The first asset allocation quilt I created for this site covered the ten-year period from 2005-2014.

Those returns look nothing like the last 10 years which is the whole point of this exercise.

One of my favorite market datasets just got its annual update.

Aswath Damodaran at NYU publishes a yearly update of returns for stocks (S&P 500), bonds (10 year Treasuries), cash (3-month T-bills), real estate, gold and inflation going back to 1928. Plus this year he added small caps to the mix.

Against a backdrop of geopolitical tensions, economic challenges, and electoral uncertainty, 2024 proved the resilience of public financial markets and the power of human ingenuity once again. Markets continued to do what they do best: efficiently process information and set fair prices, rewarding long-term investors with positive returns.

For investors, 2024 was a year of surprises, defying many of the predictions that economists and strategists made at this time last year. In particular, consider the remarkable gains in the S&P 500 Index, which was on track to close up more than 25% for 2024, well ahead of Wall Street analysts’ forecasts, in one of its strongest annual performances of the last quarter-century.

What made 2024 so extraordinary for the U.S. economy and markets? And can these exceptional circumstances persist in the new year? Here are five surprising developments that Morgan Stanley’s Global Investment Committee believes warrant closer examination heading into 2025.

When it comes to investing, a big obstacle many people face is the fear of catastrophe. If you invest in a stock, there’s always the possibility that the value may drop to zero. In fact, we used to have a wall in the office lunchroom that was covered with stock certificates from liquidated companies.

Ever heard of the ‘Santa rally’? And no, it’s not a Father Christmas-themed motorsport… although that would be brilliant! It’s a performance trend that investors have seen over the decades, where the stock market tends to increase in value around the end of the year. In this article, we explore this festive phenomenon and look at what it could mean for your investments.

In an election with significant implications for investors, Republican presidential candidate Donald Trump has been declared the president-elect, signalling a potential continuation and expansion of policies from his first term. As the final votes are counted and the possibility of recounts looms, the focus shifts to the implications of a second Trump administration, particularly concerning tax policies, trade tariffs and deregulation efforts. Here’s what investors should be watching. 

Politics has been a focus for markets in 2024, with about 60% of the global population voting in elections in at least 76 countries. Of course, the big one is still to come. The US presidential election, scheduled for 5 November, is dominating headlines, prompting questions from investors in Australia and New Zealand about how they should respond.

Morningstar is a firm believer that a goals-based investment approach is the best way for investors to achieve their objectives.

Understanding what you are trying to achieve is a critical step in designing an investment strategy. It also allows you to track progress towards your goal and course correct as needed.

By the time you retire, you will have heard and read about all kinds of financial advice. Some tidbits of advice get repeated so frequently, you might believe they are true. The truth is, however, that following some of these rules could get you in trouble. Here are six financial myths you should ignore.

Household net worth is at all-time highs.

Housing prices are at all-time highs.

The stock market is near all-time highs.

But not everyone is feeling great about their finances.

There’s plenty of investment advice out there based on what one must do to be successful.

You don’t see many people who take the opposite approach and talk about what you shouldn’t do.

There are many ways to succeed as an investor but only a few avenues to failure.

Regular Olympic watchers will know the biggest medal hauls are traditionally won by one of a select few nations. Since 2004, for instance, our exhibit shows the USA has appeared at the top of the overall medal table on three occasions, and second or third on two occasions.  Other G7 nations and Russia usually feature near the top, although Australia has punched above its weight, placing in the top 10 in all the summer games in the past two decades.

Hendrik Bessembinder has produced some of my favorite stock market research.

Bessembinder discovered that four out of every seven stocks in the U.S. have underperformed cash (one-month T-bills) since 1926. And just 4% of companies accounted for all the wealth gains for the entire stock market in that time.

The stock market runs on power laws over the long run.

Of course, there are stocks that do well over short time frames, but Bessembinder’s research highlights the benefits of diversification to ensure you take part in those big winners over time.

The most motivated and successful people take a problem, outline a solution, and relentlessly pursue it. This is a good model to achieve success. And following it creates momentum. It provides a sense of empowerment as obstacles are overcome. It is self-motivating as each milestone is achieved and each new one appears on the horizon.

Chances are, you’re not putting enough money aside for the retirement you want.

A recent Retirement Commission paper noted that while the KiwiSaver scheme had seen many more people saving for their retirement, there was still room for improvement.

The Commission’s policy lead, Michelle Reyers, told Breakfast last week it was still early days as to whether KiwiSaver would mean people save the money they needed for retirement.

Today’s story looks at two key factors that determine the answers to the big questions when planning retirement finances: ‘How much do I need?’, and ‘How much can I afford to spend?’ - in order to have confidence that you can maintain your living standards, not run out of money, and not have to rely on welfare.

These two factors are: your current age, and your likely life span. In particular, we highlight the four big problems when relying on ‘life expectancy’ tables that are used throughout the financial advice and retirement industry.

Ben Carlson's straightforward no-nonsense approach is exactly what you need when it comes to money advice. And the admiration of his many fans stems from his ability to deftly combine investor psychology and data in his narratives.

This is part of a series where I attempt to understand the behavioural traits and mindset of money managers and investors. At the end of this (slightly edited) transcript, I have listed the 20 individuals interviewed for this series.

A reader asks:

I am 60, retired and have a substantial portfolio ($14M not to brag) invested in index funds 60/40 at the moment. I have enough money to live off from defined benefit pensions for the rest of my life, but I keep swinging from one view to another depending who I read. Some famous passive advisors say don’t take any risk unless you have to while others say you should be invested all in stocks because you don’t need the money anytime soon and should be leaving a legacy. Depending on how I feel and what the market is doing I target somewhere between a 50/50 portfolio and a 75/25. How do I square this circle?

That’s a lot of money.

Tune in to the podcast below where the hosts interview our Managing Director, Nick Crawford as he explains what to do and what not to do as a lotto winner.