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Beyond ESG
Read more: Beyond ESGWhat’s the easiest assumption you can make about the future? Assuming what’s just happened will continue to happen. It was only a couple of years ago we thought we’d seen the back of a certain US President forever! It’s a handy reminder about extrapolation or recency bias on anything. Politics exists on a pendulum. Things swing back and forth. It’s generally the incumbent party’s power to lose. Be that through incompetence, hubris, or staleness. Power then shifts back to the other side of politics. With investing or business, things are always moving forward. Not side to side. The analogy might…
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2024 Q4 December Quarter Review
Read more: 2024 Q4 December Quarter ReviewEconomic Overview Q4 2024 was somewhat mixed for Australian investors, but it rounded out what was a positive year across all asset classes. The falling Australian dollar was a tailwind for unhedged investors over the quarter, while the Australian sharemarket was slightly negative. For the year, unhedged global shares, hedged global shares, and Australian shares, all notched double-digit returns. The most notable story across the quarter was Donald Trump’s victory in the US presidential election. This was accompanied by a “red sweep” which saw the Republican Party take control of Congress. As with President Trump’s 2016 election, markets were buoyed…
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Fiddling with The Future Fund
Read more: Fiddling with The Future FundThe Future Fund has a new statement of expectations and new investment mandate. From the government press release: The new Investment Mandate will require the fund to consider Australia’s national priorities in its investment decisions, where possible, appropriate and consistent with strong returns. These national priorities are: Some are saying it’s just wording and won’t mean much. Others have suggested there wouldn’t be a change in wording unless the government was intending to lean on the Future Fund and direct them into the areas specified, specifically whatever their pet projects were. Plenty have opined if such investments were worthy, then…
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The Nastiest, Hardest Problem in Finance
Read more: The Nastiest, Hardest Problem in FinanceWhy do financial advisers exist? Financial problems of course, and there are a lot of problems in finance! How much to save? How to invest while balancing risk and return? How much can I spend? What returns do I need to meet my goals? What’s inflation doing? What’s everyone else doing? That one shouldn’t matter, but too often it does, and relates to another problem: behaviour. Those are what might be termed single issue problems, but there’s one out there that manages to combine many of these problems into one: decumulation in retirement. Nobel prize winning economist, Bill Sharpe, called…
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2024 Q3 September Quarter Review
Read more: 2024 Q3 September Quarter ReviewEconomic Overview Q3 2024 saw decent gains across all asset classes, with fixed interest relatively strong as rate cuts helped to drive up bond prices. Global stocks saw smaller gains with the strengthening Australian dollar again proving a headwind for unhedged investors. After months, even years, of speculation about rate cuts in the US, the Federal Reserve finally moved during the quarter. This was off the back of evidence that inflation was continuing to moderate, and the jobs market showing signs of softening. The Bank of England and Bank of Canada also came to the rate cuts party in the…
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