorting both asset prices and risk. It is possible (indeed probable) that the limits of this distortion are being tested. That is arguably... Show More
Speaking at a news conference after the Federal Open Market Committee meeting, US Federal Reserve Chairwoman Janet Yellen stated that ‘helicopter money’ could be considered under certain conditions. In Japan, with currency intervention effectively off the table for fear of accusations of being a currency manipulator, there is increasing speculation... Show More
The lack of clear direction in risk assets reflects several factors. Firstly, the global economy is both a negative and a positive. On the negative side – while the major economies are growing, growth rates are moderate, downside risks elevated and the lack of upward momentum means constrained corporate revenues... Show More
Al Clark, Nikko Asset Management's Global Head of Multi-Asset discusses why he sees further rebalancing ahead in 2016. He explores what he calls ‘the Equity Paradox’ – despite earnings growth being poor, equities keep pushing higher on the back of central bank policy. In addition, he covers the increasing importance... Show More
As investors we need to be alert to the fact that environments can and do change rapidly. It is possible that we could move from a low to a high return world very quickly. In part as a consequence of the prevailing concerns around the low return environment, there is... Show More
The prevailing and overwhelming consensus is that we are in a “low return” world. After all, with negative bond yields prevailing in many parts of the globe and extended structural valuations evident in key equity markets, it is empirically difficult to see how many markets could deliver decent size, positive... Show More
The first 3 months of 2016 were characterised by heightened volatility across asset markets with sharp falls in risk asset prices in January and early February which reversed in late February and March. Likewise, bond yields declined sharply as risk assets fell before stabilising / rising in conjunction with the... Show More
The New Year is typically celebrated with fireworks – the major cities all trying to outdo each other with both colour and impact. It was a seemingly similar start to 2016 for the major markets. Shares slumped across the globe, credit spreads widened, the oil price collapsed and bonds rallied... Show More
2015 was a forgettable year for investors. Returns across most major asset classes were flat, with the exception of a few significantly negative ones. These paltry returns were not a surprise — we had expected 2015 to be a rebalancing year as global markets came to terms with the destabilising... Show More
We enter 2016 faced with familiar challenges to 2015. While returns have been anaemic, increased volatility has not been sufficient to reset prospective returns to levels that would make us interested in deploying cash and taking more risk. In short, our return expectations for the major asset classes are not... Show More
A key differentiator this year when compared to 2013 and 2014 has been the growing bifurcation between the winning and losing assets. While 2013 could be broadly categorised as a year where most assets did well, 2014 was somewhat more discriminating but on balance a good year for most investors.... Show More
The last 3 months have been a rollercoaster ride. Anyone who’d slept through this period would be forgiven for thinking “what was all the fuss about”? Having seen markets rebound (US equities in particular) we have again cut our risk position, this time through buying protection against renewed volatility in... Show More