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Money market funds - There's no such thing as a risk free asset

09 December 2014

The fallout in South African money market funds from the collapse of African Bank is a timely reminder that these investments are not completely risk free. Small capital losses have sparked big runs on money market funds in other markets. Investors should be sure to put as much emphasis on return of capital as they do on return on capital, regardless of asset class.

The four myths of market volatility

09 December 2014

Nassim Taleb, renowned author and fierce critic of all who take comfort in statistics, once chose the snappy title of ‘We Don't Quite Know What We are Talking About When We Talk About Volatility’ for one of his papers. Even if you haven’t read this particular Taleb paper, you may have heard comments such as:

All about the oil

09 December 2014

Financial markets have been dominated by the collapse in the oil price over the past few weeks. The fall in the oil price is partly due to lower-than-expected demand because of slower global growth. It is easy to forget that China’s nominal economic growth rate has halved since 2011, while Japanese and European growth is also disappointing. According to the International Energy Agency (IEA), global oil demand in the third quarter of 2014 was estimated 93.06 millions of barrels per day (mbpd), up from 91.02 mbpd two years ago. All the action has been happening on the supply side. According to the IEA, oil supply has surged to 93.6mbpd from 90mbpd in the third quarter of 2012. Most of this increase comes from North America, where shale oil has doubled American output over the past five years, and is set to continue increasing as oil is extracted from shale and tar sands.

Lower oil prices to boost festive spending

02 December 2014

November is known as the month of the moustache in support of cancer awareness, but at least investors didn’t need hair on their teeth this month. Following the ups and downs of September and October, the past month definitely felt calmer. In fact, there were fairly solid performances across a broad range of local and global asset classes.

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The strongest deterrent against FSP compliance missteps is or should be:

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A criminal conviction Debarment Fine or penalty Any of the above can work

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