‘Volatility comes in clusters’: Dermot Ryan

‘Volatility comes in clusters’: Dermot Ryan Investors glued to their share portfolio screens recently following the abrupt share market selloff should expect to experience more of the same in the months ahead, according to Dermot Ryan, AMP Capital Income Equity Fund Co-Portfolio Manager.While more volatility can mean higher levels of anxiety for some investors, it can also bring opportunities to those able to stay calm during these periods, Ryan adds. “Volatility, where we haven’t seen …

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Correction time for shares?

Correction time for shares? Key points The US share market is long overdue a decent correction. This now appears to be unfolding and may have further to go as higher inflation, a slightly more aggressive Fed and higher bond yields are factored in. This will impact most share markets including Australian shares. However, in the absence of an aggressive 1994 style back-up in bond yields or a US recession – neither of which we expect …

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Beware the double-edged sword of US tax reform

Beware the double-edged sword of US tax reform Tax reform in the United States has helped to spur on global economic growth, but investors should be aware of the double-edged sword that comes with the added exuberance, as already expensive share markets continue to edge higher. While company earnings growth in the US – and indeed in Australia – are generally supportive valuations, according to Diana Mousina, AMP Capital’s Senior Economist, the continued strong run …

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Higher global inflation and higher bond yields – what’s the risk and implications for other assets?

01 February 2018 Higher global inflation and higher bond yields – what’s the risk and implications for other assets? Key points Rising global growth and rising commodity prices indicate the risks to inflation are gradually moving to the upside. This is most acute in the US with the Fed likely to raise rates more than the market expects this year. This supports the view that the 35-year super cycle decline in bond yields is over. …

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The risk shares and bonds will no longer correlate

19 January 2018 The risk shares and bonds will no longer correlate There is an old saying that “diversification is the only free lunch in finance”. While this adage is often wrongly attributed to Harry Markowitz, it does a great job of articulating the essential insight in his Nobel Prize winning research. What people who’ve followed Markowitz’s know is the attractiveness of an asset in a portfolio doesn’t just depend on its own expected return …

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Why we’re thinking about yield all wrong

Why we’re thinking about yield all wrong No doubt about it, institutions will have an edge over the Average Joe or weekend warrior when it comes to information and investment insights; financial institutions employ the best and brightest and draw on research garnered from all over the world using tools out of the reach of most of us individually. But there are times when it makes sense for individual investors to play to their strengths …

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Could last year’s strong equity returns keep on rolling?

Could last year’s strong equity returns keep on rolling? Aussie battler On the home front, the economic cycle in Australia is less advanced than in other developed economies. Activity remains subdued as housing investment moderates and consumers remain cautious on account of anaemic wages growth. Nonetheless, the preconditions for an improvement in growth are in place. Business confidence has improved and there is evidence of broad-based acceleration in business investment. At the same time, large …

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Investors found the “sweet spot” in 2017

13 December 2017 Investors found the “sweet spot” in 2017 It was a good year for share market investors in 2017, particularly for those who overcame the fear of a potential market correction and maintained exposure to global listed markets. Looking back on share market and asset price performance generally, the combination of solid global growth and profits and yet low inflation and benign central banks created a “sweet spot” for investors in 2017. Investment …

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What a banking Royal Commission means for investors and superannuants

13 December 2017 What a banking Royal Commission means for investors and superannuants A dip in the value of listed financial stocks including Australia’s Big Four banks the day the federal government announced a Royal Commission into the banking, superannuation and financial services industry, could be a sign of things to come for shareholders in the country’s most widely held institutions. The long heralded Royal Commission into the banking industry could have the effect of …

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2017 has been kind to investors

2017 has been kind to investors As we head towards the end of 2017, it’s worth taking a look at how investment markets have fared over the year. It turns out we’ve enjoyed a pretty good 12 months – especially if you haven’t had a significant chunk of your wealth tied up in cash. The last 12 months have been steady on a number of financial fronts. Even the official cash rate has remained …

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