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…

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…

10 Tips for Succesful investing

To be a successful investor over the long term, we believe it is critical to understand, and hopefully overcome, common human cognitive or psychological biases that often lead to poor decisions and investment mistakes. Cognitive biases are ‘hard wired’ and we are all liable to take shortcuts, oversimplify complex decisions and be overconfident in our…

What is your investment wealth ratio?

By Wealth Foundations Absolute measures of net worth and net investment wealth don’t, on their own, tell us much about financial independence. For example, net investment wealth of $2 million may be more than enough if you only spend $60,000 p.a. but totally inadequate if you want to support a $150,000 p.a. lifestyle. Charts 2-6…

Why LICs Find Favour In Times Like Now

To make profits in this market you need darn good stock picking skills combined with a modicum of good luck – or else, you need a well-diversified portfolio, and listed investment companies (LICs) are one way to achieve this. They’re well diversified, cheap, and the oldest LICs have track records spanning back to the early…