What is the risk?
AMP Capital's Dr Shane Oliver looks discusses the potential consequences of a deflationary spiral versus rising inflation on your hip-pocket. Enjoy. Read more here Rick Maggi (Westmount. Financial Solutions.)
15/11/13: China on track
Better than expected...
China's growth cycle is stabilising and that's good news for Australia's economy, our markets, and possibly your super fund. AMP Capital's Dr Shane Oliver weighs in on recent fears over slowing Chinese growth with a typically calm, well balanced commentary. As always, his article is easy to read and not overly technical. Enjoy! Read more here Rick Maggi (Westmount. Financial Solutions.)
04/11/13: Avoiding excess risk in a low-interest environment
Don't upset the fine balance...
The strong growth in the prices of many Australian shares over the past year is attributable, in part, to the buying of yield-hunting investors. A number of high-yielding financial stocks, for instance, are trading at or near to record highs.
Predictably, in the prevailing low-interest environment, many investors are now turning to more concentrated portfolios of high-yielding shares in an effort to maintain their investment yields and their lifestyles. But, unfortunately, this pursuit of yields comes at the cost of undertaking a higher level of risk for an investor's overall investment portfolio.
Rather than exposing portfolios to higher risk and upsetting carefully diversified portfolios in a hunt for income, investors should focus more on a portfolio's total return – that is the combination of its income and capital growth. With this approach, investors in need of more income than produced by a portfolio draw an amount taken from their portfolio's total return, taking into account cash-flow and capital appreciation.
In this way, investors can remain on track to achieving their long-time goals without upsetting their portfolio's diversification and without taking greater risks. Rick Maggi (Westmount. Financial Solutions.)
08/10/13: The US budget standoff
Here they go again...
With US Republicans and Democrats going head to head over budget and debt negotiations, the rest of the world looks on powerless and bemused. Beyond some of the media hysteria, in this article AMP Capital's Shane Oliver provides a balanced, sober look at the debt ceiling standoff and the likely outcome. Read more here Rick Maggi (Westmount. Financial Solutions.)
05/09/13: Australian profits, the economy and shares
Another from Dr Shane Oliver
In this update, AMP Capital's Dr Shane Oliver takes a close look at where we are right now in the cycle, company profits and the risks and opportunities going forward. In a background of growing worry over Australia's economy, this is a timely and poignant article. Read more here Rick Maggi (Westmount. Financial Solutions.)
01/09/13: The US fiscal cliff, debt ceiling and economic outlook.
Oliver's Insights for January 2013
This note looks at the deal to avert the US fiscal cliff along with its debt ceiling and broader economic outlook. Generally pretty positive for 2013 (easy reading). Enjoy! Rick Maggi. Read here
19/08/13: The Broccoli & Pizza Portfolio
Insights from Dimensional's Jim Parker
It's often hard to give up on the idea that investment should be exciting - an interesting article from Dimensional VP, Jim Parker. Rick Maggi Read more here.
05/08/13: Consistency over the long term
Australian and international equities. Which sector performed the best?
Picking the market sector that will outperform and timing it to maximise returns is a difficult thing to do. Produced by Vanguard Australia, the following tables graphically illustrate the performance of different sectors (within the Australian share market) and the performance of different regions (international shares).
The take away is simple one. Building a portfolio within broadly diversified equity funds at the core can help lower risk and smooth out peaks and troughs in returns over time. Rick Maggi
08/08/13: The Federal Election
Implication for investors...
In this article AMP Capital's Dr Shane Oliver takes a look at potential implications for investors as move towards and beyond the Federal Election. Interesting reading. Rick Maggi. The Federal Election
26/07/13: The Vanguard Index Chart 2012-13 (Westmount Clients Only)
Some eye candy...
Every year Vanguard releases it's 'Vanguard Index Chart' and it's always worth a look. The chart illustrates what the value of $10,000 invested twenty years ago might be worth today had you invested in various sectors such as Australian shares, commercial property, cash etc. Along the twenty-year journey you see the impact of important events (both positive and negative) such as 9/11, US subprime and the Japanese Tsunami on markets and the value of the original investment. Vanguard also includes a second graph, called 'the power of diversification' which shows the performance of each sector in percentage terms, every year, for the last twenty years.
Seeing visual proof of market volatility (all of them), each having their day in the sun, followed by less than happy times, serves as a potent reminder of the importance of diversification and patience. We can all do with some gentle encouragement, especially during tougher, challenging times, so I like to keep this chart on my wall! Rick Maggi. View charts here
26/07/13: New normal, old story
'Outside the Flags' by Dimensional VP, Jim Parker
"Low returns are shaping as the new normal" That was the headline in The Australian Financial Review in early July 2012 in anticipation of another grim year on global equity markets for Australian investors. How did that forecast turn out? Rick Maggi Read more here
25/07/13: Investment outlook after a strong financial year
Dr Shane Oliver...
The last financial year saw returns of over 20% from Australian and global shares, so what's in store for 2013/14? Rick Maggi Read more here
12/07/13: Second guessing
A commentary from Dimensional's Jim Parker...
Markets have had a rocky time lately. Is this something to worry about? Rick Maggi Read here
02/07/13: Happy New Year!
New Financial Year. Fresh Start.
Want to be kept informed in real-time? Tired of stale, irrelevant websites and blogs? Subscribe to our free updates here. Happy New Year! Rick Maggi & Staff.
24/06/13: The Fed, Interest Rates and Bonds
Market Update...
Recent market falls and noise around the US Federal Reserve's potential moves going forward has been rattling investors. The following is a candid and easy to understand article on the subject from AMP Capital's Dr Shane Oliver. Rick Maggi. Read more here