Investments

Proving that no one has a Crystal Ball, economists and presidential pollsters alike are looking back on 2016 and wondering how they got it all so wrong. As AMP’s Chief Economist, Shane Oliver, recently noted, “2016 was perhaps remarkable for the things that many thought were obvious at the start of the year but did…

Every once in a while we hear investment suggestions that make us uneasy. It’s not that the suggestions are necessarily wrong or bad, more often than not they are based wholly in common sense. The problem is that the rules of common sense rarely ever apply to good investing.   AMP’s Chief Economist, Shane Oliver,…

As a country, we love property. Much of the “Aussie dream” involves owning a nice house on a quarter acre block of land. It’s also where we direct a lot of our investment money, with the hope that rental yields will help fund our retirements. Recently, there has been a lot of talk regarding the…

So Donald Trump will be the next President of the United States and to the surprise of many, the markets currently don’t look worse for it.  In fact, the markets have mostly recovered since its knee-jerk sell off as the election results unfolded.   As well, in the days since the election, Trump appears to…

America has voted, and in an extraordinary election upset Donald Trump has won the US presidential race.  So the question becomes: Now what?   Markets have been volatile, both in the lead up, and as a result of the election. We expect this to continue over the coming weeks amid speculation about his likely policy…

In a show of why it’s generally a good idea to invest with a buy and hold strategy in mind, the market has been making a rather impressive recovery since the Brexit triggered shock events throughout the world’s markets.   For the three months ending on September 30th, the All Ordinaries gained 5.3% to reach…

    It has been a tough six months for investment markets and times like these can be stressful.  No one likes to see the value of their investments decline and you may well have asked yourself if a change is warranted.   Whilst a more conservative approach may assist your short-term concerns you’ll find…

Evidence suggests the pain of losing $100 is felt more than twice as much as the pleasure of gaining the same amount (Kahneman and Tversky, 1992). This behavioural trait has led researchers to coin the term ‘loss aversion’.

“In the business world, the rear view mirror is always clearer than the windshield” – Warren Buffett.

We are all subject to behavioural biases, the most serious perhaps being a tendency to extrapolate recent developments into the future regarding investment returns. If the recent past has been poor many investors tend to assume this will continue going forward and as a result will want to sell out or vice versa. However such a mentality only serves to wrong foot investors in the market cycle.