Here’s an investment truth that not everyone is focused on: when most Australian investors think they are diversifying globally, they are really just buying more US exposure.
Here’s an investment truth that not everyone is focused on: when most Australian investors think they are diversifying globally, they are really just buying more US exposure.
In recent years, the private equity sector has increasingly cast its fund raising net to include individual investors who are aiming to generate strong risk-adjusted returns over the long term. With more investors considering the private equity opportunities on offer, it’s worthwhile delving into this opaque sector’s unique benefits and challenges.
After three straight months of global equity markets rallying driven by expectations that the Fed has paused its rate raising cycle, volatility is currently unusually and arguably unsustainably low. The historical data suggests it’s unlikely this situation will continue for much longer. In short, it’s probably the right time to prepare for volatility to return in the coming weeks or months.
Last year was another thematic-driven year with thematic ETFs gaining popularity among Australian investors. According to the 2023 ASX Investor Study, the proportion of Australian investors using ETFs has grown from 15% to 20% over the past three years.
As a new year kicks off, investors face an investment landscape which doesn’t resemble many past periods. After the fastest interest rate rising cycle in history, the impacts of higher interest rates are still filtering through whilst two wars continue to rage, US Government debt levels reach unprecedented levels, and global growth is expected to run at well below trend.
It’s been a challenging year for most investors with sharply higher interest rates leading to significant underperformance in asset classes which used to be regarded as defensive such as government bonds. The rules of the game have been turned on their head.
The recent Australian Consumer Sentiment Snapshot reveals Aussie consumers have one particular economic factor front of mind… inflation.
The inflation monster is impacting upon consumers’ disposable incomes, and more importantly it’s causing havoc in consumers’ minds where it’s doing most of its insidious work. It’s this growing awareness and fear of inflation which suggests we may be on track for inflation to trend higher than markets (and central bankers) currently believe. If that is indeed the case, the investment implications are significant…
Strange times are afoot in financial markets with contradictory assumptions being priced into various asset classes. Here’s a great summary of the confusion investors must contend with at present…
In the words of Charlie Munger, <i>‘If you're not a little confused about what's going on, you don't understand it.’
Most market experts believe equities are expensive right now while bonds are cheap. Despite this fundamental backdrop, the much talked about switch from equities to bonds hasn’t happened yet. During market extremities like this, it’s worth asking why fundamentals are being so ignored in favour of momentum.
You may have heard the classic joke about economists… Economists were created to make weather forecasters and astrologers feel better about the accuracy of their predictions.
US economists have certainly lived up to this stereotype of late. There’s rarely been a period when economists have been more wrong-footed by a strengthening economy.
The world of yield investing has been through a dramatic transformation in recent months as central bankers have raised rates at an unusually aggressive pace. Equity and bond markets have fast adapted to this new world order, but what happens if the current yield split between equities and bonds doesn’t apportion risk fairly?
Choosing what to invest in can be as difficult as maintaining a good diet.
We all know we should eat healthily, yet how exciting would life be if we were always munching down on a quinoa and kale salad, leaving no room for an expensive steak, or a bag of your favourite lollies? Likewise, reliable, lower-risk bonds generally won't keep you up at night with wild price swings, yet do they offer the necessary returns available in riskier and perhaps more exciting asset classes?
Commercial property has been a staple source of solid income returns and capital growth for decades, particularly in the unlisted world. However, a number of the strongest commercial property tailwinds have recently turned into headwinds, impacting upon the outlook for the various commercial property asset classes.
Should investors reduce their commercial property exposure, or are these headwinds a short term opportunity in the making?