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The 60/40 Portfolio – saying bye to old friends and welcoming new ones

Low interest rates have so far not ruffled the 60/40 portfolio, but rising rates mean managers and investors will have to be vigilant to maintain returns while controlling volatility.

Guess what? It may actually be different this time

Retirees or those close to retirement are courting risk by standing pat with too-aggressive portfolios. In a volatile market, tune out the pundits and take a look in the mirror. Are you happy with your exposure?

Have the rules of retirement investing changed?

In retirement, we still want to reduce stock volatility while generating cash flows. The two needs have not changed, but the reward expected in the old days from interest payments has gone. What should we do?

When defensive assets become indefensible, turn to tech

During COVID-19 and the economic recession, we are seeing a surprising new entrant to the defensive sector grouping. Technology shares have been behaving a lot like defensive shares such as food and utilities.

Let’s clarify growth/defensive and move forward

For all its widespread use in investing, growth/defensive remains undefined with a large degree of subjectivity. A Working Group is seeking an industry standard with measures for each asset class.

Spending phase calls for retiree risk rethink

The right kind of equity exposure in retirement should come with downside protection and upside capture that enables sufficient participation in market strength. Decumulation investing is different.

Did your super do better than this in FY19?

Many super funds and portfolio managers delivered strong results in FY2019, and critics of our default superannuation system should ask whether individuals can match these consistent returns.

Changing landscape of US large and mid caps

The sizeable increase in the market capitalisation of the technology leaders has inadvertently led to reduced diversification via a reduction to a mid cap exposure in portfolios represented by the Russell 1000.

Should you be a value or growth investor?

The idea that stocks should be divided into growth and yield categories diverts us from fundamentals. Intrinsic value eventually manifests in higher cash flow, whether or not share price appreciation anticipates it.

Is it time for ‘set and forget’ to consider retirement?

Sticking to a long-term ‘set and forget’ asset allocation plan forgets those close to or in the retirement phase. Further, we are at a point where prospective returns in all markets are lower.

Give me the long-term predictability of shares, at any age

For long-term investors who can tolerate short-term volatility, shares will deliver the best outcome including income in retirement. It's cash and term deposits that are the long-term risks.

Five ways to avoid the 'value trap'

Value investing is not just about a low P/E or EV/EBITDA. Other metrics need to be considered to prevent falling into a value trap, as well as what challenges are facing the industry and the time frame allowed for success.

Most viewed in recent weeks

Stop treating the family home as a retirement sacred cow

The way home ownership relates to retirement income is rated a 'D', as in Distortion, Decumulation and Denial. For many, their home is their largest asset but it's least likely to be used for retirement income.

Welcome to Firstlinks Edition 433 with weekend update

There’s this story about a group of US Air Force generals in World War II who try to figure out ways to protect fighter bombers (and their crew) by examining the location of bullet holes on returning planes. Mapping the location of these holes, the generals quickly come to the conclusion that the areas with the most holes should be prioritised for additional armour.

  • 11 November 2021

Welcome to Firstlinks Edition 431 with weekend update

House prices have risen at the fastest pace for 33 years, but what actually happened in 1988, and why is 2021 different? Here's a clue: the stockmarket crashed 50% between September and November 1987. Looking ahead, where did house prices head in the following years, 1989 to 1991?

  • 28 October 2021

Why has Australia slipped down the global super ranks?

Australia appears to be slipping from the pantheon of global superstar pension systems, with a recent report placing us sixth. A review of an earlier report, which had Australia in bronze position, points to some reasons why, and what might need to happen to regain our former glory.

How to help people with retirement spending decisions

Super funds will soon be required to offer retirement income strategies for members in decumulation. With uncertain returns, uncertain timelines, and different goals, it's possibly “the hardest, nastiest problem in finance".

Tips when taking large withdrawals from super

You want to take a lump sum from your super, but what's the best way? Should it come from you or your spouse, or the pension or accumulation account. There is a welcome flexibility to select the best outcome.

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