It has been a gruesome couple of months for investors in Australian stocks.

At the start of August, the chatter was whether the benchmark S&P/ASX200 would hit 6000 points. It is now mid-October and the hard reality is an index that is hovering closer to 5000 – although this week long suffering investors were treated to some hefty gains.

Often we talk of investing as a science, a predictable and measurable outcome driven by inputs and outputs. When it comes to investing, the equation is simple, or so the theory goes. The company must be fundamentally strong and growing or paying a good dividend. 

The three risks in life are living too long (i.e. running out of money), dying too soon or becoming disabled. I wish to focus on becoming disabled. One can either self-insure for this which for most people are not in a position to do or offset it by taking out disability insurance.

It has been said that people spend more time planning their next holiday than planning for their retirement. My advice is, don’t be one of those people. After all, when you consider that you have worked hard all your life, you want to be able to enjoy the fruits of your labour.

1

Jack Ma,

Founder Alibaba

“Never give up. Today is hard, tomorrow will be worse, but the day after tomorrow will be sunshine.”

2

Warren Buffett, CEO Berkshire Hathaway

“You only have to do a very few things right in your life, so long as you don’t do too many things wrong”.

3

Mark Zuckerberg, Co-Founder Facebook

“The biggest risk is not taking any risks. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”

4

Jeff Bezos, Founder Amazon

“We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we are successful: put the customer first, invest, and be patient”.

5

Larry Ellison, Founder Oracle

“I have had all the disadvantages required for success.”

6

Michael Bloomberg, CEO Bloomberg

“You must first be willing to fail – and you must have the courage to go for it anyway”.

Ageing populations could be a boon rather than a curse. But for that to happen, a lot needs to change first, argues Sacha Nauta in The Economist

“NO AGE JOKES tonight, all right?” quipped Sir Mick Jagger, the 73-year-old front man of the Rolling Stones, as he welcomed the crowds to Desert Trip Music Festival in California last October.

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Over the last few weeks I have read several articles suggesting investment returns will be lower in the future. One article says there is a Wall St consensus that people should not make their plans expecting the high returns of the past to continue.

At 11pm on the night of 9 November, members of the Summer KiwiSaver Investment Committee discussed our asset allocation. I Chair this committee and Trump had just been elected - a whole new investment environment with new opportunities and new risks had been dropped on us. We decided meet formally the next day.

The S&P 500 has returned more than 11 percent since the election of President Trump on Nov. 8, adding a bit of renewed thrill to a bull market that’s already eight years old. Clearly, investors are feeling optimistic about the prospect for returns. But many companies that put individual investors’ money to work for the long run have been arguing for lower long-term expectations.

The problem with retirement planning is that everyone’s lifestyle differs in style and cost. There is no universal amount that needs to be saved by the time you hit retirement to ensure you have saved “enough”. What you need to work out is your own personal number. Then you need to determine if you are going to achieve that number or whether there is going to be a shortfall. If there is a shortfall, you need to decide what you are going to do about it.