While typically considered benign, passive index investing can come with unintended consequences.
While typically considered benign, passive index investing can come with unintended consequences.
During the last 30-40 year investment period, investors have been spoilt by an unusually favourable period for investments and asset prices. Following the high inflation and low growth period of the 1970s – when stocks and bonds did very poorly – inflation pressures finally subsided as did high interest rates. Furthermore, we had a massive period of peaceful prosperity and globalisation, enabling lower prices and greater economic efficiency. This created excellent conditions for most asset classes to flourish and with it growth orientated static Strategic Asset Allocation (SAA) portfolios and low-cost index funds.
Welcome to the latest edition of The Lander Report.
In this detailed analysis by Dr Jerome Lander, you’ll hear the full story with compelling clarity, logic and insight.
Welcome to the latest edition of The Lander Report.
In this detailed analysis by Dr Jerome Lander, you’ll hear the full story with compelling clarity, logic and insight.
Welcome to the latest edition of The Lander Report.
In this quarterly video update, Dynamic Asset's Portfolio Manager, Dr Jerome Lander discusses the state of financial markets, portfolio insights and what this means for Financial Advisers and their clients.
Welcome to the latest edition of The Lander Report.
In this quarterly video update, Dynamic Asset's Portfolio Manager, Dr Jerome Lander discusses the state of financial markets, portfolio insights and what this means for investors.
Welcome to the first edition of The Lander Report.
In this quarterly video series, Dynamic Asset's Portfolio Manager, Dr Jerome Lander discusses the state of financial markets, portfolio insights and what this means for Financial Advisers and their clients.
The ASX200 fell roughly 10% in the financial year just finished, which included a terrifying 35% plunge and euphoric 30% rally in a 16-week period. This loss-making white-knuckle ride is not what investors seek, and has left many on the sidelines feeling cautious and confused.
The traditional risk-based investment approach, which determined how a client’s assets are invested based on their risk profile, aims to maximise returns for a given level of risk. Success is measured by comparing returns against market benchmarks, suggesting that investors should be pleased with negative returns, provided they are less negative than the benchmark! The approach also entails a high level of volatility that can decimate a client’s capital, particularly if they need to access their funds in the near term or lose faith in their investment plan and crystalise their losses.
Dynamic Asset Portfolio Manager, Jerome Lander, discusses the risks of the traditional risk based 'strategic asset allocation' - particularly during the very difficult market conditions we face today. He argues that unless advisers change the way that investor's money is managed, there's really no way to manage that risk.