- From Fine Answers podcast – Ben Kemp & Jonathan Tolub
The hardest position to sell is the one that is working
Gold had a very good run. That is one of the reasons why it came out of the portfolios.
Most investors find it easy to sell something that has disappointed them. Selling something that has gone up is much harder, because it feels like walking away from a good thing.
“It is important not to fall in love with a position just because it has done so well,” says Jonathan Tolub, “and to always ask ourselves — does it still deserve its place in the portfolio?”
In the latest quarterly portfolio update on the Fine Answers Podcast, Ben Kemp of Burke Britton Financial Partners talks with Jonathan Tolub, Partner and Portfolio Manager at InvestSense, the firm’s investment partner, about inflation, interest rates, bonds and where the portfolios are positioned.
By Ben Kemp, Certified Financial Planner, Burke Britton Financial Partners.
KEY IDEA: The portfolios are not built on a prediction about where rates go next. They are built to hold up whichever way rates go — because that direction is, in Tolub’s word, unknowable.
Why gold came out
The case against holding gold, once it had run, was not that the price would fall. It was that gold pays nothing while you own it.
“Gold doesn’t have any income, doesn’t have any yield attached to it,” Tolub points out. “You’re only dependent on the price of it.” With defensive assets available that actually pay something, the question became whether gold still earned its place. The view was that it did not.
That is the discipline worth noticing, more than the specific call. A position that has performed well gets re-tested on the same terms as everything else, rather than being left alone because it has been good to you.
Past performance is not a reliable indicator of future performance.
Nobody knows where rates go next — including the banks
As of September 2026, inflation in Australia has been running above the Reserve Bank’s target band for more than a year, pushed by a mix of global pressure on energy prices and domestic pressure from rents, wages and services. Three rate rises in recent months have been followed by a pause, and the market broadly expects there may be one or two more before year end.
Ben makes a point that deserves more attention than it usually gets. Around eighteen months ago some lenders were pricing fixed rates well below variable — a fairly clear signal that the research desks expected cuts. They were wrong.
Tolub goes further: he does not believe the Reserve Bank itself knows where rates will be in twelve months, because too much of it depends on variables nobody in Australia controls.
“What we want to do is build resilient portfolios that can sustain either higher rates or lower rates,” he says. Not a forecast dressed as a strategy — a structure designed to survive being wrong.
Getting paid to wait
Government bonds have been an uncomfortable place to sit since about 2021. Expectations for inflation have swung around, and bond prices have swung with them, which meant a lot of movement for not much reward.
That maths has shifted. On Tolub’s figures at the time of recording, an Australian government bond was yielding around 5% to maturity, with very little credit risk attached — the chance of the Australian government failing to repay over ten years being, as he puts it, extremely low. The price still moves around. The difference is that the volatility is now being paid for.
So the allocation is being increased slowly rather than switched on. That pacing is the point.
The AI trade keeps moving
One of the more useful observations is that the AI theme has not sat still. For a couple of years it was expressed through the largest US technology names, then through the designers of high-end chips, with Nvidia as the obvious example.
This year it moved again. It turns out those systems also need enormous quantities of ordinary memory chips — old technology, already in your phone and your car — and production is concentrated among a handful of manufacturers, mostly in South Korea and Taiwan. Those were the companies that benefited most.
Meanwhile the same theme turned against established software businesses such as Salesforce and Adobe, as the market asked what their advantage is worth if writing software becomes easier for everyone. Their prices fell sharply, then recovered as opinion shifted again.
Same theme, different winners, twice in two years. Which is a reasonable argument for not building a portfolio around a single expression of it.
What this actually means
Nothing in the conversation is a prediction, and nothing here is a recommendation about any particular investment. The thread running through it is narrower and more durable:
- A position that has done well still has to justify its place.
- An asset that pays you something is doing work that an asset relying on price alone is not.
- If the people paid to forecast rates keep getting it wrong, a portfolio built on a rate forecast is fragile.
- Being paid for volatility is different from simply enduring it.
None of that is exciting, and that is rather the point. The aim is a portfolio that does not depend on anyone guessing correctly.
The full quarterly update is on the Fine Answers Podcast. If you have questions about how your own portfolio is positioned, or whether it still suits your timeframe, get in touch with the team — we would rather answer them than have you wondering.
This blog contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, AMP and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.
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