I presented yesterday on the superannuation changes to a group of retired bank officers, and their incisive questions showed they are aware of the rules, but struggling with the interconnected detail. The stark realisation hit that action is needed in the next couple of months.
Last year was difficult for many active managers, with more underperforming their benchmark index than at any time in the last eight years. The main reason was the unexpected recovery in commodity prices as the Metals and Mining Index rose 53%. Banks also did well, such that managers underweight in financials and miners underperformed.
It's timely therefore to hear from three of Australia's leading fund managers in Roger Montgomery, Anton Tagliaferro and Hugh Giddy, stressing the need to look beyond one year and focus on quality companies with sustainable businesses, less subject to the vagaries of a volatile macro cycle.
Despite predictions of a property market correction, 80% auction clearance rates are supported by headlines like: "Marrickville house sells for $1.77 million above reserve". Seems extraordinary. The auctioneer had opened the bidding at $1.9 million, and the hammer finally fell at $3.87 million. But when you look deeper into the story, you read the house is on a large block of land surrounded by apartments, and it will undergo substantial redevelopment. Not your average house.
There's been a steady trend among large super funds to insource asset management, and while it has strong rationale in some cases, Jonathan Rochford paints another picture. On asset allocation, George Bijak explains a signal he uses to decide when to take risk off the table. And an exclusive look at an Investment Trends Report on High Net Worths shows how they are investing.
Articles on the coming super changes are among our most popular at the moment, and Rick Turner and Monica Rule comment on another issue that has crept under the radar.
Let's conclude with an upbeat quotation from Warren Buffett's letter this week: "From a standing start 240 years ago - a span of time less than triple my days on earth - Americans have combined human ingenuity, a market system, a tide of ambitious immigrants and the rule of law to deliver abundance beyond any dreams of their forefathers." Yes, it's a great time to be a wealthy US investor, but let's hope they can share the gains more equitably in future.
This week's White Paper from Accurium explains why SMSF trustees will live longer than average Australians, and the need to allow for greater longevity in retirement savings plans.
Graham Hand, Managing Editor
The latest insights and ideas from hundreds of market experts
Newsletter Edition 192, 3 March 2017
What should you do next?
by Roger Montgomery
Sticking to a value-driven investment strategy is difficult in a market fuelled by hope and buoyant expectations. At what point should investors forego the equity market rally to prepare for a possible correction? Read more…
Post-Trump, have markets really changed much?
by Anton Tagliaferro and Hugh Giddy
Is it better to position a portfolio with an over-reliance on economic growth expectations, or find companies winning market share, cutting costs, restructuring and acquiring independently of GDP hopes? Read more…
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SMSF Retirement Insights, February 2017
A thought-provoking study on the life expectancy of SMSF trustees. A healthy 65-year-old SMSF couple wanting a high probability of not running out of money should use a planning horizon of age 100. Read more.