Peter Rodgers

Blog

November 22, 2017

The critical difference between desired and required returns

We probably all remember during those long difficult car trips as children repeatedly saying such irritating things to our parents as: “When do we get there?”. Perhaps adding to reinforce the point, “I knew we would never get there”. And then pleading whenever a fast-food joint appears on the horizon: “I NEED an ice cream”. Fast forward to today and think how we broadly face similar fundamental, yet much more complex, issues regarding our retirement savings. Astute investors set their long-term goals – the parallel being the destination of those seemingly-endless childhood road trips – and then work out how to get […]
November 1, 2017

How our investment past can damage our investment future

Most investors can probably have investment experiences that have shaped how they behave as investors in the future. For instance, an investment, in say, a single stock, may have been highly profitable as you happened to buy and sell at the right time. However, such an experience may give you make you overconfident in your abilities as an investor, including in your perceived ability to somehow pick future winners. By contrast, a past investment loss from perhaps buying when markets were at a high and selling after markets had heavily fallen may lead you to having an excessive aversion to […]
October 4, 2017

Investing: how to reduce concentration risk

Concentration risk. No, it’s nothing to do with thinking too hard about something. In fact, it’s more likely to be a result of not paying enough attention. Concentration risk is the increase in investment risk that comes about from not sufficiently diversifying your portfolio. In other words, too much money is concentrated in too few assets, sectors or geographical markets. This can happen: Intentionally, because you have a strong belief that a particular share or sector, such as resources, banks or property, is likely to outperform in the future. Unintentionally, through asset performance. One or two shares deliver spectacular gains, […]