News and Articles

Yearly Archives: 2011

RSA Retail Savings Bonds: Fixed rate or Inflation linked rate?

  Consumer Price Index (CPI)  The inflation rate refers to the changes in the prices of a representative basket of goods and services (as determined and measured by Statistics South Africa) over a twelve-month period.  Inflation is highly cyclical over time; i.e. a period of lower inflation rates is followed by a subsequent period of … Read more

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Visualising Your Future Self (July 2011)

Financial researchers always have been puzzled by the disconnection between what people believe they should be doing financially, like saving more for retirement versus what they are actually doing (beliefs versus actions). Behavioural science together with the latest advances in technology, however, may offer fresh perspectives how to convince more people, especially younger generations, starting to take retirement planning more seriously. Read more

Posted in Newsletters

Predicting Future Returns

The objective of this study is twofold: One, even professional investors and investment advisors are not very good in predicting future returns and, perhaps contrary to their own beliefs, are unlikely to make good calls on asset allocation and/or timing decisions. Secondly, that these groups constantly underestimate the occurrence of “outlier” market returns, both positive and negative outcomes. These “outlier returns” are the most important determinants of overall market return over time, that is to say whether investors will only partially or fully share in market returns. In fact, it is the difference between ordinary and great returns! Read more

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