Market Insights

All booms and busts produce their own lexicon. In the aftermath of the Global Financial Crisis (GFC), those two words, “systemic risk”, have now become part of today’s investment jargon. But I wonder how many investors really understand the concept, and especially how it currently relates to the Australian economy.

10 Sep 2013

The FOFA regime is slowly settling down. Well, perhaps. With the recent election of a Coalition Government, all bets could be off the table. Certainly, when in opposition, they made a strong commitment to revisit the FOFA legislation, although it remains to be seen what sort of priority it is for a new government that has come to office with so many priorities.

As if anyone needed reminding, we have recently been shown again by the movement in gold and our mining stocks such as BHP and RIO – very starkly – that investing is a complex process, and not ideally suited for the retail investor.

For many investors, and even practitioners in the markets, structured products are often not considered to be a necessary part of a well-constructed portfolio.  They can be seen as a new breed of investment yet to stand the test of time.

Structured products often get a bad press, even when they have performed in line with expectations. But it’s not deserved. They can play a significant role in an investment portfolio, and smart investors—and their advisors – who understand the risks appreciate this.

The financial services world as we knew it before the Global Financial Crisis has changed conclusively. This is evident in many ways, but three stand out.