Retirement Portfolio Resilience Perspective
Primary Pillar: Risk Pricing Discipline
Supporting Pillars: Retirement Portfolio Construction • Resilience Across Market Environments
This inaugural edition of Gyrations introduces a disciplined framework for interpreting market conditions through observable evidence, market pricing and portfolio construction rather than relying solely on opinion or prediction.
Viewed through today's Retirement Portfolio Resilience Framework, the enduring contribution of this publication is its emphasis on understanding how markets are pricing uncertainty and using that information to guide disciplined commercial capital allocation. While the investment commentary reflects the market environment in which it was written, the underlying philosophy of evidence-based decision making, resilient portfolio construction and reducing dependence on favourable market conditions has remained central to the evolution of Retirement Portfolio Resilience.
This inaugural publication forms part of Gyrostat's historical research archive documenting the evolution of the Retirement Portfolio Resilience Framework.
We're pleased to launch "Gyrations" to provide insights into risk management of an equity portfolio. This is aimed at investors wanting facts, based upon the flow of money, not endless opinions or predictions.
- We detail investor sentiment and key upcoming data released with market pricing of outcomes.
- Our investment view is that interest rates will stay low for an extended period, and stock market volatility will increase. During 2012-2016 the level of volatility was low by historical standards. Our expectation is that volatility will increase, leading to “risk-on”, “risk-off” investing market characteristics only distantly related to fundamentals.
- The “traditional” approach to investing directly in blue chip high yielding shares, or conventional income funds, leave investors fragile and exposed to falls in the value of investments. Falling interest rates and rising market volatility are ideal market conditions for risk managed equity income funds with a “hockey stick” payoff always in place. The more volatility, the more opportunities there are to capture upside and re-balance the portfolio.
