Overall it was a pretty good 12 months for all asset classes as they pretty much all achieved positive returns. Gold (USD) was the best with an annual return to the end of June 2010 of 34% whilst the only negative performer was the Australian Mercer Unlisted Property (pre-tax) index (looks like valuations finally caught …
Category Archive: General Investment
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Jun 22
Structured Products – tough to get your money back
Source: Credit Suisse Global Investment Returns Yearbook 2010 The above chart shows the gross outperformance of Australian shares (including dividends) versus Australian Bonds and Bills. Over the 110 years to the end of 2009, shares provided an additional return of only 6% to 6.8% versus bonds and bills respectively. Believe it or not, there is …
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Jun 22
Financial Crises for Dummies
Just found a great little article on the basic characteristics of financial crises by Rick Bookstaber…click here. It all seems so simple…before a crisis, Bookstaber says, “Equities are rising Volatility is low Credit spreads are narrow Correlations are low The opportunities are in the hinterland of low liquidity The yield curve is steep” Its all …
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Jul 08
Mutual Fund Theorem – Ignored by most financial advisers
According to John Campbell, Professor of Finance at Harvard, “academic finance has had a remarkable impact on many financial services. Yet, financial planners offering portfolio advice to long-term investors have received curiously little guidance from academic financial economists”. A case in point is the Mutual Fund Theorem, which was developed by Nobel Laureate, James Tobin …