As expected the Federal Budget focused on a surplus and to the government’s credit is looking to distribute some of their mining profits to the not so wealthy. Whilst the opposition is suggesting that some of the cash payments will be going straight to retailers instead of their intended purpose, that’s not necessarily a bad …
Tag Archive: investment
pub-5731955080761916
May 07
Australian Government Bond Yields…supports the dumb budget
Source: RBA As the above chart shows, the yield curve has dropped 70 to 90bps for all terms since March 19. With a 3 year bond yield just above 2.80%, which is close to where it was during the worst of the GFC, its pretty obvious markets aren’t too confident in the strength of our …
pub-5731955080761916
Mar 28
Bonds…the best protection from risky markets
Source: van Eyk The above chart shows the 12 month correlation of monthly returns between the UBS Composite index (representing Australian Fixed Interest) and the total return of the S&P/ASX All Ordinaries index (Australian shares). As you can see the correlation between both asset classes is extremely variable and the trendline shows that over the last …
pub-5731955080761916
Mar 27
Does our Super have too much in equities?
Over the last couple of weeks I’ve been asked to comment on the asset allocations of default super funds. There’s certainly been a very interesting debate through the print media which was probably started by David Murray, Chairman of the Future Fund, last year when he stated that Austrlaian Super Funds were too heavily invested …
Mar 20
Australian Government Bond Yields…approaching normal
Well…not normal yet. The shorter part of the curve suggests the market is expecting another two 25bps cuts by the RBA but with the Euro sovereign crisis well and truly looking much better its highly unlikely there’ll be any cuts soon. Whilst there’s plenty of evidence that shows the Euro sovereign crisis has improved, nothing …
Mar 10
SPIVA…Australian Small Cap managers demonstrate skill
The SPIVA report was released a few days ago and as I’ve mentioend before it is my favourite assessment of the success of fund managers because it takes into consideration survivorship bias…in other words, if you want to know who are the best fund managers over the last year, then you start with all fund …
Feb 26
Jeremy Grantham’s latest Must-Read
Jeremy Grantham’s latest quarterly newsletter is on the GMO website and as usual it is an educational, pragmatic and brilliant read. There is so much to take away from this one. There are three parts to his ‘longest quarterly letter ever’… 1. Investment advice from your Uncle Polonius …which contains 10 absolute must read points. …
Feb 20
Excellent long term performance from bonds…but there’s a lot more to it
A look at the average returns of bonds over the last 30 years does not suggest that equity returns have really been worth the risk. Table 1 shows the returns on Australian Bonds (Aust Comm Bank All Series/All Maturities) versus the accumulated return of the Australian sharemarket (S&P/ASX 200 TR) and whilst equities have the better performance …
Jan 25
Managing Market Risk using Variable Beta Funds
Lonsec have a reasonable investment strategy paper released today (subscription required) suggesting one of the best ways of managing equity market risk is to use variable beta managers. A variable beta manager is a manager who has the ability to significantly change their exposure to the market depending on their view. So if a variable …
Jan 15
Keep art and collectables out of superannuation
In recent times I’ve seen quite a few articles about investing in art and other collectables in your superannuation fund (I guess in response to weak sharemarket returns), and its something that has always disturbed me as this is one gutsy investment strategy for the well informed let alone your typical investor. One of my …