Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 59

Weekly newsletter to subscribers features important investment insights

Extract from Cuffelinks Newsletter Edition 59

Many of our readers and writers are away at the moment, and Cuffelinks will not be publishing its usual original content this week. However, a couple of articles have come across our desk that deliver insightful Anzac Day reading between two-up throws.

The first is from Howard Marks of Oaktree Capital. He has been writing memos to his clients for 25 years, and the latest asks useful questions for all investors. What do you believe in? What principles lie behind your decisions? Investors should consider:

  • Do efficient markets exist? Is it possible to 'beat the market'?
  • Will you emphasise risk control or return maximisation as the primary route to success?
  • Will you put your faith in macro forecasts and adjust your portfolio accordingly?
  • How do you think about risk? Is it volatility or the probability of permanent loss?
  • How do you view the question of determinism versus randomness or luck?
  • Most importantly, how will you define success, and what risks will you take to achieve it? In trying to be right, are you willing to bear the inescapable risk of being wrong?

That’s a worthwhile list of questions. If we’re going to dare to be great, Marks asserts, we have to dare to be different. And wrong. The April 2014 memo, 'Dare to Be Great II' is linked here.

The second study is the 20th annual Quantitative Analysis of Investor Behavior (QAIB) from Boston-based DALBAR Inc. It claims that while the S&P500 index has risen 9.22% pa over the last 20 years, the average investor has earned only 5.02% pa. DALBAR argues investors are irrational and buy high when markets are strong, and then panic and sell low when markets weaken. Investment returns depend more on investor behaviour than fund performance. They say investor education is failing, because the best advice is to invest more money, hold on to the investments and manage them safely rather than trying to time the market. Focus more on achieving personal financial goals than performance.

While the study has its criticis, it also has valuable lessons, and DALBAR offers a free look at the full report here.

 

RELATED ARTICLES

Ben Graham’s three most enduring principles

The ASX's 16-year drought: a rebuttal

Even Warren Buffett lost his edge 20 years ago

banner

Most viewed in recent weeks

Finding the best income-yielding assets

With fixed term deposit rates declining and bank hybrids being phased out, what are the best options for investors seeking income? This goes through the choices, and the opportunities and risks involved.

What history reveals about market corrections and crashes

The S&P 500's recent correction raises concerns about a bear market. History shows corrections are driven by high rates, unemployment, or global shocks, and that there's reason for optimism for nervous investors today. 

Howard Marks: the investing game has changed

The famed investor says the rapid switch from globalisation to trade wars is the biggest upheaval in the investing environment since World War Two. And a new world requires a different investment approach.

Welcome to Firstlinks Edition 605 with weekend update

Trump's tariffs and China's retaliatory strike have sent the Nasdaq into a bear market with the S&P 500 not far behind. What are the implications for the economy and markets, and what should investors do now? 

  • 3 April 2025

Designing a life, with money to spare

Are you living your life by default or by design? It strikes me that many people are doing the former and living according to others’ expectations of them, leading to poor choices including with their finances.

World's largest asset manager wants to revolutionise your portfolio

Larry Fink is one of the smartest people in the finance industry. In his latest shareholder letter, the Blackrock CEO outlines his quest to become the biggest player in private assets and upend investor portfolios.

Latest Updates

Investment strategies

An enlightened dividend path

While many chase high yields, true investment power lies in companies that steadily grow dividends. This strategy, rooted in patience and discipline, quietly compounds wealth and anchors investors through market turbulence.

Investment strategies

Don't let Trump derail your wealth creation plans

If you want to build wealth over the long-term, trying to guess the stock market's next move is generally a bad idea. In a month where this might be more tempting than ever, here is what you should focus on instead.

Economics

Pros and cons of Labor's home batteries scheme

Labor has announced a $2.3 billion Cheaper Home Batteries Program, aimed at slashing the cost of home batteries. The goal is to turbocharge battery uptake, though practical difficulties may prevent that happening.

Investment strategies

Will China's EV boom end in tears?

China's EV dominance is reshaping global auto markets - but with soaring tariffs, overcapacity, and rising scrutiny, the industry’s meteoric rise may face a turbulent road ahead. Can China maintain its lead - or will it stall?

Investment strategies

REITs: a haven in a Trumpian world?

Equity markets have been lashed by Trump's tariff policies, yet REITs have outperformed. Not only are they largely unaffected by tariffs, but they offer a unique combination of growth, sound fundamentals, and value.

Shares

Why Europe is back on the global investor map

European equities are surging ahead of the U.S this year, driven by strong earnings, undervaluation, and fiscal stimulus. With quality founder-led firms and a strengthening Euro, Europe may be the next global investment hotspot.

Chalmers' disingenuous budget claims

The Treasurer often touts a $207 billion improvement in Australia's financial position. A deeper look at the numbers reveals something less impressive, caused far more by commodity price surprises than policy.

Fixed interest

Duration: Friend or foe in a defensive allocation?

Duration is back. After years in the doghouse, shifting markets and higher yields are restoring its role as a reliable diversifier and income source - offering defensive strength in today’s uncertain environment.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.