This time of year gives an opportunity to take a break and come back refreshed and renewed for the new year. It is often a time when we have the chance to read, think and consider more deeply those ideas and insights that may not receive our closest attention during busier times.
In the spirit of reflection, and improving oneself, the five articles I’ve found most valuable start with Cuffelinks Special Edition 200 article, collating the two most valuable pieces of advice that over 30 investment professionals would give their 20-year-old selves. This piece becomes richer with every read, and is peppered with gems that will help to improve my decision-making for decades to come.
Having spent many years in the public eye as an SMSF specialist, I am regularly asked about property investment within superannuation. The borrowing rules and their application continue to inflate – and then dash - investor hopes and understanding how it works is still limited. Monica Rule’s excellent piece on how those rules apply to property development continues to hold true.
For those contemplating retirement, an investment concept that garners insufficient attention is sequencing risk. It's the risk of poor market performance early in the investment period, reducing the potential for longer term performance. Kevin O’Sullivan’s article should be read by all investors and professionals dealing with retirement.
I recently re-read Roger Montgomery’s piece, Bubbles and the corruption of risk, quoting Stanley Druckenmiller, formerly of the famous George Soros’ Quantum Fund. Druckenmiller references raisings for credit of dubious quality and Montgomery points to stretched equity valuations as having the potential to create a ‘phony asset bubble’. Nearly three years since this piece was written, equities have rallied strongly and credit markets have suffered no significant correction, but the warnings are there.
And finally, life is not all spreadsheets, as Jack Gray reminds us in Poetry for Investors. Sometimes the greatest insights come from the least likely sources.
An honorary mention for Alex Denham’s powerful article on the aged care experience of her father. Alex has spent much of her career dissecting legislation governing super, tax, social security and aged care for financial planners and their clients. Ultimately what matters is the experience of our loved ones, and how we care for them.
Gemma Dale, Guest Editor
Edition 235 | 18 Jan 2018 | Editorial | Newsletter