The recent decline in equity prices has once again highlighted the importance of asset allocation and portfolio diversification.  As will be demonstrated in this note, although corporate bonds and hybrid securities have some exposure to credit risk, their valuations have held up relatively well during the recent period of equity market turmoil. This highlights their

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The recent surge in US bonds yields has caught the attention of investors worldwide and forced a re-think over the equity outlook.  This note suggests, however, that higher rates need not kill the bull market anytime soon, provided corporate earnings remain upbeat and inflation contained. Market comes around to the Fed’s thinking As evident in

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Although American based tech giants – such as Google, Facebook and Amazon – are already household names, it may surprise some investors to know that Asia has technologically leapfrogged the U.S. in several respects and has many successful tech megastars of its own.  As this note will demonstrate, these Asian tech tigers – exposure to

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Thanks to rapid technological advances, the global robotics and artificial intelligence (A.I.) sectors stand poised to significantly boost global economic productivity and redress worker shortages caused by population ageing over coming decades.  As this note will demonstrate, moreover, the robot revolution also offers the growth potential to reward investors who tap into this emerging global

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With the US labour market tight and inflation starting to lift, one similar historical episode that has attracted investor attention, and which may be instructive for today’s market, relates to the late 1960s.  At that time US wage and price inflation started to lift quite quickly, which eventually led to higher interest rates and a

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With solid global demand and ongoing supply side disruptions, oil prices could well remain reasonably firm over the coming year. If so, there may be investment opportunities in energy related ETFs. In this post, I examine the dynamics of oil and investment opportunities further. Oil Market Appears Tight Since bottoming in early 2016, global oil

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In meeting with clients over recent months, one of the common questions I’ve been asked has concerned the potential “income shock” to be faced by households given the apparently large number of interest-only mortgage loans that may need to be reset into principal and interest loans over coming years. This note suggests that while this

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With local inflation and interest rates seemingly entrenched at low levels,  this note suggests it now perhaps an opportune time for the Reserve Bank and Federal Government to reconsider the inflation target itself – especially as it now seems a little higher than the international norm. Lower for longer presents dangers Last week marked two

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Probably the biggest single macro-economic risk to the ongoing global equity bull market is a sudden upsurge in US wage inflation, due to its tight labour market. This could in turn see US interest rates move up much more quickly.  This note examines the risks. US labour market appears very tight The chart below outlines

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The performance of European and Japanese shares has generally lagged US shares since the global financial crisis, but they now appear to offer scope for outperformance, especially if the $US remains strong.  Furthermore, due to sector and demographic headwinds, any outperformance seems likely to especially favour exporters. Europe & Japan: Lagging the United States As

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