Michael

Author's details

Date registered: January 28, 2012

Latest posts

  1. Investment Philosophy … a short primer — June 6, 2022
  2. A Few ESG Investment Thoughts — June 28, 2021
  3. Approaching the Zero bound — May 22, 2020
  4. Worry about Valuations??? … yeah, a bit … — April 24, 2020
  5. The decline of the Aussie … almost halved in value since July 2011 — March 19, 2020

Most commented posts

  1. The disappearing credit spread…US now at pre-GFC levels — 6 comments
  2. ASX200 to go through 5000!!! — 4 comments
  3. A Must Read on “The Economic State of Australia” — 4 comments
  4. Tonight should be a turning point…either way — 3 comments
  5. Asset Allocation that considers Asset Weighted Returns — 3 comments

Author's posts listings

Jun 06

Investment Philosophy … a short primer

Everything I do in my day job is in one way or another a function of the investment committee. My roles vary from governance oversight as Chair, keeping consultants and portfolio managers on their toes as an investment specialist independent member, or perhaps I am the consultant who provides advice on portfolio design including asset …

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Jun 28

A Few ESG Investment Thoughts

ES Investing Possibly the biggest trend in investing today is the shift towards ES investing. No, that’s not a typo because it is the E (Environmental) and S (Social) factors of ESG investing that are experiencing the greatest focus as humankind faces existential threat from climate change (i.e. E) and numerous social issues, whether racism, …

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May 22

Approaching the Zero bound

I’m always fascinated by the various changes in financial market behaviour and this economic lockdown has created some new behaviours in the cash or money markets not seen before (or that I’m aware of). The chart below shows the performance of 3 cash benchmarks: RBA Cash Rate Target … currently 25bps (Green) RBA Cash Overnight …

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Apr 24

Worry about Valuations??? … yeah, a bit …

The biggest market in the world, often represented by the S&P 500 index, crashed pretty quickly from 24 February reaching its bottom on 23 March. This fall, in US Dollars, was around 34%. Since then, it has bounced back by around 25% after almost 5 weeks … not a bad turnaround, but obviously not back …

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Mar 19

The decline of the Aussie … almost halved in value since July 2011

The above interactive chart shows what the latest crisis events have invoked on the Aussie dollar. At the time of writing trading around $0.57US which is down from a high in July 2011 around $1.10US … so almost half. Unfortunately for our currency this is what happens when crises occur … investors run to the …

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Mar 19

RBA announces 3yr target of 0.25% and drops cash to 0.25% … & a very strange yield curve

Reaction to 3 year bond price in the first chart below … that’s still a 0.5% yield to maturity. So the RBA are saying they want 0.25% yield to maturity which is a high bond price but only  little bit of interest in the first 5 minutes or so off the bat. Source: Bloomberg A …

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Mar 19

Most markets are mostly efficient most of the time … maybe not so much now

Its clearly been a long time since I updated this blog and perhaps this current crisis makes most sense to make a comeback; particularly given I started this blog not long after the worst of the GFC (Jan 2009 to be precise). Anyway, the current crisis has clearly required a global response to slow down …

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May 31

A Few Investment Selection Faux Pas

Over the years having worked in consulting and research I have been sent countless portfolios for opinion. Virtually all portfolios have followed a pre-defined asset allocation aligned to a specific risk profile but occasionally that is where the alignment ends. This is because the investments selected bear little to no relationship with their desired characteristics …

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Apr 27

From Asset Allocation to Risk Allocation

Background After capital market forecasts and assessing investor objectives, the current method for portfolio construction starts with the asset allocation decision followed by investment selection. In the Australian financial planning industry, it widely accepted that the asset allocation decision is responsible for most of the portfolio performance variability, and it is, rightly or wrongly, regarded …

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Mar 14

Diversification … clearing up what it is and what it isn’t

Diversification is one of the central tenets of investment management and fundamental beliefs across the global financial planning industry. Its validity was set in stone by Harry Markowitz in his PhD dissertation and 1952 Journal of Finance article, Portfolio Selection, which demonstrated the effects of combining uncorrelated assets … i.e. improvement in the portfolio’s return …

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