Welcome from Chris Cuffe
This week we have some unusual ideas that will challenge your thinking. Justin Wood explains how the much-lauded Yale University combines its spending needs and abilities with responsiveness to changing market conditions, and he challenges retirees, endowments and governments to bring the same rigour to their spending.
It is nothing short of extraordinary how large American universities and colleges raise money. In 2011, Yale completed a seven-year 'Yale Tomorrow' capital raising with $3.9 billion in gifts and documented commitments from alumni, friends and foundations, including $585 million in one year. Every Australian university would look on in envy at the giving culture of American alumni, and the attention given to investment strategies to manage the resulting resources.
Alex Denham uses a valuable concept, your 'sphere of risk', to warn of an exposure that few people have probably thought of - that instead of facing a relaxed and well-funded retirement, an accident to your children may leave your grandchildren and another mortgage dependent on you.
Nassim Taleb's The Black Swan is one of the more influential books of our times, and in this interview, he warns we are living in a fat-tail world where extreme events are common, while our ability to predict them is nil. The interview focuses on implications for pensions and retirement.
Ashley Owen gives us a fascinating diagram on personal income tax payments in Australia, while Norman Derham argues it is the direction of interest rates, not their absolute level, which influences the performance of equity markets. He compares 60 years of bond yields and realised equity market returns to make his case.
Chris
Latest posts from Cuffelinks, 7 Jun 2013, Edition 18
- Spending guidelines for retirees and endowments Justin Wood
- Could your kids accidentally hijack your retirement? Alex Denham
- How much income tax do you pay? Ashley Owen
- Surviving in a fat-tail world Mariska van der Westen (I&PE Magazine)
- What do bond and equity yield differentials tell us? Norman Derham
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