What are your Investment Rules?

[kiora]

Are we seeing this here? Likely
https://finance.yahoo.com/news/surve...163053034.html
"The survey revealed that the younger cohort focused their asset allocation on alternatives, and many expressed plans to allocate even more to these investments in the next few years.

Pelzar said this projected increase is “largely reflective” of the younger cohort’s thoughts on the growth opportunities in the market. Because some of the alternative asset classes are less liquid, Pelzar said this implies that the younger generation is taking a longer-term view."

[kiora]

This is why someones residence/beach house should not be considered in the same way as an investment portfolio is.
It should be a lifestyle consideration
The time to "insure" is when the property is brought.Only buy a property that is potentially affected by climate risk if it can be self insured.
Only build if the building can be built without mitigating against flooding,encroachment by the sea and subsidence.


https://www.newshub.co.nz/home/money...ay+3+July+2024

[kiora]

"Dogs of the ASX for the 2024 Financial Year"
https://www.livewiremarkets.com/wire...erm=TOP%20DOGS

[kiora]

"'Saving Like A Pessimist, Investing Like An Optimist'"

https://finance.yahoo.com/news/bill-...155055431.html

"He insisted on always having enough cash in the bank to keep the company running for 12 months, even if revenue dropped to zero. This conservative strategy ensured Microsoft’s survival during potential downturns and provided a solid foundation for growth."
" advocated for optimism in investments. He believed in the long-term potential of markets and technology, making bold bets that ultimately paid off."

"Build an emergency fund (save like a pessimist): Aim to have 3-6 months of living expenses saved, preparing for unexpected challenges.
Invest for the long term (invest like an optimist): Despite market fluctuations, maintain faith in the long-term growth potential of diversified investments.
Balance risk and security: While taking calculated risks for growth, ensure a safety net to weather short-term storms.
Continuous learning: Stay informed about financial markets and emerging opportunities, adapting your strategy as needed.
Plan for the worst, hope for the best: Create contingency plans while working towards ambitious financial goals"

[kiora]

Repetition !!!!

[kiora]

Sometimes the simplest,dumbest ideas are winners

"This is the most pointless website on the planet. It’s fantastic"

https://www.nzherald.co.nz/lifestyle...PS2DAQGZASPL4/

[kiora]

How to make money in Private Equity

Larry Fink/Blackrock are working on it.

https://www.dailymail.co.uk/news/art...BlackRock.html

https://www.efinancialcareers.com/ne...-o-hare-preqin

[kiora]

The markets have got a few years to run yet?
The portfolio has been 100+% invested for last 12 years now.
What's the risk of lower returns when the portfolio is up so much, 5XX% in 12 years?
Flat returns,so what?
Their is always the risk of selling too early/too late AND also buying too early/too late

"Paul Moore on why having an exit strategy is crucial with markets at all-time highs
Markets are flying, stocks at all-time highs, and not a cloud in the sky. What happens when the wind changes...Do you have a strategy?"

https://www.livewiremarkets.com/wire...all-time-highs

"Five attributes of a selling process
In the article Moore penned recently on exits, he highlighted five key attributes. They are listed below, followed by some commentary on certain elements.

1.Start with the end in mind
2.Valuation focus
3.Patience
4.Resist selling winners too early
5.Capitalise on volatility

Start with the end in mind"

Personally, I've stopped trying to time the market with the portfolio

[kiora]

"How Lazard's Philipp Hofflin uses 150 years of data to find the best ASX income stocks"

https://www.livewiremarkets.com/wire...rm=READ%20MORE

Can you live with flat portfolio returns?

"If we end up getting a recession, historical evidence tells us that dividend income will be lower by about one-third, says Hofflin, and that it takes about 5-6 years to get from peak, to trough, and then back to the peak in such a scenario.

“So there's no doubt downturns hurt. At the same time, they're not the end of the world. You always get back to your peak, and you keep on going after that, and you get increases.
“In fact, in the very long run - again 150 years in Australia - dividends have grown by 5% per annum, which is a very nice number", says Hofflin.
What makes for a great income stock?
Lazard looks for three key factors when considering income stocks with a sustainable dividend for the portfolio. They are;

A sustainable payout ratio – You don’t want a company that pays out an unsustainably high level of dividends, because every company needs some money to grow and if they’re paying it out, they’re running down the assets.
An appropriate level of gearing – Is the company too geared? If it is, that’s not sustainable.
Earnings sustainability – Can the level of earnings be maintained in future periods?
There is one more hurdle that a stock must clear, however.

“We will not buy a stock if it doesn't have capital upside” says Hofflin, adding that “Just because the dividend is nice, it doesn't mean that you want to lose money on capital.
We do not want to trade those two off”. "

[kiora]

Worth reading,in full !
It's a 2 horse race

"Why stock market volatility is "artificially low" and what it means for you"

https://www.livewiremarkets.com/wire...ARKET%20SIGNAL

Not for me but sounds like a good idea for some?

"
The cost of buying protection, as measured through the real-time prices of put and call options, is sitting near multi-year lows. But unlike other instances in the past, this cost has been subdued for some time. We haven't seen a VIX Index reading above 20 since the October 2023 mini-selloff. There hasn't been a reading above 30 since October 2022.

In the past, a subdued volatility reading has been a sign that investors have become very greedy and complacent. It's also served as a signal for buying protection against big falls in the share market - after all, they don't call it the 'fear gauge' for nothing.

But as Longview Economics' Harry Colvin explained to me recently, it's not always been a reliable indicator. Periods of low volatility can also be a signal that corporate fundamentals are very strong meaning there is no reason to sell.

The cost of protection
In brief, the CBOE VIX index is a real-time measure of the collective price of put and call options. Put options grant a right to sell an asset at a specific price by a specific date whereas call options grant a right to buy an asset at a specific price by a specific date. In this case, the asset is the S&P 500 but an option can be bought for any publicly-listed asset.

We also have an equivalent index in Australia, run by the ASX. The AS51 VIX Index, as it's called, is seen here in this chart against the ASX 200 itself.

So what does this all say to Alastair?
"It's suggesting that there's very low fear out there, particularly over the next month. Generally, low volatility is very good for equity markets because if markets are less fearful, typically they go up. It shouldn't be surprising then, that when you get market highs, volatility is also often at record lows, which is exactly what you're seeing at the moment in the US and, to a lesser extent, in Australia," MacLeod says.

Two notes of caution
MacLeod adds that he thinks this current bout of low volatility is not a symbol of strong fundamentals or exorbitant valuations. Rather, it may be a sign that volatility is "artificially low".

One reason is because of the bifurcated nature of today's stock market (where a few stocks go one way and the rest go another way):

"I think there are some reasons that volatility, particularly in the US, might be artificially low at the moment. Firstly, when you're talking about either the AS51 VIX [Australian volatility index] or the US VIX, it is the index level volatility and that's the volatility on the surface."

"Underneath that, 500 securities are going up and down. At the moment, in the US, you've got a two-speed market. You've got a top seven which comprise nearly 30% of the market that are the go-to stocks. And then, you've got the other 493 stocks where things are a lot tougher."
"The correlations of stocks moving in the same direction are at 15-year lows," he points out. "That's one of the reasons why index-level volatility looks very low but the volatility of individual securities has not come down by nearly as much. When something goes wrong, they will all start moving in the same direction again and that's when volatility will spike because correlations will also spike."

The other reason is a much more recent innovation - or hindrance, depending on your view - in markets: The rise of the zero days to expiry option (sometimes called a ZTE option).

"You've seen massive growth in zero days to expiry options and alongside that, big growth in short-dated option selling strategies where traders are systematically selling a lot of short-dated options. If there's been a massive growth in people selling options, then it makes sense that the price of volatility will come down as well."
What can you do about it?
If you, like Alastair, are concerned that equity markets continue to hit all-time highs in the face of a slew of macro headwinds, then there may be a case for buying protection through options.

"When volatility is artificially low, that lends itself well to buying options and buying protection. Can you buy protection a lot cheaper than what the risks are potentially suggesting? Our view is that buying protection on an equity portfolio is particularly cheap at the moment and it's something that, if you have the means and skills to do so, is an opportunity in the current environment," he says.

And given most investors can't perfectly time the market (unless you're a clairvoyant), there is a solid argument for remaining invested in equities and adding protection to portfolios.

"If volatility is particularly cheap, you can own that protection alongside owning equities. This way you receive the benefits of equity ownership, can enjoy the dividends, but you can help protect yourself against acute market selloffs," MacLeod adds."