The above chart shows the 10 year performance of the S&P500 (blue bars) versus the 10 year average annual inflation (red bars) versus the Shiller PE Ratio at the start of each decade (green bars). There are several notable observations… The worst performance was during the 1930s when the US experienced a deflationary environment and …
Monthly Archive: January 2010
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Jan 23
The return of lifetime annuities!??!
I just read that the Henry Review is likely to suggest that superannuation can be exchanged for guaranteed lifetime income like lifetime annuities. Strangely, it can be done already by purchasing a lifetime annuity with superannuation money. The problem with the current situation is that there are no lifetime annuities left on the market….Comminsure and …
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Jan 22
Interest Rates…relatively stable but a minor dip at the long end
Source: Reserve Bank of Australia The government bond yield curve certainly expects another 50bps in RBA hikes this year with bonds yielding in the second half of this year trading around 4.3% to 4.4%. But since the start of the year the yields in longer term bonds have declined a little…this indicates a slight drop in …
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Jan 20
Active managers smash passive managers in 2009
Yesterday Morningstar released their investment performance league tables for each of the major asset classes for the Australian market. For almost every asset class in 2009, a higher proportion of active manager outperformed the index funds, like Vanguard, than underperformed. Vanguard’s 1 year performance rankings for each asset class are… Australian Shares – 55th out of 99 International …
Jan 15
John Stewart on Wall Street Bonuses
I found this video one of my favourite blogs….www.calculatedrisk.com . “The only people who have recovered from the financial meltdown are the ones who caused the financial meltdown”…John Stewart Click here. Send article as PDF
Jan 12
Economist Magazine says Australian housing overvalued by 50%!!!
I started reading this week’s Economist mag yesterday and the lead article is about the asset bubbles that are appearing all around the world thanks to low interest rates. Article can be found here for subscribers. In terms of housing the article suggested that the US is at fair value, whilst Britain is 30% overvalued, …
Jan 12
Why shouldn’t I invest in China?
There’s an excellent article in the 12 Jan Financial Times on investing in emerging markets…found here. The basic message is that there is no correlation between GDP Growth and stockmarket performance, in fact its slightly negative if anything, so be wary when investing in emerging markets. According to Professor Jay Rittner of the University of Florida, …
Jan 08
Current thoughts on some investing risks and themes
We have seen numerous investment trends come and sometimes go over the last X number of years whether it be technology, commerical property, Buffettology, CDOs, high yield, hedge funds, mortgage funds, etc, but at the end of the day a balance of the key investment risks wins through….i.e. the risks relating to equity, liquidity, interest rates, …
Jan 05
Perhaps House Prices are a bit high in Austraila?
It appears there is a breakdown in the relationship between unemployment and house prices. I hazard a guess that its due to the low home loan interest rates we currently have (see my previous post) but given it appears the Reserve Bank looks like increasing rates further this year, for how long will this breakdown …
Jan 05
Low Interest Rates for some but not all
Source:RBA The above chart shows the changes in interest rates since the start of 1997 for 3 different bank loans… Credit Card Interest Rates Personal Loan Variable Interest rates Home Loan Standard variable interest rates Now, over the past 18 months we have all heard about ow the banks have not been passing on all …