I thought this article may of be interest to the readers of my blog. My sense is that some Australian investors may rely too much on historical returns from the best global equity markets in history.
From time to time I write for other financial web sites on topics that I am interested in. Sometimes I also receive a small payment. This was one such example and not to be taken as any sort of financial advice or recommendation of products or services.
The article that I have written for Financial Framework’s website will cover off on what I consider are underappreciated factors of sensible global asset allocation. Financial Framework’s runs by the principle of With Framework Comes Confidence, meaning that when you place a framework in your finances you can improve your certainty around certain outcomes. To view the article please visit this link Factor’s to Consider When Going Global with Your Asset Allocation.
In the months ahead I plan to write a related follow up post. It shall explore how different LICs may influence my own thinking in light of the above topic.
Another reason I felt this may be topical, is that two of the great performing markets of the last century enjoyed excellent Q2 performance. By my reckoning a quick glance at some popular ETFs indicate to me that Australian investors may have gained about 8% in this period with broad based index exposures to Australia & U.S. equity ETFs. If you chose an ETF reflecting the MSCI World index ex U.S. on the other hand, it would have instead been a loss of around 5%. That is food for thought if you have felt you have been over exposed to Australia and the U.S. but perhaps haven’t got around to doing much about it.. I wish that would have been the case with myself over the last quarter but unfortunately not! Please check out the link to the article here that I referred to earlier to read. Draw your own conclusions and remember to check back on the blog in 2118 to see how the next 100 years fared!