Category: Wealth Management

10
Apr
2008

Understanding Risk

Psychological research shows that people are systematically biased in their assessments of future
events; not only will the future be good, it will be especially good for oneself in particular.

All investors should have an understanding of risk based on an analysis of both their capacity for risk and their willingness to accept risk.

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01
Apr
2008

Are equities cheap?




18
Mar
2008

Paralysed by fear

It is becoming clear that investors are currently paralysed by fear and finding it difficult to make rational decisions in the face of unprecedented turmoil in international markets. In this article, I will attempt to explore some of the issues that investors should be considering in the light of recent market volatility as shown below:

Index

Year to Date Return

31/12/07 to 14/03/08

 

Local Currency %

Euro %

US S&P 500

-12.3

-18.2

Europe FT/S&P Europe ex UK

-16.5

-16.5

Ireland ISEQ

-13.5

-13.5

UK FTSE 100

-12.8

-16.9

Japan Topix

-19.1

-15.5

Hong Kong Hang Seng

-20.1

-25.3

Bonds Merrill Lynch Euro over 5 year Govt

3.3

3.3

Credit Suisse/Tremont Hedge Fund Index

0.1%

0.1%

     

Index Linked Bonds

Euro Index Linked Fund

3.74

3.74

Source: Bloomberg

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28
Feb
2008

Inflation and commodity investment

“Too much money chasing too few goods” – a basic, monetarist definition of inflation.

In the long run, inflation is generally believed to be a monetary phenomenon, i.e. it is attributed to growth in the supply of money. While in the short and medium term it is influenced by the relative elasticity of wages, prices and interest rates. The question of whether the short-term effects last long enough to be important is the central topic of debate between the Monetarist and Keynesian schools.

Honey, I shrunk your wage gain

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26
Feb
2008

Property or Equity? Which is the best investment?

Mark Twain said; “Buy land, they’re not making any more of it”

One question I am repeatedly asked is this: “which is a better investment, Property or the Stockmarket”.

As with so many things in life, the answer is “it depends”.
I have to agree with Mark Twain’s observation. Land is a finite resource, and we live on an Island. You don’t need a PHD in stating the obvious to realise that an investment in land or property should, over time, appreciate. Property isn’t a bad investment.

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25
Feb
2008

Does your Self-Invested Personal Pension (SIPP) offer real choice?

And does it matter?

The foundation of Modern Portfolio Theory was a 1952 paper, “Portfolio Selection” by Dr Harry Markowitz in which he established a theory explaining the best way for an investor to choose a portfolio. Modern Portfolio Theory is of such fundamental importance in investing that the economists that formulated the theory received the Nobel Prize in Economic Science in 1990. Asset allocation involves dividing an investment portfolio among different asset categories such as equities, commodities, fixed interest, cash, property and the process of establishing which mix of assets to use, is largely determined by investment objectives, time horizon and tolerance to risk.

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