Insights
Investment Education
These quarterly newsletters address basic investing concepts.
Surviving a bear market
First Released: August 2008
Historically, we face a bear market every seven years or so. Seasoned investors know that while they do cause concern for many, the sharemarket always recovers. In the meantime, there are a number of ways we can remain focused and calm, and deal with these trying conditions.
Quick Overview
Surviving the bear:
- Remain focused on the long-term
- Don't let fear guide your investment
- Diversify to soften the blow
- Never try to time the market
- Stay invested
- Seek advice
Insights: Surviving a bear market (245kb)
Why now isn't the right time to switch to cash
First Released: August 2008
The old Wall Street saying goes, “the market will always act in such a way as to frustrate the greatest number of investors. Just when you think it’s going to zig, it zags.” So, switching you investments to cash now means you may miss the benefits of the market upswing.
Quick Overview
With the current market
turbulence, many investors have
asked the question, “why don’t I
just switch to cash?” In this issue
of Insights, Russell investments
gives a perspective on why cash
may not be such an attractive
option, particularly in times of
market volatility.
Insights: Why now isn't the right time to switch to cash (355kb)
How you can turn risk in your favour
First Released: August 2008
Rather than considering all risk as bad and to be avoided, consider that, in reality, accepting some form of risk is an essential element in helping your investments produce desirable long‑term returns.
Quick Overview
Six faces of investment risk
- Asset Class Risk
- Active Management Risk
- Interest Rate Risk
- Inflation Risk
- Currency (or exchange) Risk
- Timing Risk
Insights: How you can turn risk in your favour (280kb)
How you can deal with volatility; and why it shouldn’t distract long term investors.
First Released: August 2008
Markets have taken Australian investors on a wild ride in recent times. The old adage “what goes up must come down” could probably be updated. These days, what goes up not only comes down, but also goes back up and comes back down yet again. It’s called market volatility, and more often than not, how we react to volatility can determine whether or not we make a profit.
Quick Overview
Five principles for your successful investing:
- Courage – Investing in shares is risky, but it’s a calculated risk
- Honesty – Be honest with yourself about how much you really know
- Detachment – When invested in a balanced portfolio, it never hurts to read the headlines
- Discipline – Don’t let emotion rule your investment strategy
- Commitment – Keep your eye on the prize and ignore short-term market events
Insights: How you can deal with volatility (480kb)
Why Invest Internationally?
First Released: January 2008
In recent times, the Australian sharemarket has proven to be a great investment. The trouble is, it only represents 3% of the world’s investment market. This means that investing only within Australia eliminates 97% of your investment opportunities. In this edition of Insights, Jeanette Bredberg discusses the reasons why international shares, international bonds and international property are essential inclusions alongside domestic allocations. She also presents a framework for considering how much of each asset class to devote to international exposure.
Quick Overview
Why hold international shares?
- Reducing risk through diversification
- Filling in the gaps
- A world of investment opportunities
- The Australian market is highly concentrated
- Short - term experience hides the benefits
How much to allocate to international?
- Home country bias
- Increase your international exposure
Insights Newsletter: Why Invest Internationally? (1MB)
When a 'Star' Portfolio Manager Leaves
First Released: April 2007
Russell is dedicated to the research and assessment of investment managers in order to discover those with rare and special talents. Over the years, we've learned that there are several things to consider when a star staff member leaves an investment manager. In this article Russell's Managing Director Retail Investor Services, Chris Corneil provides some insights for financial advisers to consider - when a 'star' portfolio manager leaves their clients' portfolio.
Quick Overview
The departure of a key professional from an investment manager may seem straightforward - but in reality it requires close consideration of a range of factors. This short guide provides a checklist of 10 things an adviser should consider when a star manager decides to leave a clients' portfolio.
Insights Newsletter: When a 'Star' Portfolio Manager Leaves
(145kb)
Starting Earlier for Super Results
First Released: December 2006
In Australia, we’re lucky to have a well-developed system for retirement saving. There’s the government 9% compulsory contributions scheme and the opportunity to add to our savings with voluntary contributions – all backed by an Age Pension safety net. Why then are so many of us NOT headed for a retirement that we can truly look forward to, where our savings last as long as we do, and support comfortable lifestyles? This edition of Insights looks at super as an investment, and what you can do to maximise its potential for your future.
Quick Overview
- The number one super strategy: START EARLY
- Why we're not doing the obvious – latest research findings.
- Will your super go the distance – and can you really predict with confidence how long it will need to last?
- Six super-charged investment tips to take your super further.
- Your super investment strategy – why you should revisit your plan.
Insights Newsletter: Starting Earlier for Super Results
(487kb)
Property Dream May Prove an Illusion
First Released: August 2006
Just because you can touch bricks and mortar does not mean residential property is the best investment option. Indeed, there are many alternative investments that can – and do – deliver better returns such as Australian shares and international shares. So while residential property should not be ignored as part of a diversified investment portfolio, it should be treated as no more than just a slice of the total investment pie.
Quick Overview
- A diversified share portfolio will deliver stronger returns over the longterm while offering greater liquidity and lower costs.
- Rising interest rates, low housing affordability and high valuations will temper the positives of low vacancy rates and higher rents. Australia ranks among the top countries in the world in terms of lack of affordability and overvaluation of residential property. State-by-state rundown on property outlook.
Insights Newsletter: Property Dream May Prove an Illusion
(511kb)
Spotlight on the Budget
First Released: May 2006
On Tuesday 9 May 2006, Peter Costello delivered his 11th consecutive budget to the nation. Whilst these changes are only a proposal at the moment, if implemented, they could be the most significant to superannuation in Australia since the introduction of compulsory superannuation contributions. In this edition of Insights Paul Carrington outlines the items from the Budget that he believes will be of interest to investors.
Quick Overview
- No tax on super payments.
- Greater flexibility in drawing benefits.
- Changes to contribution limits.
- Changes to qualifying for the age pension.
- Simplification for those receiving a pension income.
- Greater opportunities for the self-employed.
- RBLs and Contribution Splitting out.
- ETPs no longer eligible for super.
Insights Newsletter: Spotlight on the Budget
(468kb)
The Cycle of Life
First Released: February 2006
Life is a series of milestones - some joyous occasions and others, more serious events, each carrying financial implications. Sometimes we become so wrapped up in the events that we fail to consider the associated financial obligations. The issues covered in this article are designed to give you an overview of the many factors that can influence your finances when a major life event occurs.
Quick Overview
- Marriage means you'll be making many future decisions as a partnership.
- When raising a family you need to consider safeguarding your child's future in case something should happen to you.
- If you're facing a divorce, maintaining your finances is critically important.
- Prior to reaching the big turning point of retirement, you'll need a careful plan to help ensure that your accumulated money will be there for you.
Insights Newsletter: The Cycle of Life
(368kb)
Note: These articles are presented in PDF format. You must have Adobe Acrobat Reader installed on your computer to view PDF files.