In a communication issued yesterday, KPMG partner Damian Ryan said there are overlaps between the famous race that will be held later today and the Australian investment management sector.
“The other race that literally stops the nation is superannuation,” Mr Ryan wrote.
“The question for members is: ‘will I still have sufficient funds in my superannuation account to live a comfortable lifestyle in retirement until I reach the finish line?’
“All everyone is hoping for is to get down that final stretch of that (hopefully) long straight in a dignified manner.”
First, while the Melbourne Cup has a more estimatable and certain length than the lifespan of superannuation members, “managing longevity risk” is a key goal for both, he said.
Second, the success of both horses and super funds can in part be predicted by past performance, Mr Ryan suggested, though adding that it of course is not necessarily an indicator and more of a “good guide”.
Third, high weight counts in racehorses and high fees in super funds are somewhat analogous, he suggested.
“High weights are a bit like high fees, horses with them can win as long as they actively select the best return,” Mr Ryan said.
Finally, he suggested that prudent and skilled management is a major factor in both pursuits.
“A good jockey, like a good CEO or investment function, can improve a horse many lengths,” he said.
Conforming to an annual tradition, Mr Ryan also offered his tips for the 2017 Melbourne Cup, listing Marmelo, Almandin, Red Cardinal and Wall of Fire as horses to watch.
“Good luck and happy punting,” he concluded.
Glad I didn’t take his tips in hindsight. The rest of the article was OK
He didn’t mention that like horses (that are beaten, drugged and sometimes die in the race) some investors are over-geared, encouraged to take too much risk and will blow themselves up if the circumstances are unfavourable because they just tried too hard. Just like the cup, the “minders” of investors most often have their own interests way in front of their “horses”.
A somewhat desperate attempt to staple the topicality of the Cup to an article which offers minimal insights into superannuation. A good article by today’s standards…