[Smart Investing] Total return investing

Investments and personal finance insights from Vanguard Australia

05 February 2020 Hi everyone, The news about the ongoing coronavirus outbreak continues to drive home the point we made the other week about the need for a long-term financial plan that takes into account unforeseen events occurring in our everyday lives and potentially blowing us off course. In addition to the human impact, the outbreak has provoked fear in the financial markets. In the wake of this, Vanguard's investment strategy team has sought to provide context on the potential effects to the economy and markets of the virus, which we have included in this week's edition. We also address another two questions from readers - asking for our perspective on structuring a portfolio in retirement to provide income and preserve capital and about safe havens. As always, feel free to email us with your questions or feedback. Until next week. Robin Bowerman Head of Corporate Affairs Vanguard Australia

Total return investing By Robin Bowerman It wasn't long ago that the common view was to save and invest through your working life and then retire to a portfolio that delivered at least a 5 per cent income yield every year. But in an era of all-time low interest rates, that plan no longer works. Read more

How safe are safe haven assets? By Tony Kaye Safe haven assets can serve a purpose in sheltering from market storms, but having an investment strategy with a long-term focus that incorporates a broad range of assets is ultimately the safest harbour. Read more

A challenge for China and investors By Robin Bowerman The ASX saw $36 billion wiped when the opening bell rang on Tuesday 28 January but performance rose again soon after, and continued to sit around the 7000 point mark at time of writing. Although the markets are experiencing jitters, it would be prudent for investors to stay calm and remember one's goals and to stay the course. Read more

Vanguard in the news Morningstar's tribute to Jack Bogle Morningstar | Staff Reporters | 29 Jan 2020 "I remember Jack for many, many reasons, but most of all for his optimism and the fact that he really believed in helping the small investor and ensuring that that investor could have that great outcome that he or she was looking for". To read more, please visit the Morningstar website. Please note the link above will show a copy of the article (where freely available), or the publisher's website if a subscription is required.

In case you missed it Global investing By Robin Bowerman There are plenty of good reasons why Australian investors feel more comfortable investing at home but this preference often comes at the cost of returns. It's a problem not just because of the small size of the Australian market, which is less than 2 per cent of global market capitalisation, but also because it creates a natural bias in portfolios against certain industries and in favour of others. Read more The importance of cost in retirement By Aidan Geysen Retirement is complex, and in spite of the volumes of research on the topic, there are rarely simple answers to the many questions that are raised for those moving into retirement. There is however one simple concept that is universally true, and that is, all else being equal, that a lower cost product will produce more retirement income than a higher cost product. Read more

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