Learning from successful professional fund managers is often a shortcut to better investment results. It’s equally informative when there’s a noteworthy shift that brings a previously successful investment strategy into question. Enter the Dalio dilemma.
Index concentration is increasingly becoming a concern for investors worldwide.
Consider the S&P 500 Index, the most popular benchmark for US stocks. Over the past decade, the top 10 companies' share of the index's market value has surged from 14% to 33%. This means investing in the S&P 500 largely hinges on the performance of these top 10 companies, the majority of which are tech giants.
Ask most wealthy people how they built their wealth, and the answers you’ll receive are likely to be obvious and somewhat unexciting rather than sounding like the secret keys to a kingdom of wealth. But therein lies the truth of wealth-building … it’s about taking small, mundane steps in the right direction over the long term.
The mortgage fund asset class has grown and matured in recent years. For good reason. Mortgage funds often offer investors attractive risk-adjusted returns by virtue of their superior yields. But as with all asset classes, not all mortgage funds are created equal. The recent challenges experienced by GEMI Capital’s investors provide a timely reminder of what can go wrong in this asset class.
Global tech companies, once focused solely on rapid growth, are now adopting a strategy typical of more traditional value businesses — issuing dividends.
Meta's introduction of its maiden dividend earlier this year marked a significant departure from the tech sector's usual emphasis on buybacks. Shortly after, Salesforce, Booking, and Alphabet followed suit, announcing dividends for the first time.
Financial markets thrive on long term correlations holding for the simple reason it provides high-probability context for investors to make investment decisions. So when a long term correlation breaks down that most investors thought made financial and intuitive sense, it’s generally worth delving deeper.
Multi-asset funds fell out of favour during the prolonged low-interest-rate environment following the 2008 global financial crisis. However, the landscape shifted post-COVID with heightened economic worries prompting a resurgence in multi-asset strategies.
It’s a well-known fact in investment circles that the pain of a losing money greatly exceeds the positive feelings associated with investment success. The cognitive bias that explains this is called loss aversion.
Until recently, investing in ETFs typically meant opting for a passive, index-based approach, foregoing the benefits of active management. However, 2023 saw a marked acceleration in active ETF uptake across the globe.
Corporate bonds are once again popular with Australian and global investors alike. With markets expecting the RBA and the Fed to start cutting rates in the coming months, investors have been increasing their corporate bond exposure to lock in the highest yields available in recent years. We investigate whether or not this is a wise strategy below.
You may have heard the joke about central bankers … how many central bankers does it take to change a light bulb? None. If the light bulb needed changing the market would have done it already. It won’t surprise you to hear not many central bankers find this joke funny. But what if the light bulb that needed changing was persistent inflation, and what if the market believes it can relax as the RBA has already changed that light bulb?
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