Recently, I attended the Eureka Report Around the World of Investing Forum. The overwhelming impression was that global investing is very new to many Australians.

Only the most die-hard peak-oil proponents, or other gold-bugs, will fail to acknowledge that the commodity bubble has burst. Is it a positive, or negative, for financial markets?

Looking back over the last 40 years, it is clear that, in the next 20 years, successful asset owners and managers are going to listen to Einstein and stop making things too simple.

It is not beyond the realms of possibility that the "prudent person" approach to playing it as safe as possible in portfolio construction might undergo a significant shift.

The right policies are the opposite of those pursued by the world's major economies. No wonder global growth keeps disappointing. In a sense, we are all Japanese now.

Statistics rarely tell the story clearly. With trial and error, I found that looking at three dimensions of performance assisted my interpretation.

Japan is not going to stop QE next year or the year after or the year after that. This is not Zimbabwe printing money. Japan is important to the global economy - what they do affects everything.

By calling an election now, Abe is betting that a further big fall in the yen - and a consequent further rise in the Nikkei - is no certainty. He may well be right.

The US dollar rally could contribute to the "rebalancing" that has long eluded the world economy. But that is far from guaranteed given the related risks of financial instability.

This white paper serves up a retirement income planning "buffet" - reviewing the two main opposing philosophies and the range of strategies that span the divide.

Ten years ago, hardly anyone talked about low-volatility investing. Now there's growing concern it is becoming an overcrowded trade. There are four arguments against this.

PortfolioConstruction Forum Academy Spring Seminar 2014 features three sessions. This Resources Kit contains the materials for preparing for the Seminar. After the Seminar, it will also contain the presentations for each session.

The world's biggest inaccessible stock market is finally opening to foreigners. Those with strong convictions about the rise of the Chinese consumer may want to take a hard look.

Despite strong returns, it's still hard for investors to think positively about China A shares as an investment. The key is to envisage what the world will look like in 10 to 15 years.

In managing sequence of returns risk, we may not be giving simple rebalancing nearly the credit it deserves to accomplish similar or better than more complex approaches.

Gridlock may be perfectly acceptable in Washington these days - but Europe, like Japan, now badly needs strong political leadership.

The answer seems obvious. But more complicated forces are at work that have reduced real interest rates far below historic norms and may keep them very low for many years.

The media continues to obsess about IS - but the far more investment-relevant development in the Middle East is the sudden return of Libyan crude to the market.

There are good reasons why central bankers receive so much media. But the bubble around their pronouncements grossly exaggerates their economic significance.

A recent survey found "an alarming 60 percent of clients did not know or were unable to answer if they were on track to meet their defined goals". Can yours?

I don't dispute low vol stocks outperform highly vol stocks. But volatility does not explain all of an asset's risk.

The taboo that savers have to be compensated for handing money to a financial institution has been broken, with the ECB's negative rates finally being passed on to retail clients.

It has been my contention for a while that capitalism is returning to its 19th century deflationary roots. Indeed, the evidence has become overwhelming.

The global economy is like a jetliner that needs all of its engines operational to take off. Unfortunately, only one of its four engines is functioning properly.

Last week's volatility surprised many. How should portfolios be positioned? And what does this recent bout of volatility tell us about the economy and financial markets?

One of the originators of CAPM, Sharpe was awarded the Nobel Prize in economics. I sat down with him to discuss retirement income planning.

Perhaps the most crucial change in our retirement planning language is simply to rename "retirement".

Thomas Piketty's "Capital in the Twenty‐First Century" is certainly the economics book of the year. We have been asked numerous times to appraise his ideas.

Most countries face a trio of inequalities - of income, wealth, and opportunity. Beyond the moral, social, and political implications lies a serious economic concern.

The German word for what we saw in markets this week is Torschlusspanik. Literally "gate-shut-panic", it describes the nasty crush when everyone rushes at once for an exit.

China has about five years to lay the groundwork for the transition to a new monetary policy framework with a currency that is sufficiently flexible.

This particularly relevant review of literature on sequencing risk considers the impact of Australia's age pension on retirement spending strategies.

Relying on Fed tightening to predict the next serious sharemarket weakness may be very dangerous. Perhaps this time really IS different.

Earlier this year, volatility across a whole range of key global assets reached major multi-year lows. But, equity volatility, we expect, has passed it's low for this cycle.

The dynamic duo (Kitces and Pfau) are back in their search for the ultimate truth about retirement income planning and how to structure portfolios to minimise drawdowns.

Today is much less reminiscent of 2007, when global equity prices were at similar levels to today, than of 1987. But it seems too early for investors to panic, or even reduce risk.

An increasingly obvious paradox has emerged in global financial markets this year. While geopolitical risks have multiplied, markets remain buoyant, if not downright bubbly.

Investment management has long been the backbone of financial planning. But is it the future for financial advisers? I think not.

This Resources Kit is a deluge of videos, podcasts, and papers for all sessions of the jam-packed Conference 2014 program so you can "attend" even if you weren't part of the 600 plus audience.

Over the next year or two, asset prices will no longer be driven by economic stats and monetary policy. Three major rotations are likely to continue and gather pace.

This paper argues that to make choices regarding smart betas we must first assess whether they're robust. Luckily, it concludes, most so-called factors can be ignored.

IPOs of LICs continue. But LICs have unique challenges and complexities that make them a complicated investment decision - which is certainly not the way they are marketed.

Speculation is building that the Fed will surprise financial markets with a new framework for forward guidance, perhaps as soon as the FOMC meeting on 16/17 September.

If Scotland does vote for independence, it's hard to come up with a positive scenario for British assets.

A big correction in equities, if it hits in the next year or two, is unlikely to be caused by monetary policy expectations.

Robert Merton, 1997 Nobel Prize winner, has recently penned an article about his views on retirement planning. There are some interesting take aways for Australian practitioners.

Modern central banking has worked wonders to bring down inflation. Today, high inflation seems remote. But inflation is only dormant, it is certainly not dead.

Unconstrained debt strategies are flavour of the month, and likely to be very popular amongst investors for several reasons. But where do such funds fit in a portfolio?

What do Richard Nixon, novel "Zen and the Art of Motorcycle Maintenance", and Bridgewater Associates have to do with risk parity investing and Conference 2014?

Are Term Deposits the most boring subject in finance? Actually, they're anything but. The Australian TD market is an area where it is easy to add demonstrable value for clients.

As the first day of our annual Conference program, we hosted the Finology Forum. Our particular focus of finology was as it applies to the giving of investment advice.

The one-day Conference Finology Forum 2014 program (within the overall three-day Conference program) featured leading investment thinkers from around the world presenting on how to more effectively help investors manage their expectations and investment portfolios. This CPD Quiz is for delegates to complete, to receive CPD accreditation.

Alpha Potential is gaining traction as a tool to identify opportunities for active management, enhancing the value proposition afforded to active managers.

People often ask me about my outlook for the US housing market. The outlook is improving - and that's constructive for consumer spending, confidence and jobs.

The last decade has seen a disconnect between investment risk and return vs what we're taught should be the case. What is the long-term relationship? Can it be beaten?

A dynamic risk management approach can protect a portfolio again sequencing risk, providing reliable investment returns over the cycle.

This paper reviews the principles, practices, risk management requirements and implementation steps needed to build absolute return focused portfolios.

To ensure risk is genuinely well diversified takes a sophisticated forward-looking scenario-analysis process to combine quantitative rigor with qualitative insights of extreme stresses it might face.

This paper explores the thesis that capturing the traditional relationship of fixed income in the total client portfolio will require more untraditional approaches going forward.

Six stocks make up just under half of the Australian equity market. This research paper examines the impact of this on investors' returns, and whether it is responsible investing.

This paper explores a different approach to asset allocation and alternative returns sources to reduce the reliance on traditional asset classes and drive returns.

This research paper discusses (in simple terms) how to reconnect the concept of Risk and Return via the practical application of volatility derivatives to portfolios.

This paper explores the opportunities within private equity and private debt and examines their role in providing downside protection for investors.

Over the past 40 years, the high-yield landscape has grown exponentially. Knowing the key risks and emerging opportunities can help map a path forward.

Uncertainty about the timing of future interest rate rises poses challenges to fixed income investors. This paper identifies options available in managing portfolios in such an environment.

After two decades of elevated earnings and PEs - and two bear markets but also three bull markets - many are questioning whether Shiller CAPE is all that predictive.

Since 2010, there has been an almost perfect correlation between the strength of the US economy and stock markets outside the US. But this is set to diminish.

Risk assets are grinding higher and volatility is extraordinarily low - and monetary stimulus is still plentiful. What does life after zero (rates) look like?

We've come to accept a world where the US drives what happens in the global economy and markets. But that's changing - with significant implications for portfolios.

The escalating conflict in Ukraine has focused attention on a fundamental question: What are the Kremlin's long-term objectives?

Investing can and often is intellectually compelling. But it should not be driven by excitement, as it is for many individuals.

Those who warn of grave dangers if speculative price increases are allowed to continue are right, even if they can't prove there is cause for concern.

Are equities at the end of a five-year cyclical bounce or the start of a 15-year structural breakout? History suggests two contradictory answers.

New research found 78% of consumers care about being comfortable in the future - that alone tells us where the future is for advisers.

It is not surprising that bond managers have significant difficulty in outperforming a market cap-weighted benchmark.

This paper is a great introduction to why behavioural finance is quickly becoming recognised as a field that can add real value to the wealth management industry.

As investment professionals, we live investing every day. We spend excessive time reporting and not enough 'rapporting.'

The GFC was the first crisis where good risk profiling tools were in place for a wide range of investors. Two papers look at whether risk tolerances altered materially through it.

Do geopolitical events involving potential or actual military conflict really matter in the constructing of investment portfolios?

The recent US supreme court ruling that Argentina's hold-out creditors have the right to be paid in full is a dangerous decision for all countries for two reasons.

Are we at the start of a long-term bond bear market? Here are three factors that I expect to keep bond yields lower for longer, and five important implications for investors.

Symposium NZ 2014 facilitated debate on the three pillars of portfolio construction – markets, strategies and investing - to help delegates build better quality portfolios. This CPD Quiz is for delegates to complete, to receive Structured CPD Hours.

The upcoming US/China 6th Strategic & Economic Dialogue is an opportunity for serious reconsideration of the relationship between the world's two most powerful countries.

The assassination of Archduke Ferdinand in Sarajevo 100 yrs ago tomorrow lit the fuse to WW1. There are many points of modern relevance in the catastrophe.

This paper examines the oft-considered subject of hedge fund returns, finding far greater dispersion than for traditional fund managers.

The staple of retirement planning - save a percentage of income - makes it surprisingly difficult to ever reach retirement. The alternative is much easier and more successful.

Everyone knows bond rates are going up - so why would you buy fixed interest? Actually, there are three really good reasons.

PortfolioConstruction Forum Academy Winter Seminar 2014 featured four sessions: Risk, return & relating; Statistics, lies, and investment performance analysis; How safe are safe withdrawal rates in retirement?; and, Communicating and learning with and from clients.

The Islamist surge through central Iraq has the potential to upset the plans of investors who've convinced themselves that volatility is in the past.

What we are witnessing in Iraq is a war within Islam. Will it mutate into a broader regional war thereby threatening oil supplies?

Investing differently gives no certainty of great results (increasing the odds of being wrong as well as right). But it is a necessary but not sufficient ingredient for great performance.

Moving to a twenty-first-century currency system would make it far simpler to move to a twenty-first-century central-banking regime as well.

Last week's most important financial event was not US payroll data, the ECB, or the rapprochement with Putin. It was the pricing of Uber, at 60 times rumoured revenues.

Are we any good at estimating the values of our homes? Surprisingly, on average we are, according to a RBA study. It also found a link to weightings of risky assets in portfolios.

Tomorrow we expect to see the latest Band-Aid solution being applied to the eurozone. Forgive me if I don't roll out the barrel. As I see it, there are four key problems.

Across the industry, portfolio rebalancing is the norm - with little agreement on the optimal frequency. So I experimented to find out which frequency is best.

Today's backlash against trade and globalisation should be viewed in the context of what, as we know from experience, could come next.

NZ FMA new CEO, Rob Everett, gave an interesting briefing by way of introduction. It contained a very strong warning for the short term, and an intriguing line of thinking for the longer term. Both focused on behaviour.

This Resources Kit is a deluge of videos, podcasts, and papers for all sessions of the jam-packed Symposium 2014 program so you can "attend" even if you weren't part of the 200-strong audience.

Markets are pricing in expectations that the ECB will have to be very aggressive next week if it is to turn back the tide of European deceleration. It's reminiscent of October 1987.

Nobody is more outspokenly bearish on Japan than Kyle Bass. He recently reiterated doubts about Japan's chances of averting a debt crisis, and cast doubt on China's economy.

Most research assumes retirees maintain a consistent standard of living. A new study disproves this, implying we may be overestimating funds needed to retire by up to 20%.

If you were lending somebody money, would you lend them more money just because they had more debt? If you are investing according to a debt-weighted benchmark, that is exactly what you are doing.

Faced with the prospect of rising yields, some investors are cutting bond allocations. But the bond market can offer compensation against rising rates.

Understanding what is going on under the bonnet at central banks is key to understanding what will drive markets – and therefore how to best position portfolios.

While it is well established that equity valuations impact medium-term equity returns. It is less well known that starting period equity valuations also impact medium-term equity volatility and bond-equity correlations.

The US is undeniably the critical market within the global economy - and there are real sign-posts that clearly suggest it is ready to surprise the world on the upside.

Having redefined media, technology, the Internet and social media will soon likely start transforming how capital is mobilised and allocated.

There is huge variety in retirement income strategies. This paper introduces "longevity risk aversion" and its impact on safe withdrawal rates.

Often, the true dangers reside where investors are most comfortable going and the best opportunities are where investors fear to tread.

It is time to start looking at alternative assets. Not because there is any pressing need to invest today, but because thorough analysis takes time and mistakes can be expensive.

Older adults are crossing the most challenging and complex frontier of their lives. To earn a role with them, financial advisers have to learn more about how older clients think and communicate.

As Glen Whitman argues, "What distinguishes good economic thinking from bad is recognition of the subtle, creative, and often unforeseen ways that people respond to incentives."

Long-standing historical grievances among China, Japan, Korea, India, and others remain open wounds. Why are tensions among Asia's great powers becoming more serious?

Studying economics these days, it is quite possible to get a degree without ever having come across the name of a single economist. This is a pity and it is not really appropriate to a social science.

There is an enormous power and prestige for a profession in doing public good. Done correctly, we will stand a good chance of earning more respect than politicians in future Reader's Digest polls.

Towers Watson's compendium of insights into global equity investing contains useful insights about issues many portfolio construction practitioners face every day.

It is fine to have positive returns year-in, year-out as an objective or goal. But, absolute returns should never be presented as an expectation, as disappointment is inevitable.

An empirical study found that in advanced economies, the greatest factor that has increased the growth of government is the welfare state. Economists are highly sceptical about such transfers.

As investment advisers, we love to inundate prospective clients with data. But disseminating large amounts of data is actually counter productive.

Stein's law, a rule of thumb for politics, economics and business, is that "If something can't continue, it will stop." Here are four inevitable changes in the investing environment.

Fortunately, New Zealand consistently ranks near the top of international indices measuring economic freedom. But this also means that we might take it too much for granted.

The Academy Autumn Seminar 2014 featured four sessions: 10 golden rules for portfolio construction; Reassessing the global debt spectrum; Currency revisited - to hedge or not to hedge; Volatility investing - the next frontier.

Against a backdrop of currency slides, yield spikes and chronic equity underperformance, we invited our EM experts to defend their asset class against three charges.

Recently, I ran a session for a group of 20-years plus CFP veterans. What became evident was that their idea of using technology and engaging collaboratively with clients was very different to mine.

Target date funds are becoming the workhorse for DC plans but there are problems with the approach. This paper offers a portfolio construction framework to overcome them.

The Fed's published policy on how it will exit QE is fairly old. Overall, though, there is not a huge overhang of securities that the Fed needs to sell to exit.

The active versus passive debate was recently given a boost when Warren Buffet suggested in his annual letter that most investors are better off investing passively.

In recent months, we've highlighted one school of research on funding retirement income, being the sustainable withdrawal rate approach. This paper takes a different approach.

George W. Bush allegedly once said, "the problem with the French is that they don't have a word for entrepreneur." Indeed, most people have no idea what entrepreneurship really means.

A recent Australian study of how clients prefer to be communicated with from their financial advisers sheds some interesting light on the challenge.

The challenge for investors over the past several years is that diversification did not work as expected. The dynamic nature of correlation must be factored into portfolio modeling.

While most financial advisers aspire to work with HNW clients, very few successfully do so with any scale or significance. Most advisers will have a few HNW clients, but all too few of them. Why?

So the US budget deficit is contracting because government consumption is falling? It is really just an accounting illusion. Financial repression is still the order of the day.

Economic, financial, and geopolitical risks are shifting. A year or two ago, six risks stood at center stage. These have now reduced. But six others have been growing.

In theory, recent currency devaluations should make EM countries more competitive. But they're also facing a technological jump that they may not be able to keep up with.

In Shakespeare's Hamlet, Polonius's advice was "Neither a borrower nor a lender be For loan oft loses both itself and friend." In contrast, borrowing and lending between strangers makes the world a better place.

When meeting with a prospect for the first time, financial advisers should limit discussion about their background to 3 minutes and address the 4 key questions most prospects want answered.

Just as it is hard to make a blockbuster film every time, no leader can consistently shape the narratives that affect the economy. But they need to try.

Does Fama and French's latest work, A Five-Factor Asset Pricing Model, provide any information that can be of practical value to advisers or investors? The answer is no.

When any investment and, in particular, an alternative investment begins to be considered mainstream with attendant big inflows, the end is generally nigh.

The nature of target date funds - encompassing multiple objectives and changing asset allocations over time - raises challenges for performance reporting.

The Fed's clear message from yesterday's FOMC meeting is that it will stay the course on exiting QE as gracefully and slowly as possible.

What impact has the FMA's Guidance Note: Limited Personalised Advice published in December had on how advisers handle lower value clients?

It is through competition between wants and different ways of satisfying them, that markets create prosperity. In economic thinking, competition has two main functions.

Will each future generation continue to enjoy a better quality of life than its immediate predecessor? The likely answer is yes, but the risks seem higher.

As the logic goes, retired clients deplete their portfolios, and more pass away as the years go by, so a firm with aging clients is akin to a rapidly depreciating asset. But is this true?

It's the eternal debate - can active management outperform? Two recent reports offer some interesting insights into the issue.

If you believe the US State Department has the Crimean situation under control, plan for a bullish scenario for risk assets. Plan for the opposite, if you believe Putin will prevail.

Central banks stand at the apex of the banking confidence pyramid but cannot insulate the public from the consequences of collective fiscal and financial follies.

Australians are waking up to the fact that they have not had enough global (mainly equity) exposure. Why the case for more global exposure now?

A new research paper looks specifically at withdrawal rates in the Australian context, confirming the legislated minimums for account-based pensions are much too high.

Aside from CPD changes, the most distinct change in the new Code of Professional Conduct for AFAs is to prioritise the "client first" rule. We asked advisers what this means in day-to-day business.

It is common knowledge that a trusted adviser has a far higher chance of selling products or services than one who is not trusted. However, what is meant by the word trust?

This Resources Kit is a deluge of videos, podcasts, and papers for all 18 sessions of the jam-packed Markets Summit 2014 program - The Great Escape (what will markets be like in the QE runout?) so you can "attend" even if you weren't part of the 500-strong audience.

As competition in the financial advice business intensifies, advisers must focus on those activities that add the most value for clients.

Few economists are more famous than the commonly regarded founder of economics, Adam Smith. Over 238 years later, his ideas are still relevant.

When investment experts are in agreement, we should always ask what could go wrong with the consensus.

In finance and geopolitics, experience must always prevail over hope, and realism over wishful thinking. A grim case in point is the Russian incursion into Ukraine.

Communicating with clients is one of an adviser's most important responsibilities. In the modern world, the options of how to do this are many. What works?

If we're explaining a "norm" to clients that embeds a social proof, we should be using norms that show what is successful, not describing the commonality of failure!

In rapid-fire presentations, 18 experts from various parts of the world debated the biggest issue facing the financial world.

In a new format for Markets Summit 2014, delegates took the role of CIO for the day, as the 18 strong presenter faculty made the case for their highest conviction insights.

The boom demographic joining Facebook is age 65+ at the moment. If retirees are flocking to social media channels, shouldn't you?

Why Unconventional Monetary Policy is undertaken, how it works, what it does, whether it's inflationary, and some of the unintended consequences.

Looking ahead, returns on emerging market debt are likely to better reflect the diversity of the asset class. More than ever, it pays to know your market.

The US is undeniably the critical market within the global economy - and there are real sign-posts that clearly suggest it is ready to surprise the world on the upside.

2013 was a transitional year, as the market woke up to the reality that extraordinarily accommodative monetary policy would not go on forever. What of 2014?

Many New Zealand financial advice firms need to fundamentally rejig their way of doing business, to improve client retention, drive down costs and improve the bottom line.

The start of the end of the Federal Reserve's money printing is expected to reshape the global investment landscape.

William Bengen established the 4% rule - and showed a higher exposure to equities was better for retirement portfolios.

Turmoil in EM economies has returned with a vengeance. But the threat of a full-fledged crisis remains low, even in the Fragile Five.

The Academy Summer Seminar 2013 featured four sessions: The paradox of wealth (& what can be done); Don't concentrate too hard; Developing your investment philosophy; and, Financial literacy and cognitive functioning.

As we entered 2014, the consensus on the best and worst areas to invest could be described very simply: momentum investing ruled, contrarian investing was dead.

The bullish mood suddenly changed in early January. Here is a structure for thinking about recent market events that may be helpful in assessing new evidence as it comes along.

financialalert asked the heads of four financial adviser bodies about their plans for 2014, and what they will have on offer for advisers in the coming months.

A report on asset allocation intentions of financial planners set the voice in my head singing "How many times..."

There is a broad acceptance that Bernanke's monetary policy helped stave off another global depression. But the final verdict on unconventional monetary policy remains years away.

The majority of the world will see an improvement in economic growth this year. But, after a lengthy and linear rise, equity markets will see much greater volatility this year.

Breaking Unconventional Monetary Policy is not an asymmetric outcome - it is like 50 shades of grey, whips included, particularly for emerging markets.

Change is stirring and markets do not like uncertainty. Breaking Unconventional Monetary Policy is a catalyst for slower economic growth and deflation - market volatility will only increase in 2014.

Breaking Unconventional Monetary Policy is going to prove too hard to achieve. Central Banks will run scared of their political masters; QE or an equivalent will recommence.

The US economy made substantial progress in 2013. The economic outlook for 2014 appears promising -and the US equity market can continue to appreciate.

Will QE ruin retirement? Looking back at the risks inflation has presented in the past helps us look forward to the potential consequences.