The impacts of interest rate hikes on consumers are well known; higher interest means that mortgage debt servicing costs will go up which is negative for consumer spending. Rate hikes are also bad news for home prices, which will create another negative for households via the destruction of wealth and the associated “wealth effect”. Housing …
Once a staple investment allocation, the traditional balanced portfolio of shares and bonds has had some challenges in delivering positive returns in today’s market environment. Institutional investors, such as superannuation funds and endowments have been investing in alternatives for many years and it is a rapidly growing asset class in the global investing landscape. Individual …
It’s natural to feel nervous when markets fall. News about inflation and rising interest rates may prompt you to make an emotional investment decision. But history tells us that markets trend upwards in the long run – and switching investment options at the wrong time can have a negative impact on your overall long-term investment …
Up until the 1980s the dominant theory was that financial markets were efficient. In other words, all relevant information was reflected in asset prices in a rational manner. While some think it was the Global Financial Crisis that caused faith in the so-called “Efficient Markets Hypothesis” (EMH) to begin unravelling, this actually occurred in the …
Pleasingly, global share markets fared well in October and recovered most of their lost ground from September. Locally, the S&P/ASX 200 Index re- turned 6.0%. The sharp reversal in sentiment was typical of this year; market volatility has picked up meaningfully over the past few months, resulting in substantial swings in equity prices. Fixed income …
From time to time, market movements may cause your super balance to fall. While this can be alarming, you’ll find that it usually recovers in due course. However, if you feel like you need to make some adjustments to your super, here are three things to think about first. Consider how comfortable you are with …
The human brain is an incredibly powerful processing unit. Every day we make numerous judgements and decisions – hundreds if not thousands if you conclude everything we do is an individual ‘decision’. As the human brain has evolved, in part due to the increasing complexity of our environment, it’s developed little short-cuts, or ‘heuristics’. These …
Aussies are living longer than ever before, with men expected to live until age 80 and women until age 85. However, an increased life expectancy also means Australians may spend longer in retirement than previous generations, and in turn, need more money to fund retirement during those extra years. When you’re retired and no longer …
Sharp share market falls are stressful for investors as no one likes to see their investments fall in value. But at times like these, there are number of key things for investors to bear in mind. Compounding Compound interest is magical! The value of $1 invested in 1900, allowing for the reinvestment of dividends and …
Exchange Traded Funds (ETFs) have been available on the ASX for over 2 decades, but in recent years, this category’s variety and representation within Australian portfolios have grown rapidly. By offering exposure to different global markets, industry sectors and strategic themes, as well as non-equities asset classes like bonds and commodities, ETFs can provide relatively …