How often are we taken in by the "Experts", "Gurus" and similar "Talking Heads" who are wont to be seen as seers and prognosticators? They appear on our televisions and in the newspapers that we read and are are a dime a dozen on the popular financial internet sites and will tell us that "the … Continue reading Ignore the “Experts” and make peace with uncertainty
This weekend my attention was drawn (thank you to PSG Asset Management's Shaun le Roux) to an article on the FT website with the title above. There is no doubt that many tracker funds and ETFs have had very strong performance in recent years as we have seen a powerful momentum trend push the prices … Continue reading Index trackers break basic rules of portfolio management
Much has been made of how concentrated our local All Share Index (ALSI) is and how certain companies (like Naspers) have a significant impact on movements of the index. But the ALSI is not unique. The Dow Jones Industrial Average also called DJIA, or simply the Dow, is a stock market index, that shows how 30 large publicly owned companies based … Continue reading How do you like THEM apples?
Investors frequently want to know what return they can expect from an investment. This is a normal question and the answer is crucial in managing their expectations. An investor who is placed in a product that fails to meet their expectations is sure to be unhappy and likely to want to switch out of it … Continue reading Average returns are not normal
GMO have released their monthly forecast of what they believe the probable asset class returns will be over the next 7-years. Comment: Asset class / index views are a broad generalisation and should not be interpreted as meaning that all/every component is the same. Within each of these asset classes one will find assets which … Continue reading GMO’s 7‐Year Asset Class Real Return Forecasts
Writing in the latest PSG Asset Management quarterly newsletter my friend and former colleague, Philipp Wörz has highlighted that it's not just foreign asset managers who think that developed market valuations are starting to feel quite stretched, but local managers are very aware of this too. "Global equities have been in a bull market ever … Continue reading PSG: Be selective when investing offshore and don’t discount South Africa
According to a media release yesterday from ASISA*, living annuity policyholders withdrew on average 6.62% of their capital as income in 2016, which represents a marginal increase in the 6.44% living annuity drawdown rate recorded for 2015. An increase in the drawdown rate is concerning in an environment of relatively meek domestic returns over the … Continue reading Living annuity drawdown rates up in 2016