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A growing investment trend that is big in North America but still emerging in Australia is Life Cycle Investing. Life cycle investing aims to invest aggressively in savers’ early lives to reduce the risk of being left with volatile asset valuations in the lead up...
Investors who are new to the bond market are often a little confused by the relationship between bond yields and bond prices. The yield on a bond has gone from 4% to 3%. Is that a good or bad thing? The answer is it depends. If...
Looking at the question “hedged or unhedged” there are arguments both ways, mostly based on how the Australian dollar performs. In simple terms, if you think the Australian dollar is going to go up in value against other currencies, you are going to see your offshore...
In Australia, management fees charged to savers by investment and superannuation managers get a lot of air time but in fact they are actually less than half the story. The most important element for investors is not fees but net returns, i.e. what’s left for the...
Imagine your favourite high quality product. It might be coffee beans, avocados, books by a famous author or a gadget. Now, imagine this reliable consumer product drops it’s price by 10%, 20% or more. What do you do? Option one: wait until it’s price goes back...
There are several definitions of Alternative Investments but there’s one thing they are not: conventional mainstream investments such as shares, cash and bonds. They’re specifically designed to be as uncorrelated as possible to the usual “market”, that being shorthand for the sharemarket. If possible, Alternatives should...
Many investors make the mistake of putting all their financial eggs in one basket. If anything goes wrong with that one product or asset they are in serious trouble. That’s why, as their savings increase, they should diversify or widen out the type of their...
What are franking credits and why are they important to investors? Not everybody understands how dividend franking works but a huge number of Australian investors, particularly retirees, are the comfortable beneficiaries of a system brought in by Treasurer Paul Keating in 1987 to eliminate the double...
What is fixed income? Many sharemarket investors are startled when they are told that the global fixed income market is more than twice the size of all those sharemarkets put together. It doesn’t resonate quite so much with retail investors since the big part of the fixed...
What is an equity? It’s just another name for a share in a company, most usually listed on a stock exchange. But its name is useful in explaining more accurately how a share comes into existence. It’s the opposite of debt. When an entrepreneur wants to launch a company...
