Your Portfolio

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…

The paradox of the bull

Would it surprise you to hear that we are now in the eighth year of a bull market in Australian shares? There’s always plenty of doom and gloom in the media about the current state of markets, but the All Industrials Accumulation Index is up over 3 times from its post-GFC hangover. That’s the good…

Three charts on: the great Australian wealth gap

It’s a tale of two Australias: older Australians are getting much wealthier, and the young are being left behind. It’s a story only too familiar to Australians under 45 who have struggled to save enough money to access the housing market in Australian cities. They are a generation for whom the great Australian dream of…

Do rising interest rates reduce returns on income investments?

Many will remember to their cost the infamous “taper tantrum” in June 2013. It was the moment Ben Bernanke, the then Chairman of the US Federal Reserve, indicated that the quantitative easing (QE) would be scaled back, or tapered. The QE programme had fed money into the financial system to stimulate the economy following the…

Show me the incentive, I’ll show you the outcome

“Show me the incentive and I’ll show you the outcome”.  Charlie Munger’s quip is typically insightful and relevant to many of the ructions currently facing the domestic economy and a number of the key sectors within it. Structuring incentives which engender desirable behaviour is often more complex than it appears, whilst misguided incentives almost always…

Do current interest rates justify chasing yield?

By Wealth Foundations With bank term deposit and other short term interest rates at historically low levels, many of those who rely on fixed interest to fund their lifestyles (retirees, in particular) feel under increasing pressure to examine higher yield alternatives. These usually come with significant additional, and often underappreciated, risk. Investment decisions should not…

China’s Stock-Bubble Burst

China’s stock bubble has burst, with its stock markets utterly collapsing after rocketing parabolic.  The failure of this popular speculative mania has grave implications for the global stock markets.  It shatters the universally-believed myth that central banks can nullify normal market cycles.  No government has more power over its stock markets than China’s, yet not…

What is your future capital? A guide to risk taking

By Wealth Foundations When it comes to personal finance, as in most areas of our lives, we often rely on some fairly simple notions to make some very significant decisions e.g     “As a 40 year old, the bank is willing to lend and I’m comfortable borrowing five times our household income to purchase a…

Consumed: why more stuff does not mean more happiness

Judith Stark, Seton Hall University Consumption. By a strange shift of meaning, this 19th-century word describing a serious and often fatal disease is the same word used now for a way of life focused on material goods. Is it time to bring back its negative, and often deadly, associations into our public discourse? Consumption as…

Priceless: the inefficient, but merry economics of Christmas

By Kevin Albertson, Manchester Metropolitan University Fingers crossed, we are soon to be inundated with Christmas joy disguised as presents from our family and friends. I received my first card more than a week ago and a present – now sitting under the tree – from our eldest, wee Jimmy (now not so wee and…