Investing often requires the forecasting of variables such as revenues and earnings. Every forecast is subject to (often immense) uncertainty, and the vicissitudes of the future can throw even the most well-thought out estimate far off the mark.

One of the things that characterises sophisticated investors is the way they use investment strategies that are designed to produce returns uncorrelated with equity market returns. These strategies include market neutral strategies, which are designed to profit from both increasing and decreasing prices in one or more markets, while also avoiding systemic market risk.

Most investors have an intuitive sense of the benefits of diversification: it’s easy to see how having all your eggs in one figurative basket could end very badly if the chosen basket were to hit the rocks at some point and most people are more comfortable spreading things around a bit to achieve more consistent and predictable results.

A “red herring” is known as something that distracts from a more important area of focus. There are numerous different attributions to the etymology of this saying.

Australian investors love their dividends, especially fully-franked dividends that can offer an appealing effective rate of income compared with fixed-interest alternatives, and it’s easy to understand why.

When you invest in a managed fund, your money (together with all other investors’ monies) is gathered in the one place and invested in assets.  Managed funds provide private investors with access to markets and strategies that rely on economies of scale.   For the funds on this website, Montgomery is the investment manager.