Manufacturing slowdown vs recession
ON Oct 1, the US Institute of Supply Management Manufacturing data came out much worse than expected, causing a 2-day drop of 2.9 per cent. The figure grabbed financial news headlines, as the release of 47.8 was much worse than the 50.0 expected. Any number below 50 signals contraction in...
Bonds that eat your money
THE phrase 'This Time it's Different' is described as the four most dangerous words in investing. They are usually uttered at bubble peaks to explain a new paradigm in investing, cementing a trend that has been in place for years and is expected to keep up its run in the future.
When the pursuit of wealth does not bring happiness
IN almost three decades of managing money, all our clients had targets to grow their wealth by multiples. Clients with $2 million targeted about hitting $10 million and retiring. The ones with $10 million had ambitions of retiring with $200 million. The ones with $200 million wanted to become...
Two critical aspects of an investment that are overlooked
IN every crisis, fortunes are lost. While the exact circumstances are specific to each situation, the primary reason is often too large a focus on illiquid investments, and not assessing the assets' fragility during a crisis.
Double or nothing
I WAS getting an update on one of my family investments in 2010, by an established private equity firm. This was the first visit after having invested for five years, as the marketing salesperson was promoting their next fund.
Are low-volatility returns too good to be true?
STARTING in 1990, an exclusive investment fund produced an enviable track record. Over the next 18 years, it would return 11 per cent per annum (p.a.) Even better, during this long track record, its worst performing month was -0.64 per cent. On average the fund had one negative month per year....
Yield curve inversion = Imminent recession?
BEARS love indicators to justify their gloomy outlook. The aptly named "Death Cross" is one of the favourites of technical analysts, while an inversion of the yield curve is a favourite of fundamental analysts and economists.
Investor pessimism: is the world outlook getting worse?
THE queue was ten-children long, when the first one in line passed out, causing some commotion. The second child went through without any problems.
When the market does not react the way you expect
"DO as I say, not as I do" was attributed to preachers, but would work just as well for the investment advisory business....
Your investment outlook vs the consensus one
IT'S a good idea from time to time to pause and assess how similar your investment outlook is to the consensus of chief economists and other assorted forecasters. The beginning of the year is a perfect time to do this, as the flood of reports titled "Outlook for Next Year" usually...
An investment strategy that consistently underperforms
THERE'S a popular investment strategy that consistently underperforms the market. You are unknowingly likely to be allocating part of your investment portfolio to this strategy, whether directly or indirectly by owning some of the many funds that follow it....