In researching which funds to select within portfolios, we think it helps to draw information and insight from data and perspectives not directly related to a specific investment option.
I collect data points, graphs and pictures which are collated to help this process and to assist George who is working more on the individual fund analysis.
Following on from my previous hopefully illuminating commentary, we begin this blog with the graphic illustration of how average life expectancy has risen.
The second picture illustrates the percentage of the world’s population deemed to be living in extreme poverty. The fall in these numbers could contribute to the rise in life expectancy.
This next picture is really just a reminder that perception of wants can be heavily influenced by perceived needs.
The graph below illustrates that the interest rate available on 3-month Treasuries is higher than for 10 years. This event has usually predicted a coming recession, as shown in the graph.
These two slides are for an ETF from Pimco for fixed interest debt called QUID. As you can see the yield has risen recently from below 1% to above 5%.
The assumption would be that this would be risky; holding bonds with long duration (timescale until they matured).
Well, no. QUID as you will see below has a duration of 0.5 years (6 months) is AA rated, so top of the pile and has a yield of 5.24%. Such returns haven’t been seen in at least a decade as the previous graph illustrates.
This next chart shows interesting data about house price rises over the last 40 years, up to the end of 2021:
This graph illustrates that smaller company shares (Russell 2000) outperform larger company shares post-recession:
This chart illustrates why investing in hedge funds is not a great idea. The people running it get rich, their investors would be better off in an S & P tracker.
Note: This is written in a personal capacity and reflects the view of the author. It does not necessarily reflect the view of LWM Consultants. The post has been checked and approved to ensure that it is both accurate and not misleading. However, this is a blog, and the reader should accept that by its very nature many of the points are subjective and opinions of the author. Individuals wishing to buy any product or service as a result of this blog must seek advice or carry out their own research before making any decision, the author will not be held liable for decisions made as a result of this blog (particularly where no advice has been sought). Investors should also note that past performance is not a guide to future performance and investments can fall as well as rise.