Author Archive for Mirko Cardinale

Crystal ball revealed: what does the future hold for equity investors if this time is not different?

In my last blog I argued that even long-term equity investors are not always rewarded for the risk they are taking. It all boils down to the price they pay for stocks. With hindsight the best time to buy is when everyone rushes to the door and the worst time is when everyone scrambles to

June 11, 2015 Categories: Investment Strategy, Markets

Equity risk without a premium?

My last blog considered a range of plausible return outcomes for a multi-asset fund over the next 10 years and argued that a repetition of the bull run of the last 10 years requires a very constructive view on the equity premium. This premium is what economists Lubos Pastor and Robert Staunbaugh back in 2001

May 21, 2015 Categories: Investment Strategy, Markets

Asset allocation – are we doomed to low returns?

In my last blog I explored the harsh reality of today’s capital markets and what it means for return prospects of equities and bonds. In this blog I will consider whether diversification can save investors’ portfolios, and show that a traditional balanced allocation is unlikely to rescue them from meagre returns over the next decade.

Asset allocation: What if I have to start from here?

In my last blog I examined the importance of starting valuations for subsequent investment returns. It was fun to imagine we could pick and choose our investment scenarios, but it is time to stop pretending that a time machine is available. Sadly we can’t turn the clock back to the happy days of the end

Mar 11, 2015 Categories: Investment Strategy, Markets

Asset allocation: I wouldn’t start from here!

A local Irish man once told a visitor “If I were going there I wouldn’t start from here”. Financial advisers these days must be tempted to give the same advice to their clients. If we were able to choose the starting point of our long-term investment decisions I think everyone would be very careful to

Mar 6, 2015 Categories: Investment Strategy, Markets

The big questions in asset allocation: tough challenges and realistic answers

A famous Danish physicist once said “Prediction is very difficult, especially if it’s about the future”. This is very true of capital markets where forecasting the future direction of yields and prices is extremely challenging. Even so-called investment gurus often get them spectacularly wrong. In January 2010 Pimco founder Bill Gross famously said “The UK

Feb 26, 2015 Categories: Investment Strategy, Markets


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