Welcome from Chris Cuffe
Investors have a natural tendency to put their money into asset classes or funds that did well in the previous year. Unfortunately, investing is about the future, not the past, and nobody has found a way to invest retrospectively (and legally). The key, therefore, is to understand why an asset did well in the past and assess whether the future holds the same opportunity.
In looking into the types of securities held by a typical diversified income fund, Campbell Dawson shows where the good performance came from last year – narrowing credit spreads, falling rates, strong equity markets – but questions whether it can be repeated. And with the sharemarket delivering healthy returns recently, Graham Hand shows how to compare a geared and ungeared equity portfolio, and calculates the performance needed to ‘break even’.
Millions of baby boomers (born 1946 to 1964) are approaching or are in retirement, and Kevin O’Sullivan explains sequencing risk, while David Bell encourages trustees to think more broadly about investment risk in a way most will never have considered.
To wrap up, Andrew Gale summarises the big issues he foresees facing the wealth management industry this year. Andrew was CEO of Count Financial when it was bought last year by the Commonwealth Bank, and has been at the coal face of many of the major changes in our industry. Chris
Top articles from Cuffelinks, 8 March 2013, Edition 5
- The returns to expect from gearing into shares Graham Hand
- Sequencing risk and ways to manage it Kevin O’Sullivan
- Don’t spend your career further exposing yourself David Bell
- Inside the hidden world of diversified income Campbell Dawson
- Dynamics, disruption and opportunity in 2013 Andrew Gale
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