Welcome from Chris Cuffe
Cuffelinks focusses on long-term investment ideas, and the short-term drama of US politics and debt ceilings should have little effect on a 10-year investment plan. But it's impossible to ignore the potential implications, especially since all the arguments will be back again in a few months.
Dominic McCormick criticises the knee-jerk responses of many analysts who claim such short-term worries present a "buying opportunity", and he emphasises the need to see each event in its specific context.
The media has been dominated by guesses and conjecture about how markets might react, so it's timely to bring you two insider stories of the personal drama, tension and even terror of managing money during a global meltdown.
Graham Hand and Warren Bird were on opposite sides of the GFC as borrower and investor. They recall what it was like to fund a business and manage money during the crisis, and here's the surprising part ... the GFC hit credit markets much earlier than equities, but stockmarkets ignored it for months. It was a massive disconnect. They argue the GFC really started on 9 August 2007, a year before Lehman collapsed. It's six years ago, but the world economic system is a long way from addressing its fiscal problems.
It's easy to forget how bad it was. The number that sticks in my mind is that Commonwealth Bank partly financed its purchase of BankWest from HBOS plc in October 2008 with a share issue priced at only $26. It's now $73. Every crisis throws up opportunities.
Bringing us back to earth, David Bell presents the third in his series on life annuities, a product which is gaining more attention as the industry addresses the need for income and longevity protection in the post-retirement phase. And Alex Denham identifies an opportunity for advisers and their clients to make their age pension payments far more efficient.
Chris
Latest posts from Cuffelinks, 18 Oct 2013, Edition 36
- Sometimes, the best answer is “I don’t know” Dominic McCormick
- An insider’s view of the last financial crisis Warren Bird
- What did you do during the GFC, Daddy? Graham Hand
- Behavioural reasons why we ignore life annuities David Bell
- Are you getting the most from your age pension? Alex Denham
Download PDF