Learning from history
The past 25 years have provided a few lessons when it comes to investing, which could have helped today’s investors avoid massive losses during the recent market volatility and high profile collapses, according to Vanguard Group chief executive and chairman Jack Brennan.
With a 25-year history at Vanguard himself, Brennan said knowing what you own, why you own it and being comfortable with what you own were the key lessons to be taken from any major bubble or scandal.
“A simple rule of thumb to consider when investing is: if you can’t see it, can’t understand it, or can’t explain the reason for owning it, it probably shouldn’t be part of your portfolio,” he explained.
“Many of the most successful and most sophisticated investors follow this advice.”
Brennan added that a wise approach involved a balanced investment strategy, high quality and discipline, explaining that there would always be a ‘sure bet’, but that the best precaution was a little bit of scepticism.
“Recent high profile collapses demonstrate that investing in the ‘next big thing’ is not a certainty,” he said.
Recommended for you
As private markets garner mainstream attention, a panel of experts believe access to the asset class through managed accounts will become more widely available, providing opportunities for advisers to diversify portfolios.
While retail investors turned to blue-chip stocks last month, according to AUSIEX trading data, September saw advised investors switch into ETFs.
With the intergenerational wealth transfer underway in Australia, wealth managers are focusing on how they can attract the next generation of advisers to service these younger clients.
ASIC wants to expand proceedings against Equity Trustees to seek compensation for members following Macquarie’s agreement to pay $321 million over Shield failings.
