Tag Archive: Financial Planning

Aug 17

Look for the Signal amongst the Noise

Background When disappointing performance occurs, alarm bells will typically ring in the minds of investors, advisers, asset consultants and perhaps the managers themselves. Investing has only ever been a long game but thanks to the internet, the 24-hour news cycle, social media, etc. etc., it appears that success is expected to occur quickly and this …

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Nov 14

Does higher non-market risk produce higher alpha?…and the possible introduction of the Furey Ratio

Background There’s a widely held belief that to create alpha (i.e. positive returns after adjusting for risk…let’s say market risk), a manager needs to make meaningful bets away from the market. That is, stop being a “benchmark hugger”, concentrate the portfolio with best ideas, and/or move the portfolio holdings away from the benchmark and possibly …

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Sep 20

A widely accepted portfolio construction flaw

The typical approach to portfolio construction in the world of financial planning is a 2-step process (of course, this is after the desired risk and return characteristics are settled). The first step is setting asset allocation and the second is investment selection where most of the industry chooses to select from a variety of managed fund strategies. …

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Nov 08

Merton’s Retirement Income Views…correct but its not a product solution…its an advice solution!!!

Nobel laureate economist Robert Merton says David Murray’s Financial System Inquiry must fundamentally shift how Australia thinks about superannuation. He says the desire to maximise lump-sum balances at retirement is excessively risky; the focus should be on ensuring retirement income is enough to meet a desired standing of living. Source: AFR – 6 Nov 2014 …

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Feb 25

Investment Fees…room to trim (wonkish)

When a financial adviser gains a investment client, on an ongoing basis that client pays fees for 3 main services/providers… Financial Adviser Investment Management…typically a fund manager Platform…for investment administration and reporting There can always be a fair amount of debate as to what the true margins are, particularly given some of the vertically integrated …

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Mar 06

The most powerful financial planning tool

The process of financial planning is like any planning process… you find out where the client is positioned today, work with the client to establish goals whilst understanding the constraints to reaching those goals, and then design, present and implement a strategy to reach those goals…which is then reviewed on a regular basis..therefore go back …

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Feb 11

A quick look at equity and bond markets

Source: www.incrediblecharts.com As the above chart shows the Australian Sharemarket has had a stellar run over the last 3 months. Not a hint of volatility just upwards she goes from around 4350 to just short of 5000…throw in a very small number of dividends and its a superb return. Newspaper talk has suggested that there is a …

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Nov 08

Does Value offer much Value? … this is a discussion on equities performance

Source: MorningstarDirect The above chart shows the performance of the MSCI Australia Value index versus the MSCI Australia Growth index over the last 12 months (in fact through to close of trading yesterday). There’s obviously a hug divergence in performance as the Value index has returned more than 21% whilst the Growth index has barely …

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Jun 27

Australian Equities Style Investing – Value vs Growth

Its been over a week since I posted so I thought I’d write about something that is a little bit different and hopefully may provide a little bit of food for thought. The above chart shows the performance of the MSCI Australia Value index (dominated by low PE stocks) vs MSCI Australia Growth index (dominated …

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May 25

A Heat Map of risks and income for Life Cycle Financial Planning

Found the above heat map in an interesting article on life cycle financial planning on Milliman’s website … click here for the article. I think the heat map speaks for itself…(although apologies for the spelling errors..my bad)…and clearly points out the risks that generally need to be addressed at various points in time. As the …

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