The other had a heart attack in his sleep one night, and his death was a tremendous shock. Besides the personal tragedy involved, in both instances their estates would pass into the hands of wives who had little or no involvement in managing their investments. Both are tough women who can deal with the stress but not everybody has their kind of steel. One wife consulted the financial adviser her husband had used, but the other scrambled to fit the financial pieces together.

SMSFs have additional complexities. Most are administered by a trustee who dominates the decision-making, most often the husband, though women tend to live longer. The surviving spouse may not want to manage the investments going forward, there are tax and estate factors and some assets may not be liquid.

Some of us may, due to health or financial considerations, be in greater need than others, but all of us should take the time to know what our spouses or partners ought to do or know if we should become someone who dies or is otherwise incapacitated. It is unwise to make major decisions at a time of grieving. However, the investment strategy is an essential document that all SMSF trustees must have in place, and to review it regularly. All non-dominant trustees should have a trusted financial adviser, someone they could turn to, in mind.

People who say it is too early in their lives to worry about such a morbid subject, but do they know what life expectancy really means? In a recent newsletter that looked at this issue from a different angle, former leading asset consultant, Don Ezra, wrote, “Most people likely know that the average age at death is in the early 80s, but not many are aware of the age distribution of deaths. He wrote:

“If we don’t have a rough, gut feel for how big is the uncertainty, we’re going to be making totally inappropriate decisions the distribution is so very, very wide. That means that longevity is a major risk and we should be thinking about it, especially for those of us who are risk averse.”

Ezra asked five of his friends to guess what one standard deviation of the longevity data could be. (Stay with me here. Standard deviation is, simply, a measure of variance around a mean, and one SD is about 68 percent of samples here, ages at death and two SDs is about 95 percent of samples). Ezra reports:

“One of my fellow actuaries got into the right mind-set. A handful will live to the age of 100, he said. Let’s call that a two standard deviation event. If the average age of death is 81 then 19 more years is pretty close to 2 standard deviations. It became sort of a standard deviation' so roughly speaking, 10 years.”

Which is about right. Most of Ezra’s friends guessed below the actual number. What this means is that while life expectancy is great for telling you how long you are probably going to live, the thing is, there are going to be outliers like my friends who will live a lot longer less. Often we worry about living too long but think about if you kick the bucket sooner than planned.

And to top it all off, last week The Economist reported that life expectancy is declining in many countries:

“For an idea of just how much damage the virus has wrought by this (life expectancy) metric, a team of researchers from institutions in Britain, Denmark and Germany looked at life expectancy in 28 countries and Northern Ireland before and after the start of the pandemic.”

It has been shocking to read this week how much of Europe is dependent on Russia for its energy. Austria is 100 percent dependent on Russia; Germany 50 percent. With oil at US$90 a barrel, Russia is making US$1 billion day in hydrocarbon revenues and that can purchase a lot of hardware. By contrast, the US now produces enough petroleum for its own needs. This means the increase in the price of oil and dependency on the supply has a different economic and geopolitical impact on the US and other countries. Even where the US does import oil, half comes from Canada.

In this week’s, a welcome return to Peter Thornhill who updates his “mothership” chart to again demonstrate the advantages of hanging onto dividend-producing shares over other asset classes, cash particularly. Peter isn’t one for diversified investing, but to be a true disciple, you need an extremely high risk tolerance over a long time horizon.

How many people know that Stephen Jones, the ‘shadow’ Labor minister in Jane Hume’s financial services and superannuation portfolio (although Hume has a broader remit), is running things? Because Labor have a fighting chance at the May election (current Betfair odds, Coalition $3.15, Labor $1.46) it’s good to know what he thinks of super, advice and other aspects of the portfolio.

There are some super interesting changes happening in the media space that maybe older generations of investors just don’t know about. The video game industry is larger than Hollywood. You can also virtually read Jody Johnsson and Martin Romo on the disruption of traditional media, including some of the market's darling stocks.

Though there is obviously much debate about the effects of inflation and possible war, Shane Woldendorp says many firms were already falling and vulnerable because of their exorbitant valuations. There is no place to hide.

That will make the new Design and Distribution Obligations (DDO) arcane to most investors but many issuers just bury the regulations in the paperwork. But not so with bank hybrids. Norman Derham reveals how access to this staple of many retiree portfolios is changing, already evident in a new ANZ Bank issue.

However responsible asset allocation is, all portfolios will change as the values of their underlying assets increase and decrease. Taking a 'total return' approach in a low rate environment, investing for income/capital appreciation is usually a good approach, but perhaps investors should do a bit of a reshuffle in this context equities look a lot more appealing to Inna Zorina.

Michael Batnick is a US-based financial adviser and author of a regular newsletter who showed last week an intriguing correspondence with one of his readers. After a lifetime of investment, the reader has concluded that listening to all of the market pundits is a “colossal waste of time.” There is at least one good reason, though, that it is worthwhile.

Driving the Narrative this week is Neuberger Berman’s Asset Allocation Committee Outlook 1Q22, which argues for holding risky assets through 2022.

There is super-lively debate on my article to LIC discounts but readers made some incorrect comments so I need to clarify two things. First is the claim that ETFs can't get franking credits, which is incorrect, and the second is that NTAs don't factor into ETF prices. But that's not necessarily true ... ETFs price off NTA. But the Comment of the Week comes from John on the short-let apartments piece. John described how these properties were a disaster and yet so many people believe they are safe investments.

“Great article; nailed it on all points. As a public accountant I have witnessed examples of such 'investments' owned by clients first hand and at great detail! The last example realized a 32% loss (selling price of contract vs. purchase price of contract) over a 12 year hold period.”