Category: White Papers

I’ve often been asked by clients how I invest my own money. This often led me to ponder; how would an active fund manager answer the same question?

Market timing is one of the most alluring notions for investors. The rewards are high for those who can ‘read the tea leaves’ and get the timing right.

In the field of investment management facts and fantasy abound and it is often hard to distinguish between the two. As in many walks of life, we often hear of the successes that professional money managers achieve…

When students score top marks, they tend to put it down to their own intelligence or hard work. When they mess up, they might blame the teacher for not explaining…

The key thing to understand about buying individual stocks is that the vast majority are duds. Research has shown that, in the long run, only around four per cent of US stocks outperform Treasury Bills.

For as long as we can remember, investors, the media and most retirees have misunderstood the concepts of income and cashflow. This may seem like semantics, but the distinction is…

It is remarkable how often the names on the rich list change. I often wonder why this is so. Once a fortune has been made, retaining it, and growing it modestly through generations, should be a straightforward affair – with the right advice.

What is overconfidence bias? Constantinos Antoniou from Warwick Business School explains.

Financial scams reported to consumer and finance authorities run into billions of dollars a year worldwide, and Australia is one of the countries where scams are growing the fastest.

Most of us have no choice but to invest, at least a portion of our wealth, in equities. To fund the lifestyles we aspire to, and to ensure we have enough money to last us for the rest of our lives, we need to take that risk.

Author and fund manager Glen Arnold says there are two main drawbacks with consuming financial media. The first problem is that it encourages investors to focus too much on how their portfolio is performing.

With term deposit rates up around 4.5% or higher, it's reasonable to that investors may question the role of a bond fund in their portfolio. Given that bond funds had…

To what extent is short-term outperformance down to manager skill? The manager, of course, is likely to say it is down to skill. Similarly, when a manager underperforms, they will often blame bad luck.

“The most important quality for an investor is temperament, not intellect.” That quote from the legendary investor Warren Buffett refers to a human tendency among investors to let their own biases and impulses distract them from investing cautiously.

There’s a great deal of evidence to show that people’s attitude towards money starts to develop very early in life. So what can parents can do to help instil good habits in their children?

Nobody likes to the see the value of their portfolio fall, but bear markets are inevitable. In fact, it’s those bear markets that are the very reason why we can expect an investment return in the first place.

Most of us would like to live a long and healthy life. After all, there’s no point in working hard and investing for decades if your retirement only lasts a few years.

Carl Richards is a former adviser and an expert on spending habits. His advice is to prioritise spending on time spent with loved ones.

Investors often worry, that when a recession is officially announced, markets will respond negatively. In truth, this is rarely the case. The key thing to understand here is that markets are forward-looking.

In times of uncertainty, people look to financial advisers for answers on things they just aren’t qualified to comment on. Will markets fall further? Will there be a global recession? What…

The investor’s worst enemy, it’s been said, is likely to be himself. Regardless of whether they invest actively or passively, investors often harm their portfolios through the way they behave.

As with all industries, participants in the investment industry look to sell themselves, by advertising their own ‘secret formula’. Yet, given the complexity of financial markets and economics, these participants can use ‘poetic license’ more than most.

One of the most common misconceptions about investing is that the economy and the stock market are perfectly correlated. Yes, they are connected, but it’s not that simple. Peter Westaway is a Chief Economist at Vanguard Asset Management.

Eddie’s a longstanding friend of mine. I’ve always admired his positivity and the almost effortless way he seems to glide through life. He’s also very intelligent: he knows what he…

One story has dominated the economic news in 2022 — inflation. Around the world, prices have risen faster than forecasters were expecting, because of knock-on effects from the Covid-19 pandemic,…

It’s hard to think of a profession that’s as misunderstood by the public as financial planning. If you ask people, “What does a financial planner do?”, the answer is likely…

Financial planning is widely misunderstood. This should come as no surprise. The media regularly tells us financial planners are just commission hungry salespeople looking to sell financial products. But what…

We’re often hearing in the media about emerging industries that seem to offer exciting opportunities for investors. Right now, for instance, there’s plenty of discussion around driverless cars and 3D printing.

David Pitt-Watson is a fund industry insider. I’ve been to meet him and started by asking him the for the single most important piece of advice he’d give to ordinary investors.

Mark Minchin, Managing Partner Minchin Moore One of the ironies of investing is that although it’s actually very simple — or at least it should be simple — that doesn’t mean it’s…

Andrew Marchant, Chief Investment Officer, Minchin Moore Every bear market, the same story gets trotted out. It’s one that says while index funds may give you an easy ride up…

When markets soar, the reflexive nucleus accumbens fires up at the back of the brain’s frontal lobe, and we instinctively want to buy. When markets fall, the amygdala floods our bloodstream with corticosterone, fear kicks in, and we’re overwhelmed by the urge to sell.

We generally encourage our clients not to follow the ebb and flow of the global stock markets. But every now and then, you can’t easily avoid it, and we’re at one of those moments now. Share prices, and specifically price falls, are once again front-page news. So, what’s going on? And what, if anything, can investors do about it?

Stock market volatility can be very uncomfortable for investors. It can also lead us to make irrational decisions. But learning to live with turbulent markets is a crucial component of successful investing. Listen to investment journalist Moira O’Neill.

It’s likely to take many years yet for the financial advice profession to regain the trust of the Australian public after the damning findings of the Hayne Royal Commission. The good news, says ROBIN POWELL, is that it finally seems to be turning the corner. But, he warns, you still need to be very cautious when choosing which firm to work with.

A new book by Andrew Hallam suggests we take some time to reflect on what true wealth is all about. The key, he says, is to find a healthy balance, and to work out what sort of purchases make the biggest contribution to our happiness and wellbeing.

The story of a woman who stole some $30 million from friends and family while posing as a financial planner and then mysteriously disappeared is the subject of Australia’s most popular podcast. It is also an object lesson in what investors should look out for in spotting a fraud.

Professor Richard Taffler from the University of Warwick is an expert on this subject. He says traders and investors typically exhibit behavioural characteristics more commonly associated with gamblers.

With Australians due to go to the polls on 21st May, that old saying about never bringing up politics at the dinner table perhaps needs to be revisited and extended…

It is with great pleasure that I announce the merger of Minchin Moore with Melbourne firm, Professional Wealth.

Rapidly rising inflation is scary for those who haven’t experienced it — and that’s everyone under the age of around 50. It’s arguably even scarier for those who have. One…

Michael Kitces is a well-renowned authority on this subject. He says that it’s important to realise that the role of an adviser, or financial planner as he prefers to call them, has changed considerably over the years.

Most investors base their decision on which actively managed fund to invest in on past performance. However they fail to appreciate the extent to which volatility skews returns. They assume that managers who’ve performed well were skilful, when in fact they outperformed simply because they took on more risk.

When faced with the truths about how many stock brokers or active fund managers actually outperform the market indexes, it is hard to understand why so many investors chose to invest through these mediums.

With the Ukraine crisis unfolding, markets are gyrating as, each day, they try to incorporate the new news and expectations into stock, commodity and bond prices. In this environment, as markets wobble, its easy to feel anxious, and feel like you need to do “something”. And yet, paradoxically, sometimes the best thing to do is nothing at all.

Drought, fire, pandemic, floods, war and now the premature death of an Australian sporting icon. What’s next? Shane Warne was a flawed individual who polarised opinion. But in this edition of Insights,…

Current events in Ukraine are having direct impacts on global markets. Russia and Ukraine are suppliers of raw materials, food an energy – essential for many supply chains.

The years 2020 and 2021 were not “normal years”. Both years humbled forecasters, virtually none of whom accurately predicted either the downturn or the recovery. Now, two years on, with the…

Some sentiments doing the rounds right now: The 4% rule (consuming 4% of your portfolio value each year) will never work anymore because bond yields are so low.Tech stocks are…

From the beginning, our strategy has been to build an independent, professional advice business, unlike anything that existed before. A business free from the conflicts of interest that have plagued…

"The most fundamental problem of politics is not the control of wickedness but the limitation of righteousness" Henry Kissinger Regardless of political creed or levels of interest, the one thing…

In an environment of diminishing income returns a different approach to funding cashflow is required. This approach seeks to take advantage of the diversification benefits and growth potential from lower yielding assets and adopting a ‘total return’ mindset.

Since I last wrote in this column on 31 March there has been tremendous change. The way we live, the way we work, the way we engage with each other and the way we think about the future. Some of the change has been good, much of it terrible, and there is plenty that we’re still not sure about.

For investors, the real danger of crises such as this one is the possibility of suffering a permanent loss of capital. For the most part, this eventuality typically stems from…

The one thing we know with certainty with bear markets is that they will eventually end. The problem of course is working out when. In market speak, “capitulation” is the…

Coronavirus is affecting the global economy to a greater degree than any previous event.  Global supply chains are so interwoven that the initial disruption in China triggered a meaningful slowdown in…

Share markets are breaking records daily right now. With all the uncertainty, and extreme volatility, many investors are asking themselves if they should sell their shares now, with a view to buying them back later when there are signs that things are returning to normal. In this edition of Insight, we provide investors with a framework through which to answer this question.

In this edition of Insights we look at what’s really behind the volatility and give investors a sense of how their diversified portfolios have been travelling through this roller coaster period.

As most readers will know, Coronavirus (now known as COVID-19) started in the Wuhan province in China. Prima facie, you could be forgiven for believing that the virus isn’t remarkable.…

Mark Minchin was recently asked to join an expert panel to talk about managing risk at the LiveX (Australian livestock exporters) conference in Townsville. Risk Tolerance Behavioural Finance Sustainability

Whilst investors are right to consider global events and their implications, there is much more to the picture that should be considered if we are to be truly objective about…

With the Australian share market near record highs, some people may feel reluctant to invest and prefer instead to wait until the outlook feels more certain. However the difficulty with…

Attempting to buy individual stocks or make tactical asset allocation changes at exactly the “right” time presents investors with substantial challenges.  Buyers and sellers in markets are generally motivated to trade…

With the election only a few days away, many of our clients have expressed confusion about the potential impact of a Shorten Labor Government. We've taken the time to explain…

We are pleased to announce the opening of our new offices in the Sydney CBD – Suite 2.14, 165-167 Phillip Street. This new location represents our fourth office, with existing…

When the major superannuation changes came into law in 2017, most of the focus was on the $1.6M transfer balance cap for pension members. However, one significant change that may…

Have you ever gone out on a limb and bought a stock on the share market based on a friend or colleague's advice? Or maybe you heard something and followed…

The fundamental structure of the advice industry in Australia has been flawed, pretty much since its inception. The dishonest advice practices that are being uncovered daily by the Royal Commission…

Selecting and buying individual stocks offers both the hope of great returns (you might find the next CSL or Apple) and the potential for disastrous results (ending up with Babcock…

Story by Bridget Carter. Published in The Deal by The Australian, in association with Barron's.  July 21st, 2017. Read the article as it was published in print by downloading it…

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…

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…

For most of the quarter volatility stayed low and equity markets around the world defied interest rate increases and kept climbing upwards. But towards the end of the quarter it became apparent that inflation would remain sticky

An eerie calm has fallen over markets in recent weeks, as the banking stresses of early March fade into the background. Market measures of risk, such as volatility, have retreated, while global equity markets have rebounded strongly, buoyed by a resurgence in technology stocks.

A portfolio that includes a diversified exposure to international shares that is linked to market cap weights will include stocks before, during and after they have their winning streak. That is your best bet for a successful investment journey.

Global stocks and bonds staged a sharp recovery in the first quarter as signs that inflation is moderating encouraged hopes that central banks will soon begin to wind down their year-long cycle of tightening monetary policy.

This quarter has been dominated by the collapse of Silicon Valley Bank and the ensuing banking crisis, set against a background of cooling inflation, continuing rate hikes,...

Volatility has struck financial markets as several banks in the US and Europe collapse and require Governments and regulators to step in to protect depositors. If there is another GFC brewing, are Australian banks at risk? The short answer is “no”.

December brought to an end the toughest year for global financial markets since the financial crisis of 2008 amid resurgent inflation, rising interest rates and the shock to commodity markets from Russia’s invasion of Ukraine.

Despite reassurances from the RBA at end of 2021 that interest rates would not go up until 2024 (!!!) the equity and bond markets really didn’t believe that, and prices started tumbling right from the start of the year.

Since the 1st of October the ASX 200 is up some 13%, meaning that year to date the Australian market is now in positive territory – certainly not what most investors would have thought after the volatility in markets this year.

As Christmas approaches, more and more people seem to be asking what is in store next year, in terms of interest rates. For those with mortgages, and perhaps fixed rate mortgages that are about to roll off, the need for clarity is acute.

Rapidly rising interest rates have had a profound effect on asset markets this year. Perhaps nowhere has this been more pronounced than in the technology sector.

There are signs that global bond markets could be bottoming out and are ready to come back and play their traditional role as a defensive part of a portfolio.

Global stocks were mixed, while bonds fell for a third consecutive quarter to 30 September. Dominating headlines was inflation news, central bank action to rein it in,...

Most investors can ‘feel’ that 2022 has been a miserable year. Australian shares, as measured by the All Ordinaries Accumulation Index are down around -7% year to...

Keeping the economy moving forward while raising interest rates will be a narrow road and require careful navigation by central banks.

Known Unknowns. Bond vs Stock Performance, which will do better in the next 12 months?

Both global bonds and equities fell heavily in an eventful June quarter in which headlines were dominated by the ongoing war in Ukraine, rising inflation and efforts by authorities to unwind pandemic-era monetary stimulus.

The themes for the June quarter are inflation, inflation, and inflation… The ASX defied gravity in the first quarter, but we have managed to catch up with the rest of the world this quarter.

Aside from cash, good quality investment grade bonds are generally the most stable and defensive component of an investor’s portfolio. Yet over the last 12 months have bonds have fallen in value by around 10%.

Investors around the world have realized that fighting inflation is going to be painful—which in turn has caused turmoil in the markets. Since the start of the year the Australian market is down 12% – but that’s good relative to other markets.

Dr Steve Garth, Independent member of the Minchin Moore investment committee, Principal at Principia Investment Consultants  Rampant inflation, rising interest rates, a war in Ukraine, Covid in...

Global equity markets in the March quarter posted their worst quarterly performance since the onset of pandemic two years ago, while the global bond market notched up its worst performance in at least three decades.

Global Markets Summary Global developed market stocks posted their sixth straight quarter of gains in the third quarter, with many indices hitting record highs in August before...

Global equity markets rose for a fifth consecutive quarter in the three months to 30 June, reaching record highs and continuing their rapid recovery from the pandemic shock of the first quarter of 2020.

Global equity markets posted a strong start to 2021, with global indices approaching record highs and many individual markets approaching or surpassing pre-pandemic records.

Dominating headlines were growing signs of global economic recovery amid a fast-tracking of vaccine rollouts and the passing of a US$1.9 trillion fiscal stimulus package by the incoming Biden administration.

Global Markets Summary An extraordinary year in global markets ended on a positive note in an eventful fourth quarter, with equities registering very strong gains, led by...

The dramatic turnaround in global equity markets from the coronavirus-induced slump in March continued in the September quarter, although prices fell back in the final month of the...