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Real Returns

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What do you expect from your portfolio today?

Recent history has been spectacularly good for most asset classes but there is a the colossal gap between fundamentally-based forecasts of stockmarket returns over the next 5-10 years and investor expectations.

How inflation impacts different types of investments

A comprehensive study of the impact of inflation on returns from different assets over the past 120 years. The high returns in recent years are due to low inflation and falling rates but this ‘sweet spot’ is ending.

Rising real yields likely to undermine equity values

Negative real yields have unmoored asset prices from fundamentals, but inflation pressures are likely to start pushing real yields higher. Higher real yields should feed into lower risk asset valuations.

Get real: how we delude ourselves about investments

What cost $1 in 1988 now costs $2.29 adjusted for inflation. We should make return calculations in real terms or we are deluding ourselves about investment performance over longer terms.

Aussie shares: 50 years and we’re finally ahead

It's too easy to look at a long-term chart of rising share prices and be reassured about performance. But adjusted for inflation, many of our largest companies have gone nowhere in half a century.

Achieving real returns in a low-growth world (part 2)

Meeting real return objectives in a low growth environment is a challenge. Investors will need to use cyclical volatility to their advantage by riding the upside and, importantly, avoiding the falls.

Achieving real returns in a low growth world

The 'lower for longer' mantra has become common, but investors can assess current market conditions to achieve decent returns after inflation, without taking on extreme levels of risk.

Value of tax-aware investment management

The investment performance of super funds and other investment managers has historically been measured against pre-tax indices. Once tax is taken into account, the return on investments is quite different.

High dividend yields support equity returns

Over the past seven decades, relatively high ‘real’ dividend yields have pointed to broad equity market rallies ahead. Despite signs of a fully-priced market, investors are still buying for yield.

Choosing the right ingredients for inflation-linked investing

It's a difficult task, looking for good ‘inflation plus’ exposure over a long period such as post-retirement. Research into appropriate asset classes shows low correlations make the problem hard to solve.

Why we overlook lifetime annuities

Lifetime annuities have some attractive features but remain neglected by most retirees. There are rational reasons for this, which the annuity industry has to overcome if the product is to address more longevity worries.

US Government shut-down – been there, done that

The current US budget crisis will not be the first time its government has run out of money. Scary as this may sound to investors, the impact on markets of recent government shutdowns was different to what many expected.

Most viewed in recent weeks

10 little-known pension traps prove the value of advice

Most people entering retirement do not see a financial adviser, mainly due to cost. It's a major problem because there are small mistakes a retiree can make which are expensive and avoidable if a few tips were known.

Check eligibility for the Commonwealth Seniors Health Card

Eligibility for the Commonwealth Seniors Health Card has no asset test and a relatively high income test. It's worth checking eligibility and the benefits of qualifying to save on the cost of medications.

Hamish Douglass on why the movie hasn’t ended yet

The focus is on Magellan for its investment performance and departure of the CEO, but Douglass says the pandemic, inflation, rising rates and Middle East tensions have not played out. Vindication is always long term.

Start the year right with the 2022 Retiree Checklist

This is our annual checklist of what retirees need to be aware of in 2022. It is a long list of 25 items and not everything will apply to your situation. Run your eye over the benefits and entitlements.

At 98-years-old, Charlie Munger still delivers the one-liners

The Warren Buffett/Charlie Munger partnership is the stuff of legends, but even Charlie admits it is coming to an end ("I'm nearly dead"). He is one of the few people in investing prepared to say what he thinks.

Should I pay off the mortgage or top up my superannuation?

Depending on personal circumstances, it may be time to rethink the bias to paying down housing debt over wealth accumulation in super. Do the sums and ask these four questions to plan for your future.

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The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
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