Your Portfolio

Value Investing 101

The moment you invest in the stockmarket, you sign up to participate in what is known as a ‘zero-sum game’ – in essence, for you to make a gain, somebody else has to suffer a loss. That simple idea has some profound implications. It means, if you want to outperform the wider market, it is…

Which is best – passive or active investment management?

Active managers spend a lot of their time rummaging through the mass of investment opportunities within a given market, seeking potentially mispriced assets: those whose fundamental value or bright potential has yet to be fully realised. Passive investing, in contrast, is predicated on the idea that indices themselves provide the most efficient access to a…

Interest rates to remain low

This week Reserve Bank of Australia governor Philip Lowe gave one of the more revealing speeches one is likely to hear from a central banker. It touched on many of the recurring themes in this column – sluggish wage growth, crazy levels of household debt, persistently low inflation, a long period of low interest rates,…

The rise of active management ETFs

Around the world, Exchange Traded Funds (ETF) assets have enjoyed staggering growth. Their value totalled just US$417 billion in 2005 but reached US$4.4 trillion by 30 September 2017 – a cumulative average growth rate (CAGR) of around 21%. EY global research estimates that ETF assets have the potential to hit US$7.6 trillion within three years,…

Will investors benefit from a reduction in the company tax rate?

The Government has proposed to reduce the large company tax rate from its current 30% to 25% by 2026-27. It argues that the reduction is necessary to keep Australia’s company tax rate internationally competitive and will create “jobs and growth”, ultimately leading to wages growth. It’s been a hard sell, with those opposing the move…

Protecting your portfolio from major downturns

It is nine years after the global financial crisis but we still have ultra-low interest rates. This is great if you are a borrower, but not if you are a saver. If you avoid risk today and invest in interest rate products (cash, term deposits etc), your returns will almost certainly be very low and…

Protecting your portfolio from major downturns

By Michael O’Dea, Head of Multi Asset, Perpetual It is nine years after the global financial crisis but we still have ultra-low interest rates. This is great if you are a borrower, but not if you are a saver. If you avoid risk today and invest in interest rate products (cash, term deposits etc), your…

Why global equities?

By Magellan Group Australians have heavily tied their financial fates to Australian equities. Australian stocks have certainly proved to be good investments over the past two decades. The industrialisation of China boosted commodity prices, which has helped Australia’s economy expand continuously since the early 1990s. Our banks and mining stocks, in particular, thrived. But is…

Being a successful investor

In 2008, John Bogle, founder of The Vanguard Group, said in a speech to a conference of Financial Planners: “Investing to me, is all about the long-term ownership of businesses, focussed on the gradual accretion in intrinsic value that is derived from the ability of our corporations to produce the goods and services that our…

The economics of ridiculously expensive art

What would possess someone to buy Leonardo da Vinci’s Salvator Mundi for US$450 million? You might think it’s an investment – after all it was previously sold for just US$10,000 in 2005. From an economic point of view, art can be an investment. Although the research shows art investing has mixed results. Art also has…