OUR PERSPECTIVES


Our Perspectives

Speculator or Investor?

Most of the people who come to us for advice consider themselves investors, not speculators. The difference is of course open to interpretation and worth exploring. The dictionary defines speculation as “the forming of a theory or conjecture without firm evidence”. Sound familiar? This is indeed how many investors commonly make decisions. That is, by…

Latest Amendments to the Government’s Superannuation Reforms

Since the Federal Budget on 3 May 2016, many superannuation strategies have carried a significant element of uncertainty. As you may have heard last week, the Government has announced some significant changes to the superannuation proposals previously announced on Budget night. It’s important to be aware that we still don’t have any legislation released on…

Brexit

We must confess we hadn’t planned to write about the UK. Like most, we had expected that sanity would prevail at the 11th hour given countries rarely commit economic suicide. However as at Saturday afternoon the “Brexit” vote has won the day, Cameron has resigned, and most of the World (including the UK) is wondering what it…

Short-Termism

In the realm of politics, short-termism is a constant. To start with our terms of government are too short, and our politicians seem to increasingly make decisions based on current polling. Surely their elected role is to broadly consider the best long term strategic options for the country and then make the tough decisions (even…

It will fluctuate

This response to the posed question “What will the stock market do?” is generally attributed to either J.P Morgan or J.D Rockefeller. Who actually said it, and to whom, is of little import. Far more usefully, it is an axiom that one should keep in mind during periods of enhanced volatility, such as now. Current…

Resisting Temptation

Many people don’t appreciate it, but an entire industry is built around getting you to trade stocks. The earnings season just provides another trigger for people to click the ticket on your activity.     This short video describes the benefits of doing nothing, beyond your regular rebalancing.

Too Low For Zero

Nothing seems to make much sense, It’s all just Greek to me
, You know I’m too low, too low, Too low for zero. 
E. John/B. Taupin 1983   Elton John’s 1983 hit “Too low for Zero” from the album of the same name describes an exhausted gambler on a losing streak. He employs several methods in…

Avoiding herd mentality

What feels safe is often risky, and what feels risky is often safe. This statement contradicts just about every evolutionary instinct we possess. We tend to seek out safety and avoid risk whenever possible. A classic example has to be the instinct that (still) tells us we are safer staying with the group. If members…

Respect the Cycle

One of the first really valuable lessons I learned in my investment career was to respect the market cycle. One of my seniors at Macquarie Bank always used to say “the cycle lives on!” He was right of course. It was the heady days of 2006/07 when the mood amongst traders as well as “Mums…

Where Were They Going?

Anyone can see the road that they walk on is paved in gold, 
and its always summer they’ll never get cold,
 they’ll never get hungry, they’ll never get old and grey.
 You can see their shadows wandering off somewhere,
 they won’t make it home, they really don’t care.
 They wanted the highway, they’re happier there…

The Matrix

You take the blue pill, the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in Wonderland, and I show you how deep the rabbit hole goes. Morpheus to Neo, The Matrix 1999   In the story of a messiah-like protagonist set against…

The Importance of Rebalancing

An important part of a winning investment strategy is regularly rebalancing the portfolio. Rebalancing is required because the market’s movements cause the value at risk of a portfolio to drift. And as the time horizon increases, it is likely that the allocation to the riskier (and higher expected returning) assets will increase – increasing the…