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26 Sep 2024 - Performance Report: Equitable Investors Dragonfly Fund
[Current Manager Report if available]
26 Sep 2024 - Stop Losses You Can Actually Use
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Stop Losses You Can Actually Use Marcus Today September 2024 |
The Reality of Stop LossesStop losses are a discipline that allows you to let your profits run and cut losses. But as anyone who has started using stop losses for the first time will tell you, you get the logic. You think it's a good idea, you start out with the best intentions, but after selling a few stocks that immediately bounce, or selling what you consider to be long-term investments in the short term, only to see them continue to trend up in the long term, you lose your resolve.The reality is that stop losses will involve getting stopped out of some share prices that then immediately shoot up. It's inevitable. Sometimes. And those are the ones you remember, and those are the ones you tell everyone about.Stop losses are not a golden bullet, they are a discipline, and sometimes, you do need a sense of humour. The art of it is to not care about things that happen after you have sold. Regret is not going to help you in your mission to make as much money as possible in anything that has a price over any timeframe.How to Use Stop LossesThe best use of stop losses is not as an instruction but as an alarm bell to unemotionally point out that a trend has changed against you. They can be used by any investor on any timescale, even long-term value investors and wealthy people with large individual stock positions. It's a tap on the back of the head that says, "Have you spotted this? What are you going to do about it?" How many times are you going to ignore the fact that you are now losing money, and it's trending against you?As we discussed in the initial stop loss article, stops can be set in many different ways. They include technical and mathematical stop losses like a dollar-based stop loss and profit stop, a set percentage stop loss, a trailing stop loss, a chart-based stop loss, a volatility-based stop loss, and a percentage of capital stop loss.The Truth About Stop LossesBut there is more to stop losses than that. Yes, you can invent and monitor complex formulas that purport to spit out the perfect stop loss price, but the truth is that only a small part of the value of using stop losses is delivered by using the right price. Most of the value comes from the fact that you had a stop loss at all.There is no 'correct' stop loss. Stop losses are not some finely tuned method of achieving an exact outcome. Their primary purpose is to avoid a mega-loss that you can't afford to have. They are a loss-stopping mechanism, and for the constipated, procrastinating investor who habitually lets their losses run, it is more important to do it than to do it perfectly. There is no perfectly.Alternative Stop LossesSo for those of you who are not mathematically minded and don't want to engage with arithmetic, here are a few other less calculated stop losses that you might be interested in employing. These stop loss methods include most of the value of a stop loss--strategies that are more 'real life' and don't require a calculator. 1. The Holiday Stop Loss Sell everything before you go on holiday. Nothing is worse than a ruined holiday because you're fretting about some dumb stock position. When you have your head in the stock market all day, every day, a holiday isn't a holiday unless you get it out. 2. The Insomnia Stop Loss Sell anything that could possibly, or does, keep you awake. Anything that is disturbing you. You need to put a high value on your frame of mind, and with a finite number of days left to live, you can't afford to waste time being miserable, especially not about money. Anything that's making your life miserable has to go. If in doubt, get out. 3. The Objectivity Stop Loss When things are about as bad as they can get, you need objectivity, which means you need to talk to someone. Use someone else as your stop loss. If in doubt, discuss it with others. And if you can't tell your partner, sell. 4. The Punching the Air Stop Loss This is an old broker's saying: sell anything that provokes you to stand up at your desk and punch the air in delight. Any stockbroker will tell you, euphoria means "Sell". It means a price has exceeded your expectations, and asking for more is simply greedy. You have to book the wins sometime. This is as good a moment as any. 5. The Denial Stop Loss Sell anything you've got wrong. Making money by predicting share prices is not a science. You cannot pin down certainty. There are so many variables and so much sentiment in stock decisions that getting it wrong is to be expected--it's inevitable. When you do get it wrong, you have to act, not deny. There is no room for pride in stock decisions. We all get things wrong. Accept that, and half of the battle--the not-losing-money half--is won. 6. The School Fees and Mortgage Stop Loss Paying essential bills takes priority over trading, I'm afraid. 7. The Divorce Stop Loss Only triggered it once, and if you can recognise the "engagement ring thrown at you" stop loss first, you'll never actually need it. It's Not What You Buy, It's What You Do AfterIt's not about what you buy, it's all about what you do after you buy. Managing the investment, not making it. Most high (or low) brow investors working off Buffett quotes have been brainwashed to think it's all about choosing what to buy. For a disciplined investor or trader, it's all about what you do after you buy. That's the part that needs a plan, discipline, and vigilance, and it's where almost everyone goes wrong and doesn't bother.If you are one of those "Set & Forget", Buffett-quoting, ineffective "Invest as if they are going to shut the market for ten years" investors, shut your eyes, exercise your first stop loss, and see what happens. You will instantly move from confused, indecisive, and unfit to invest, to something... better.Forever.It's not hard. Try it. Author: Marcus Padley |
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Funds operated by this manager: |
25 Sep 2024 - Five key takeaways from the latest GDP data
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Five key takeaways from the latest GDP data Pendal September 2024 |
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TODAY'S June quarter GDP numbers paint a reasonably bleak, but not unexpected, picture of the Australian economy. Quarterly GDP was 0.2% for the third consecutive quarter, leaving annual growth at 1%. It was the weakest financial year - excluding the Covid hit of 2020/21 - since the recession of 1991/92. We are avoiding a technical recession overall this time, but the consumer is going backwards - even with 2.5% population growth. Remember, the main GDP you hear reported is a chain volume, not price measure. I prefer looking at numbers on a state basis, split into consumption and investment. This gives a better picture of what is going on in the economy.
Source: ABS Here are five key takeaways from today's numbers: 1. Government spending remains strong despite government investment tapering offGovernment expenditure contributed 0.3% to GDP, government investment 0.1%, while government spending rose by a strong 1.4%. The main driver is social benefit programs for health services (largely the NDIS). This also remains a major source of strength for employment and inflation, and is central to the current animated debate between Treasurer Chalmers and the RBA (though Governor Bullock has wisely toned down prior comments, leaving RBA proxies to continue it). State governments are also major drivers of growth and inflation. However, NSW has now seen government investment go negative (down 3.8%) as major projects like the Metro are completed. Victoria (up 5.4%) and South Australia (up 5.8%) clearly didn't get the RBA memo asking for restraint. 2. Households are going backwards againHousehold expenditure fell by 0.2% over the quarter, leaving it up only 0.5% on the year. Each person is buying 2% less of goods and services than a year ago. NSW was particularly hard hit (down 0.6%) for the quarter, with Queensland (up 0.1%) and WA (up 0.4%) bucking the trend. 3. Households are barely saving anythingThe national accounts do not directly measure savings - it is a residual item after income and expenditure are calculated. However, it does give an insight into household behaviour. The saving ratio remained at 0.6%. 
Source: ABS Now, there can be opposing explanations of a fall in the savings ratio. On the positive side, it can reflect animal spirits as optimistic consumers go on a spending spree, believing their finances are strong - we saw this pre-GFC when the savings rate regularly went negative. However, it can also reflect that in the nominal economy, income growth is not exceeding price growth, meaning consumers need to either save less or draw down on existing savings. Given current rates and sluggish spending, this is a better explanation. 4. Australia's commodity boom is waning (negative for GDP) but remains historically strongAustralia's terms of trade - the prices we receive for our exports versus what we pay for our imports - fell 3% in the quarter. Import prices were flat but export prices, dominated by bulk commodities, fell 3%. It is down 6.4% from a year ago. The terms of trade peaked in June 2022 and is now around 20% lower, but it still remains slightly above the post-GFC average. The main impact for governments is a tapering of the "rivers of gold" from royalties and mining company taxes. On a more positive note, service exports are growing strongly again (up 5.6%), though recent Federal Government overseas student policy announcements may dampen this. 5. Finishing on an optimistic note, GDP should pick up from hereA lot is being made, especially by the government, around the positive impact that tax cuts and subsidies should have in the year ahead. Of more importance, though, is the fact that for the first time since the inflation boom of 2022, incomes are increasing faster than inflation. This real wage growth is being driven by falling inflation, which will continue in the year ahead. The RBA is forecasting GDP of 1.7% for 2024 and 2.6% for 2024/25. Given the first two quarters of this year are only up 0.4%, the RBA is expecting a 0.6% to 0.7% quarterly rises over the next year. This may seem a bit optimistic, but the possibility of rate cuts and falling inflation could well see a decent rebound in the economy. Public demand should moderate over the medium term, but current reforms will take time. The fact it is an election year for the Federal Government should see public demand remain around 4%, meaning household consumption need only return towards 2%, or population growth, for its forecast to be hit. Author: Tim Hext |
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Funds operated by this manager: Pendal Global Select Fund - Class R, Pendal Horizon Sustainable Australian Share Fund, Pendal MicroCap Opportunities Fund, Pendal Multi-Asset Target Return Fund, Pendal Sustainable Australian Fixed Interest Fund - Class R, Pendal Sustainable Australian Share Fund, Regnan Credit Impact Trust Fund, Regnan Global Equity Impact Solutions Fund - Class R |
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This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current as at December 8, 2021. PFSL is the responsible entity and issuer of units in the Pendal Multi-Asset Target Return Fund (Fund) ARSN: 623 987 968. A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1300 346 821 or visiting www.pendalgroup.com. The Target Market Determination (TMD) for the Fund is available at www.pendalgroup.com/ddo. You should obtain and consider the PDS and the TMD before deciding whether to acquire, continue to hold or dispose of units in the Fund. An investment in the Fund or any of the funds referred to in this web page is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. This information is for general purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient's personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation. The information may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information is complete and correct, to the maximum extent permitted by law neither PFSL nor any company in the Pendal group accepts any responsibility or liability for the accuracy or completeness of this information. Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Performance data (post-fee) assumes reinvestment of distributions and is calculated using exit prices, net of management costs. Performance data (pre-fee) is calculated by adding back management costs to the post-fee performance. Past performance is not a reliable indicator of future performance. Any projections are predictive only and should not be relied upon when making an investment decision or recommendation. Whilst we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The actual results may differ materially from these projections. For more information, please call Customer Relations on 1300 346 821 8am to 6pm (Sydney time) or visit our website www.pendalgroup.com |
24 Sep 2024 - Trend Following in Uncertain Markets
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Trend Following in Uncertain Markets East Coast Capital Management September 2024 Trend Following: An Attractive Investment Strategy in Uncertain Markets In the ever-evolving landscape of financial markets, uncertainty is a constant companion. Economic fluctuations, geopolitical events, and market sentiment can create an environment where predicting outcomes becomes increasingly challenging. In our view, trend following is an attractive investment strategy and particularly so amid this unpredictability. Its appeal lies in its simplicity, adaptability, and effectiveness in capturing market movements, especially during turbulent times. 1. Simplicity and Objectivity in a Complex World One of the most significant advantages of trend following is its straightforward approach. The strategy is based on a simple premise: buy when prices are rising and sell when they are falling. This objectivity helps remove emotional biases from the investment process. In times of uncertainty, where emotional reactions can cloud judgment, trend following provides a systematic method to navigate the market. By relying on clear, predefined signals--such as moving averages or momentum indicators--investors can make decisions based on current market conditions rather than speculative predictions. See also our previous post "Remembering Daniel Kahneman". 2. Flexibility to Adapt to Changing Conditions Market conditions can shift rapidly, especially during periods of uncertainty. Trend following excels in this regard due to its adaptability. Whether in a bull market, bear market, or a phase of high volatility, trend-following strategies will dynamically adjust to the prevailing conditions. This flexibility allows investors to pivot and stay aligned with market trends, with the strategy remaining relevant as circumstances evolve. 3. Capitalising on Emerging Trends Amidst Volatility Volatility and uncertainty often lead to the emergence of strong trends. While other strategies might struggle with the noise of unpredictable markets, trend following focuses on capturing significant price movements that align with established trends. This ability to harness the power of volatile conditions enables trend followers to benefit from market inefficiencies and seize unexpected opportunities. 4. Built-In Risk Management for Uncertain Times Effective risk management becomes paramount when navigating uncertainty. Trend-following strategies incorporate rigorous risk management practices, such as setting stop-loss orders. These mechanisms help limit potential losses and preserve capital, providing a buffer against unpredictable market movements. In times of heightened uncertainty, these tools are essential so that one adverse outcome does not derail the entire strategy. 5. Robust Historical Performance in Uncertain Markets Historically, trend following strategies have demonstrated resilience in volatile and uncertain markets. The success of trend followers during periods of market upheaval underscores the strategy's effectiveness in navigating unpredictability. For instance, during financial crises or economic downturns, trend followers have often avoided significant losses and even capitalized on market declines. This empirical evidence highlights trend following's robustness and reliability, making it an attractive choice for investors facing uncertainty. At our website and our YouTube channel you can view our video "Academic Research Support For Trend Following", in which ECCM's founder and CIO, Adam Havryliv, and Strategy Ambassador, Richard Brennan, talk more about the academic research on the effectiveness of trend following. Conclusion In our view, trend following offers a compelling investment strategy due to its simplicity, adaptability, and potential for long-term gains, especially in uncertain market conditions. Its systematic approach reduces emotional bias, while built-in risk management ensures disciplined investing. Supported by historical success, in our view, trend following is an attractive strategy for navigating the complexities of financial markets - both seeking to capitalise on emerging trends and helping to protect against adverse movements. At ECCM, our educational foundations are in finance and psychology. With extensive trading experience and long-term dedication to quantitative trading systems, we seek to provide our clients with our carefully developed approach to navigating the complexities and vagaries of markets. Wholesale clients can find more information on ECCM and our flagship ECCM Systematic Trend Fund at our website and Australian Fund Monitors. Funds operated by this manager: |
23 Sep 2024 - Performance Report: Bennelong Twenty20 Australian Equities Fund
[Current Manager Report if available]
23 Sep 2024 - Performance Report: Argonaut Natural Resources Fund
[Current Manager Report if available]
23 Sep 2024 - New Funds on Fundmonitors.com
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New Funds on FundMonitors.com |
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Below are some of the funds we've recently added to our database. Follow the links to view each fund's profile, where you'll have access to their offer documents, monthly reports, historical returns, performance analytics, rankings, research, platform availability, and news & insights. |
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| Dimensional Australian Core Imputation Trust | ||||||||||||||||||||||
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| Dimensional Australian Large Company Trust | ||||||||||||||||||||||
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| Dimensional Australian Small Company Trust | ||||||||||||||||||||||
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| Dimensional Australian Value Trust | ||||||||||||||||||||||
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| Artisan Credit Opportunities Fund | ||||||||||||||||||||||
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20 Sep 2024 - Hedge Clippings | 20 September 2024
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Hedge Clippings | 20 September 2024 The US Federal Reserve eased rates by 50 bps earlier this week, ending months of speculation - not over the fact that they were going to cut, but by how much. Now the speculation will be on the size and timing of the next cut, or cuts, with J.P. Morgan predicting two more totalling 1.25% this year, and more in 2025. In reality, they cut not only because US inflation is coming down and under control, but because the underlying economy is slowing more than the numbers suggest. Next Tuesday it will be Australia's turn, but there are not many, if any, economists expecting a cut based on the messages that have been coming out of the RBA. As evidenced by an article outlining 9 insights on the Australian economy for the June quarter published by the ABS, Australia is stuck - and the RBA with it - between a rock and a hard place. Sticky inflation at 3.8% has the RBA's hands tied. Growth of 0.2% for the June quarter was "modest" and only positive thanks to government spending adding 0.2%. GDP per capita fell 1% over the year to June. Household spending fell 0.2%, yet wages grew 4.1%. Household saving was at its lowest rate since 2007. Capital investment dipped (again). The labour market remained tight, with unemployment at 4.1% (now 4.2%). Admittedly, the article reflects the 3 months to June. Since then, wages have increased, stage 3 tax cuts have kicked in, and state and federal government energy support has been introduced, all of which may assist household spending or saving, but won't improve inflationary pressures. No wonder the government is wanting to blame the RBA, particularly with an election around the corner, the result of which is looking increasingly uncertain. Hence our very own political version of Flanders and Swann* have been pressuring the RBA to cut rates, and blaming them for smashing the economy. In fact, if the RBA were to cut next week it would immediately lead to cries of government interference into what should be an independent reserve bank. *By an extraordinary coincidence, given a couple of glasses of pinot noir over a Friday lunch, Chalmers and Swan sounds a little like the legendary Flanders and Swann. of the 1950's era musical comedy act, "At the drop of a hat" and its sequel, "At the drop of another hat" which wowed audiences in the days before YouTube. The real Flanders and Swann wrote numbers such as "The Reluctant Cannibal", which by today's standards would be considered politically incorrect, while the current Chalmers and Swann are being politically clumsy. News & Insights New Funds on FundMonitors.com Investment Perspectives: Is the US headed for recession? | Quay Global Investors Market Commentary - August | Glenmore Asset Management August 2024 Performance News Skerryvore Global Emerging Markets All-Cap Equity Fund Bennelong Concentrated Australian Equities Fund Bennelong Emerging Companies Fund |
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20 Sep 2024 - Performance Report: Quay Global Real Estate Fund (Unhedged)
[Current Manager Report if available]
20 Sep 2024 - Global Webcast: Reflecting on a volatile month & 2Q24 results season
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Global Webcast: Reflecting on a volatile month & 2Q24 results season Alphinity Investment Management August 2024 |
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Elfreda Jonker and Jonas Palmqvist reflect on what has been happening in markets over the previous month and review key themes from the second quarter of 2024. |
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Funds operated by this manager: Alphinity Australian Share Fund, Alphinity Concentrated Australian Share Fund, Alphinity Global Equity Fund, Alphinity Global Sustainable Equity Fund, Alphinity Sustainable Share Fund |
