Three recent research papers continue to grow our understanding of how behavioural traits impact on markets. The first provides insights into Warren Buffett's success; the other two examine the markets' response to earnings information.

However tempting it may be to focus our wishes on our own immediate desires, it is imperative this year that investors' wish lists take into account the big economic and policy picture.

The investment (as opposed to transaction) appeal of Bitcoins has grown and will grow. But we believe that Bitcoin will be very undesirable as an asset due to a very high degree of price volatility.

You know it's time to worry when the conservative Republican chairman of the Senate Committee on Foreign Relations warns openly that Trump could start World War III.

As some countries have shown, a market economy can take forms that temper the excesses of capitalism and globalisation, and deliver more sustainable growth and higher standards of living for most citizens.

The world has changed dramatically over the past three decades, but the analytical tools underpinning monetary policy haven't. The challenge is to develop new tools to fit the new world order.

The return of wage growth across the industralised world has significant implications for markets and central bank policy - and spells the end of the 30-year rally in bonds.

It is tempting to ask whether markets have entered a period of "irrational exuberance" and are heading for a fall. The answer is probably no.

"If it is earned here, it should be taxed here" is the title of the ad about laws on multinationals transferring profits offshore. What is interesting is the closing claim in the ad.

While some still firmly believe that values and ethics have no part to play in investing, the tide is turning. Values play a vital role in investment and business decisions - and, increasingly, investors care about more than just financial returns.

There is evidence to suggest that the uptick in global growth and developments in Saudi Arabia will push the price of oil as high as $80 in the coming year.

For the past two centuries, a "double bust" (in commodities and capital flows) has led to a spike in sovereign defaults. Yet they have risen only modestly since the peak in commodity prices and global capital flows around 2011.

During the past three months, a salient topic of debate has been whether the so-called Phillips Curve is relevant in today's disinflationary environment. The debate is important to investors.

Human beings are subject to behavioural biases, which negatively affect their ability to make rational choices. These behavioural biases create market inefficiencies that active investment managers can exploit to generate alpha.

Two recent books indicate that a quiet revolution is challenging the foundations of economics, promising radical changes in how we view many aspects of organisations, public policy, and even social life.

With the appointment of Jerome Powell as the next Chair of the United States Federal Reserve Board, Donald Trump has made perhaps the most important single decision of his presidency.

Stock markets are thriving in a "Goldilocks" environment. But there is a growing risk of the US economy over-heating. Investors should keep a close eye on inflation and wages data.

Since President Xi Jinping's update at the National Congress of the CCP this month, commentators have furiously debated the theme of "China rising" and Xi's concentration of power in his own hands. They are missing the point.

President Xi Jinping's political report, delivered on the opening day of China's latest Communist Party congress, was a high-impact event. Three conclusions from Xi's address are particularly important.

Many investors claim to follow a contrarian style. But it is important to distinguish between those who unthinkingly dismiss orthodox approaches, and those who meaningfully challenge them.

Despite all the talk, the fact that Australian banks loan books are heavily concentrated in low risk residential mortgages should be a source of comfort, not fear.

The Fed will not achieve balance-sheet normalisation until 2022-2023 at earliest. With more than $6tn of excess liquidity still sloshing around global financial markets, that's asking for trouble.

As inflation re-emerges and central banks wind down their QE programs, yields will rise substantially. The key is not to lose money while medium-term ideas play out.

Many observers conclude that the Fed is behind the curve because a central bank supposedly should not persist with a negative real policy rate at full employment. That is correct - but the question remains "how much?"

Since mid 2016, the global economy has been in a period of moderate expansion - yet inflation has not picked up. Why?

Simply observing the concentration inherent in the index and reducing Australian Equity weights is throwing the proverbial baby out with the bathwater. It’s nuts and you can clearly see it’s nuts.

US President Donald Trump has once again raised the possibility of a trade conflict with China. Getting tough on China while ignoring the consequences could be a blunder of epic proportions.

Twenty years ago, I predicted that the Digital Revolution would cause productivity growth to accelerate and inflation and interest rates to fall for a very long period. We now believe this trend will continue for at least another 10 and probably 20 years.

The US has run chronic current-account deficits for almost two generations. Pointing the finger at surplus countries is getting old.

Portfolio construction practitioners should prepare for an environment which is less favourable for their equity and long bond exposures.

To outperform the market you have to invest in something different. Investment returns are best captured through the exploitation of anomalies – the truly different mispriced opportunities.

With higher returns than term deposits, and less risk than hybrids and equities, corporate loans add up to an attractive alternative in a potentially rising interest rates environment.

For a portfolio’s position to add up robustly, it must reflect future risks and respond to how these change through time.

Investment managers around the world believe their style is the holy grail of generating returns ahead of the market. But you can’t beat the market using a simple rules-based strategy.

China's digital economy will soon surpass that of the US. MSCI A Share inclusion in 2018 will allow foreign investors to participate in China's fast growing e-commerce sector.

Xi Jinping would like to oversee China’s rise to regional dominance - but the US, Japan and India will not allow China alone to dominate the region.

Introducing an active global credit investment into portfolios adds to an investor's opportunity set, and can offer alpha opportunities.

Managing carbon risk within portfolios is increasingly a decision integral to risk management and the pursuit of superior long-term risk-adjusted returns.

Portfolio construction must stay relevant. While traditional country and sector allocations may have worked in the past, today's new environment requires a global and flexible approach.

Public policy matters to performance at every level. Yet modern politics faces a crisis of ideas, relevance and trust. The trick is to let markets do their work.

In a world where 0.6%pa is top quartile, winning is difficult and losing is easy. There are big gains to be made in surprising places. Even 1%pa adds up to a huge difference over time.

When it comes to investing across the capital structure, it all adds up, but debt and equity’s relative contributions to returns shift markedly through time.

The number of publicly listed companies in the US has roughly halved since 1996, a phenomenon which spans other regions. The trend is likely to persist, and it has significant implications for investors.

Ensuring your investment process has the flexibility to incorporate sustainability factors all adds up to improved longer term portfolio performance outcomes.

Building genuinely diversified portfolios, where every investment represents an active decision, makes for a champion team of investments.

Investing is simply deploying savings to generate returns, yet abstractions such as indices are creating unnecessary complexity. Nowhere in an effective investment process need there be any reference to the prospects for a market index.

Loss avoidance and simplicity are highly attractive to the human mind. However, uncertainty is often the source of superior returns and creativity can be a key source of alpha, delivering idiosyncratic outcomes.

In a developed world full of challenges, a consistently applied process that focuses on both the cyclical and secular outlook is something that every investor can apply.

Janet Yellen says another crisis is not likely, yet signs of stress are growing and valuations are stretched. Investors need a strategy for weathering a storm, whether or not there is one on the horizon.

Shifts in economic and trade regimes and turning points in markets provide asset managers the opportunity to capitalise on short-term distortions in asset prices and to invest in companies that could be winners in the long term.

Two assumptions are under challenge - that the past offers a reliable guide to the future in terms of asset class returns; and, that traditional relative risk/return approaches can still deliver the returns investors need.

Fund flows suggest that, in aggregate, passive managers are winning the battle against their active peers. But active bond managers have a demonstrable track record of outperformance.

With US unemployment at a 15-year low, the US Federal Reserve has greater scope to begin shrinking its balance sheet. Investors should set aside their fears, and remember that the Fed’s balance sheet provides little indication about what will happen to longer term interest rates.

Having grown strongly over the last 20 years, a new study shows infrastructure investment will continue over the next two decades. It is a secular trend with long-term opportunities.

The growing belief that the US has entered an era of permanently low economic growth, due in large measure to an alleged 50% reduction in productivity growth, is wrong. Both real growth and productivity growth have been strong, not weak.

After six months, we can more confidently assess the prospects for the US economy under Trump's administration. Like his presidency, paradoxes abound.

Recently, Fed Chair Janet Yellen expressed dismay that inflation has remained persistently below the Fed's target of 2%. Will low inflation derail the Fed's exit strategy?

Forecasters find it difficult to resist superimposing the outcomes in major crisis-battered developed economies on China. It has been the wrong approach in the past; it is wrong again today.

Two new studies provide widespread evidence of mispricings/irrationalities across world equity markets. One in particular provides valuable insight into managing risk in equity investing.

Next month will mark the tenth anniversary of the GFC. Why have so few of the policies that might have ameliorated economic conditions and alleviated public resentment been implemented since?

In a low growth, low inflation, low interest rate and low yield environment, a cyclical economic upturn presents opportunities in asset classes such as equities and real estate

Discretion in setting monetary policy has had a checkered history. Ironically, the debate on rules vs discretion is heating up just as the FOMC sets a course for unwinding its extraordinary policy measures.

We ignore history at great peril. The latest disappointment for inflation-targeting central banks is really not a surprise after all.

Analysis of 5 international stock markets shows no correlation between stock returns and the political party in power.

Yes, rates are unusually low. But to describe that as unnatural shows a lack of understanding about how the world works and a refusal to accept that maybe the world has changed.

Masterclass NZ is a post-graduate extension program focused on contemporary issues that are fundamental to building better quality portfolios. The one-day program is comprised of five research-based, active learning sessions:

Fed officials must take the long view and hence tend to believe they can engineer a graceful exit. Their plan is somewhat akin to 'cap and trade' schemes for weaning the world of pollutants.

In the next year, a more robust and persistent global recovery will depend largely on whether policymakers avoid mistakes that could derail it.

Wharton's Jeremy Siegel and Yale's Robert Shiller squared off in a recent presentation about the outlook for equity returns.

Investors should keep a close eye on relative valuations. Recent data suggests that momentum and value are trading cheaply in many markets, with low beta substantially over-priced.

China is upping the ante on its connection to an increasingly integrated world, running against the grain of the populist anti-globalisation backlash that is brewing in many developed countries.

The number of indexes has exploded and now exceeds the number of stocks in the US. But overall, the US stock market is still dominated by active management. And 96% of index products are of insignificant size.

Overall stock market risk has declined modestly in the last 80 years, but the nature of risk has changed greatly. The risk stemming from market mistakes and, possibly, from irrationality has risen significantly.

Trump's election triggered a global stock market upswing, on confidence that he would be able to fulfill his pledge to reignite US economic growth. But how much is Trump really likely to be able to get done?

Despite increasing global political risk, the probability of outright war is paradoxically lower than it might have been at any previous period in history.

Despite proliferating geopolitical risks, global financial markets have reached new heights. Markets have trouble pricing "black swan" events, the "unknown unknowns" that are unlikely, but extremely costly.

In a world of risk-on/risk-off investing, it is important for investors to know where true risks lie and where they do not lie. In fact, macroeconomic risk has decreased by well over 80% during the eight decades.

In a century of Federal Reserve tightening cycles, typically, the Fed has tightened too much and/or for too long. The current tightening cycle will not end any differently.

The pendulum of world economic growth has swung - by 2018, the developing countries will have a greater share of world GDP (59%) than developed countries (41%). New? Absolutely. Normal? Not even close.

The centrist Emmanuel Macron's success in the first round of the French presidential election is likely to re-energise Europe.

The Fed's talk of a symmetrical inflation goal played well to markets when they were in the throes of the reflation trade. Markets are now flipping to the conclusion that transparency amounts to dovish policy.

The market is expecting a big pick-up in earnings from Trump's business friendly tax cuts, deregulation and an infrastructure spending boom. But will it be enough?

Trump is learning that he is hemmed in by the same constraints as Obama's administration. As with Obama, the agent of change is turning out to be an agent of continuity.

On Wednesday, Theresa May triggered the mechanism for UK to leave the EU. But the UK's relationship with the EU has already changed, says UK MP Peter Lilley.

Another growth scare has come and gone for the Chinese economy. The near-term prognosis for the Chinese economy is far more encouraging than most had expected. China is actually making rapid progress on the road to rebalancing.

As Britain embarks on the process of disentangling itself from the EU, the country will regain control over national law and policy making, raising opportunities to implement new models.

Contrary to popular belief, western living standards have not declined in recent decades. Rather, government statistics failed to capture a key element of real GPD growth.

Global ageing will have significant effects over the next few decades as it reduces the economic power and geopolitical influence of developed nations, in turn increasing the risk of social upheaval in the developing world.

Trump promised a raft of sweeping economic-policy changes - but has quickly discovered that the US political system is designed to prevent rapid, large-scale change. So what will an impatient president do?

In thinking about the future of growth, and the opportunities that continued growth will open up for all of humanity, we should reflect on how far we have come.

What Donald Trump's rise to the US presidency portends requires unraveling three mysteries - because there are three versions of Trump.

History indicates a reasonably graceful exit from ultra-low interest rates is possible - and that investors can weather the storm with the right strategy. Let's sort out which risks are worth worrying about and which are not.

Markets Summit 2017 featured a stellar lineup of international and local experts offering their best high conviction idea/thesis on the opportunities and risks ahead as the winds of change sweep through economies and asset classes - and the implications for portfolios.

Monte Carlo analysis is commonly used to evaluate retirement spending plans - but our cognitive and behavioural biases may interfere with proper interpretation of the results.

A recent, widely circulated article suggested the major Australian banks are overpriced. But including the effect of imputation and a view on interest rates makes a huge difference...

This paper revisits the relationship between economic growth and equity market returns. Much of the literature has focused on the US so this analysis includes Australia and the UK, too.

Markets Summit 2017 delivered 20+ high conviction ideas on how the winds of change are affecting the outlook for economies and asset classes - and the implications for portfolios. Here are our key takeouts.

The tectonic plates of the political and economic landscape are rupturing. Brace yourselves for a wild and entertaining ride...

US-China relations under President Donald Trump will be turbulent. This will be testing for an economically interdependent region.

Applying discipline, fact and data to the assembly of a portfolio leads to investment opportunities overlooked by many who pursue their 'feelings' rather than data.

Markets have run hard in recent months on speculative exuberance. However, the critical question is will President Trump prove to be a tailwind, or a headwind for the global economy?

The tectonic plates of the political and economic landscape are rupturing. Brace yourselves for a wild and entertaining ride...

Bond-sensitive stocks now form a record 60% of the ASX's market cap. Australian equity investors should hold a greater proportion in real-asset stocks and reduce exposure to artificially inflated financial stocks.

US-China relations under President Donald Trump will be turbulent. This will be testing for an economically interdependent region.

As 2017 began, there was (once again) an air of optimism that interest rates are about to return to normal. This optimism dismisses the significant structural headwinds that are prevalent.

When positioning a multi-asset, portfolio for the medium-term, there are four fundamental decisions we must make now. They are, in some cases, interdependent.

Money velocity is accelerating in the US and UK, as commercial banks rediscover their appetite for risk and the two economies continue to normalise. The shift has significant implications for asset allocators.

A-REITs may face headwinds over the next two years, but total returns will likely remain positive, before returning to a more normal level of 8% to 10% per annum.

There is a significant opportunity for actively managed Australian government bonds to continue to provide positive returns, while protecting against the storms of uncertainty.

Bond investors have enjoyed a multi-decade bull run in yields, fuelled by unsustainable post-GFC stimulus, but "the times they are a-changing".
It's time to rotate into loans!

For the foreseeable future, earnings of the infrastructure assets asset class, if defined in a disciplined manner, should continue to be reliable.

A large number of small, high conviction positions will lead to better outcomes for portfolios compared to a small number of large, high conviction positions.

Investors should focus on asymmetric opportunities with a margin of safety and multiple ways of winning. Developed Asia and Europe offer these in abundance.

The biggest portfolio risk in 2017 will be over confidence in assigning scenario probabilities. Don't confuse the winds of change with "hot air" when it comes to portfolio construction.

Partners Group's Charles Dallara, Lazard's Ron Temple, and Magellan's Hamish Douglass debate the winds of change sweeping through the global economy and equity markets.

Investors should question the assumption that inflation and interest rates will be "lower for longer" and instead consider that inflation could be whipped into a storm by trade, monetary and border policy.

2017 will be a year of two halves: the first - trial and error, volatility and more setbacks than successes for Trump's economic policies; the second - a shift to less confrontation, more cooperation and a win-win for the US and the world.

With Trump, Brexit, Italy's "No" and China's currency woes, the world economy and markets have embarked on a journey into the unknown. Investors should aim for capital preservation until the veil of uncertainty over future policies starts to lift.

Investors should question the assumption that inflation and interest rates will be "lower for longer" and instead consider that inflation could be whipped into a storm by trade, monetary and border policy.

Governments must find a way to reconcile open markets with more evenly distributed income growth, or globalisation may reverse with dire implications for risk assets.

2017 will present many risks and opportunities, as the winds of change sweep through the global economy and markets. Geopolitics will dominate. The only certainty for 2017 is uncertainty.

There is no subject of more importance to investors than what Donald J. Trump will do with the powers of the US presidency. There are pluses and minuses of Trumponomics.

Strong winds of change are blowing - we appear to be entering a new age of populist and economic nationalism. What does it all mean for the outlook for the markets?

The US cannot "win" a trade war with China, and any victory will be Pyrrhic - leading to massive price increases in the low-cost stores on which many Americans rely.

In 2002, we embarked on a quest to identify the secular forces which would substantially influence markets over the coming decade. We proposed five megatrends - which still drive portfolio construction today.

We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In the end, it all comes down to people and values.

The biggest event for global financial markets in 2017 is likely to have taken place on 20 January. How the Trump Presidency unfolds will clearly have a significant impact not just on the US but on global markets in 2017 and beyond.

The three main economies that will largely determine the health of the global economy remain the United States, the euro zone, and China. Each is at a different stage of its economic cycle and faces different challenges.

The stage is set for an inevitable tightening in monetary conditions. The only questions are how soon, how much and with what consequences.

The retreat of advanced economies from the global economy could have far-reaching consequences.

America is living through a kind of Trumpian Genesis - seven days of high-speed political creation. No one yet knows how all this will pan out.

Should we just keep our heads down and treat political events as nothing more than noise? 2017 is going to be a year when politics does matter. In fact, it always has.

Like all presidents, Trump will be judged by how far he makes good on his pledges. It is important to distinguish between the real and the imaginary obstacles Trump faces.

No doubt the liberal media will wage unrelenting war on Trump, as they did on Nixon nearly half a century ago. But this is not the 1970s.