With Australia having the second worst returns amongst the above-mentioned OECD countries this clearly shows the benefits of having a portfolio that was diversified globally during 2008. Even in the USA, the originator of the global financial crisis had better returns than in Australia. Send article as PDF
Monthly Archive: June 2009
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Jun 26
Paul Krugman on the GFC
Whilst the following statement from Paul Krugman is taken from a debate on how to deal with the global financial crisis and is quite a few weeks old. It still applies and is an excellent description of the current state of the Global Financial Crisis and why interest rates should stay relatively low despite massive …
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Jun 24
Benchmarks
One of the things that annoys me when I’m analyising managed fund performance is their chosen bechmarks. I’m of the belief that a managed fund benchmark should have the following attributes… Investable Realistic Replicable a reflection of the fund’s investable universe Unfortunately there are numerous funds out there that have benchmarks that fail these key …
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Jun 19
A simple economic/financial update for some planners
Over the past few months the global economy has seen the emergence of “green shoots”. As implied, there are indications that the global economy may be turning a corner. Like turning around a super tanker, turning around the global economy will take a long time and these signs aren’t so much an improvement but indicate …
Jun 13
Misquoted in the Financial Review
I’m typically a little nervous about interviews with journalists because you never know how they may use your comments and its not always 100% clear as to specifically what they’re writing about. Lucky me had my photo and was quoted in today’s Financial Review article on inflation linked bonds written by Brendon Lau (page 42 …
Jun 12
Australia’s Steep Yield Curve
An incredible steepening of the yield curve has occurred throughout 2009. As can be seen the latest 10 year bond yield isn’t too far from where it was in the middle of 2008. This yield curve tells us several things about the state of current markets and economy… the market is starting to think that …
Jun 12
The safest investment strategy
I have just read an article by Zvi Bodie, who has authroed a few university investment texts, and he reminds us of a simple but unfortunately forgotten or ignored concept… “Matching is the safest investment strategy for achieving a specific goal. To eliminate the risk of falling short of an investment goal at a specific …
Jun 11
Style Biased Index Funds – the Future of Managed Funds
Index funds were born out of modern portfolio theory which suggested that the highest risk-adjusted return should come from purchasing the market portfolio. As it is impossible to purchase market as a whole, the index fund effectively replicates the market by purchasing a large proportion of the market with each stock’s weighting proportional to its …