Invest for my retirement Archives | BetaShares

Raising the benchmark: How and why fundamentally weighted indices have been outperforming

With the rotation out of high priced defensive income stocks in the Australian equity market in recent months – and toward sectors offering relatively better value, such as resources – fundamentally weighted indexing methodologies have again demonstrated their ability to outperform traditional market-cap weighted indices over time.
Dynamic value tilts through a fundamentally weighted index
We have previously discussed the merits of fundamentally-weighted indexing (FWI) methodologies over more traditional market-cap weighted indexing (MCWI) methodologies here, 

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Frankly it could be dear if you don’t give a damn – the value of franking credits

At yesterday’s meeting the RBA decided to keep official cash rates at the historic low of 1.50%p.a., and with the ‘little battler’ (our Australian dollar) still being resilient and trading between $0.75-$0.76 (vs. the USD), low cash rates look destined to continue for some time. As a result, the saver continues to be punished and the borrower rewarded,

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Managing risk: the toxic combination of market downturns and withdrawals in retirement

To help fund retirement in a world of low interest rates, retirees increasingly have to tolerate some level of risk in their portfolios – adding to the volatility of returns.  Combine volatility with the need to make regular withdrawals, and retirees are especially at risk of prematurely depleting their capital should a savage market downturn take place early in their retirement years. 

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