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Edition 21

  •   28 June 2013
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Welcome from Chris Cuffe

We all have different attitudes to 'risk'. Some adventurous people with an entrepreneurial spirit can put everything on the line to follow a dream, while others work in a safe job for years, keeping all their money in cash and a family home.

Where I find the analysis of 'risk' frustrating is that for many there is an obsession with market volatility in the value of an asset as the most important indicator of risk. And there is, in my view, a misallocation of resources in attempting to minimise or even eliminate many forms of risk. Risk management has a cost/benefit and I wonder who is looking at this. 

Some of my colleagues at Cuffelinks don't agree with parts of my article this week. I've tried to bring a broad brush to my views on risk, and this may disappoint the more technical among our readers. It is borne of years of sitting around investment meetings feeling much of the discussion on risk is not on the issues I worry about. You'll have your own perspective.

Michael McAlary observes the paradox that living longer does not necessarily mean you will work for longer, and the strains this will create. Bruce Gregor calls on superannuation funds to provide individuals with a better understanding of their own investment performance, calculated from their own cash flows. And David Bell completes his series on real returns, this time giving some advice on how to manage a portfolio better allowing for inflation.

We've also included an interview with Ken Henry, as it reinforces some of the points made last week by our own Ashley Owen. Dr Henry says the Australian businesses likely to succeed in the Asian century are those that have set themselves to provide goods or services to the 3.2 billion (yes, that number is correct!) middle-class consumers living in Asia within 15 years. In Ashley's language, we need to sell more than 'rocks, beaches and funny-looking animals'.

Chris

Latest posts from Cuffelinks, 28 Jun 2013, Edition 21

  • We need to talk about risk Chris Cuffe
  • The financial life cycle paradox Michael McAlary
  • Managing for real returns David Bell
  • Supersize and individual reporting for members Bruce Gregor
  • Australia’s economic future, with Dr Ken Henry The Conversation

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  •   28 June 2013
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