Mon, 27 Jul 2015 16:55:33 GMT
How can the language of music help to decipher the jargon in pensions? Many industries and professionals carry their own technical language (“jargon” for everybody else), so it can be helpful to translate this into more familiar terms.
During her one week internship at Redington, A-level student Antara Roy did just this – read on to see how playing a flute is useful in learning how to prepare a flight plan:
"A passion of mine has always been music; whether it has been listening to ...
Mon, 06 Jul 2015 18:33:14 GMT
“When deciding how to invest a pension fund’s resources you must consider the indexation treatment of each liability tranche to get an accurate picture of the interest rate and inflation sensitivity of scheme liabilities”…
…was definitely not what was going through our heads when first joining Redington. It’s easy to look back just 10 months and laugh at those, frankly, basic questions.
The asset universe is an endless world of complexity. A world full of mystery and confusion.
Even the acronyms themselves were more than enough to deal with, ...
Tue, 30 Jun 2015 15:05:59 GMT
In my last Pensions Expert column, I wrote about the challenge for the new Pensions Minister in balancing short-term political expediency with truly progressive pensions policy.
If we are to achieve long-term sustainable retirement provision, policy needs to be aligned with long-term objectives rather than short-term vote-winning.
There have been calls from some quarters for the new Pensions Minister, Ros Altmann, to consolidate the changes made under Steve Webb and his predecessors and resist radical reform. Yet affordability of pensions is one of the UK’s biggest challenges ...
Tue, 23 Jun 2015 09:37:23 GMT
Because sadly, prioritisation doesn’t always mean doing the easiest thing first…. or the sexiest.
In their quest for performance, amateur cyclists, like a number of Trustees and CIOs, can sometimes focus their attention on the wrong things… in this respect, setting the right investment strategy is not dissimilar to cycling and gives rise to the same pitfalls.
We love to focus on the “sexy” and forget about the basics.
What’s Your Average Amateur Cyclist Got To Do With Investment Strategy?
Take your average enthusiastic amateur cyclist. You ...
Thu, 30 Apr 2015 10:55:26 GMT
The tax paid* on your overseas equity dividends is not usually top of the pile when talking about your investment strategy.
However, the issue is significant. Long-term returns can vary by up to 0.5% p.a between two identical global equity indices due to the differing treatment of dividends*.
30 years to 31.12.2014
Net Dividends Index
Gross Dividends Index
Source: Bloom ...
Thu, 16 Apr 2015 10:14:39 GMT
Negative interest rates don’t seem to make a lot of sense.
People value money now, more than potential money in the future. You need to pay people to deposit their money longer-term.
Think about it...
This means interest rates should always be positive. The lognormal distribution is often used for interest rate moves. This does not allow negative rates1. Besides, if it costs money to lend money, it seems likely that people will stop lending.
That’s the theory; what’s the reality?
Like a great many arguments this is ...
Mon, 13 Apr 2015 10:00:03 GMT
What does last week’s Pension Freedom Day mean for more than just the individual? The media coverage has been largely monochrome in its assessment of economic risk.
What about the big picture?
Opinion of the new policy aside, commentators seem to agree on one thing. ‘The risk’ is of retirees blowing their hard-earned savings in a spending spree and becoming dependent upon state welfare programs for maintenance. The imagined queue of new retirees outside Lamborghini showrooms and Luxury cruise operator offices makes for a compelling news story, after all.
Mon, 23 Mar 2015 09:00:00 GMT
Implementing our investment principles means that it would be useful to measure the complexity of different assets and asset allocations via a complexity ranking.
As complexity increases the average expected return tends to increase but the average fund manager fee also increases.
Increasing complexity can be a way of increasing returns without increasing risk.
Low complexity portfolios may not be the best solution for clients needing high returns.
Two of our investment principles are:
“Investment strategy should be as simple a ...
Tue, 27 Jan 2015 16:15:10 GMT
Tim Ferriss has enjoyed a cult following since publishing the “Four Hour Workweek” in 2007. Ostensibly, Ferriss’ book helps readers to pack in their 9-5, outsource all their quotidian responsibilities and instead, join the “New Rich” travelling the world, fulfilling their dreams.
One could be forgiven for dismissing the book as a tacky, get-rich-quick scheme. The title alone makes the book sound like an infomercial. Look beyond the marketing, however, and you will find a new perspective on time management and productivity. Ferriss combines established id ...
Wed, 07 Jan 2015 16:15:07 GMT
An old chess anecdote tells of how the Russian master, Nimzowitsch, was unsettled when his opponent took out a cigarette case and placed it next to the chess board during a match. Nimzowitsch, who hated cigarette smoke, immediately called the organizers and lodged a complaint. The poor officials argued that as the man had not lit up and there was no smoke there could be no complaint. “I know” retorted the great Nimzo, ‘but he threatens to smoke and you know as well as I, that in chess, the threat is stronger than the execution’.
As in chess, so may it be in ...