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Wednesday, 29 January 2020
Recently trending 20 great ways the government helps retireesSweet spot helping bull market rampageThe demographics of a growing (and ageing) AustraliaSpending phase calls for retiree risk rethinkDespite strong 2019, institutions wary of GFC coming
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Understanding demographics is vital for successful planning and investing for the future. What is happening on population growth, ageing, natural increases, immigration and our role in Asia?
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As the newly-inked initial trade deal between the US and China appears set to roll back some tariffs, we look at how these China-exposed Australian companies have fared recently.
The returns from Australian shares come from four main components. Any forecast needs to consider these different parts, as Australian shares were recent laggards in diversified portfolios.
While charitable donations and government assistance is swinging into action, it will fall short of meeting all needs. Many people will look for early access to their super nestegg to meet expenses.
Advisers accepting selling fees to push LICs and LITs (and hybrids) has become an industry flashpoint. The heated debate is overlooking crucial points which must be addressed in any final resolution.
The right kind of equity exposure in retirement should come with downside protection and upside capture that enables sufficient participation in market strength. Decumulation investing is different.
Algorithms and AI are increasingly entering our lives, with the belief they make impartial judgements. But it's a myth that they are unbiased, efficient and better decision-makers than humans.
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Welcome to Firstlinks Edition 341
The majority of investors hold a diversified portfolio no more than half invested in equities. The share exposure often declines with age as retirees seek capital preservation, and even young people place their super in balanced funds. Delight in the noisy 'all-time highs' is far from universal, with millions of Australians missing the big gains.Read More.
This list could save a retiree thousands of dollars and provides ideas for a better lifestyle. It's surprising what you might be entitled to, but it's often hard to track down the benefits.
After a big rally in 2019, institutions are far more pessimistic about 2020, and 83% expect a GFC-type event within the next five years. They see a strong role for active investing to reduce the downside.
Hybrids are riskier than term deposits but investors are rewarded for the risk. Here is a simple way to consider if the reward is sufficient as the hybrid approaches an expected call date.
It's the underlying nutrients in the foods we eat which determine if we have a healthy diet. Similarly, the underlying factors that affect our assets determine if we have a healthy portfolio.
Make sure you're not focussing on minor investment problems while giving short shrift to the game-changers. This pyramid describes the important decisions and it might surprise what comes last.
Firstlinks publishes hundreds of articles a year, and Chris Cuffe has selected from the most popular, especially those shining a light on issues the wealth industry must face up to in future.
As we approach the 2020s, we are sailing into uncertain waters at best. These times also have some historical precedents, but we need to make important reforms before our luck runs out.
Prolonging a recovery with stimulus could lead to a worse slump later. Even today, policymakers are haunted by actions taken in 1937 which led to a loss of production and jobs and a falling GDP.
Global trends will create opportunities in Asia, including dealing with some of the world's youngest and oldest populations. Australia's Free Trade Agreement with ASEAN this week a valuable step.
Global central banks are delivering a sugar hit that markets are relying on, but it is unsustainable. Interest rates cannot continue to be cut into negative territory forever.
A close inspection of Reserve Bank Board minutes, the implications of US Fed moves, the way unemployment is measured and how monetary policy is set add up to a picture of further rate cuts.
Central bank independence was an appropriate solution when inflation was a threat. In today’s low-inflation, low-growth and high-debt world, even central banks doubt their level of influence.
Internal emails from the regulator released under an FOI request reveal warnings about advice conflict when selling fees are paid on LICs. Investors need to understand the consequences of the debate.
How can an adviser who is receiving a significant fee for selling a product be in a position to offer good, impartial advice to their client? They can’t, and the industry will slowly accept this.
Looking back over the last decade shows the factors which have driven success for some companies and failure for others, driven by falling interest rates, a lower Aussie dollar and technology changes.
The Treasurer has announced a public consultation into whether advisers can accept selling fees on LITs and LICs to address potential conflicts and compliance with best interests duties.
Property funds are finding new assets in companies making better capital management decisions by selling their properties and leasing them back. It also gives investors strong long-term returns.
Fixed interest LITs domniated the traditional equity LICs in 2019, and while bond issuers enjoyed unprecedented demand, many equity LICs struggled with large discounts to asset value.
Investors overlook that they are charged more as the market rises. Far more financial services should cost a flat fee, with portfolios dominated by index exposure backed by a few active managers.
Australia relies heavily on insurance for recovery from disasters, but underinsurance due to underestimating expenses is common. Read this and check your policy as costs blow out in a crisis.
Two different articles cover a recent report on the attitudes of Australians towards retirement. What should be a enjoyable life stage is feared by many, and they fail to plan and work towards it.
APRA is pushing for executive remuneration to move to non-financial metrics, which will lead to poor outcomes for all stakeholders. Investors should resist and vote against such measures at AGMs.
The value of financial advice is increasingly questioned after the Royal Commission and changes to advice business models, but the case for financial advice for many people remains strong.
Even if you are in a wonderful relationship now, you should not assume you will never be in a blended family. We all need to plan accordingly by avoiding common mistakes in wealth planning.
A global portfolio of infrastructure assets allows trends in one part of the world to be recognised early in another, while companies with pricing power and high barriers to entry enjoy extra resilience.
1997 Nobel Laureate Robert Merton wants greater focus on the income that will sustain a retirement, and even Jane Austen understood this. And he has a surprising proposal to help with longevity risk.
After 35 years in fiduciary and leadership roles, the President of MFS Investment Management is clear about the major problem in wealth management: we have not convinced investors to think long term.
Two of Australia's most experienced and successful chairs explain what makes a good board, what to watch for in bad ones, with advice for aspiring board members: understand first what motivates you.
In the month when index US equity funds exceeded active funds for the first time in history, a look at the company which started it in 1975, with insider views on mass market financial advice.
Marketplace or P2P lending has come a long way in Australia in the last five years. Most investors will be surprised by the type of borrowers and purposes of the loans, and how they are priced.
Companies hit by technology disruptions from competitors often face tough decisions to hang on to customers. It's why many investment analysts require strong 'economic moats' in the best companies as evidence of resistance to competition.
In this new decade, Australia is expected to add another four million to its population, as it did in the previous decade. We have the fastest-growing population in the developed world (1.5% in the year to June 2019), which is one reason for nearly 30 years of economic growth. More people means more stuff. It's driven by net overseas migration of about 250,000 a year, and when most live in Sydney and Melbourne, the prosperity comes at a cost in transport, crowding and property prices.
We start the new year with some previous highlights. Chris Cuffe has selected his favourite articles from 2019, and our free ebook collates 30 of my interviews with leading global and local financial markets experts. Plus a summer reading list, reviews of 2019 and previews of 2020.
If there were ever a time to offer a 20/20 vision about the future course of markets, a few days out from 2020 would be it. While we are happy to publish the views of others, here at Firstlinks, we don't profess to have a crystal ball. When major geopolitical risks rest in the hands of Donald Trump, Boris Johnson, Kim Jong-un and Xi Jinping, with the potential of a midnight tweet to cause a market meltdown, predictions are fraught. It's better to set up a portfolio according to your goals and risk appetite, and stick to a long-term plan.
The irony of the focus on longevity and the retiree fear of money running out is that most people leave more assets to their estate than they held when they entered retirement. If it's possible to look from beyond the grave, it must be frustrating to have worked hard and saved, then lived a frugal retirement, only to see the following generations fritter the money away.
I doubt the Reserve Bank Governor, Philip Lowe, is looking for a new home at the moment. If he were, he would know first-hand that Sydney residential is red hot, and it might make him think again about cutting rates. For the first time in 30 years, I am looking for a new home, and it's clear that FOMO has replaced the FONGO (Fear of Not Getting Out) in the space of a few months. It's a market where selling before you buy can quickly become expensive.
When Barack Obama puts out a reading list with 19 of his favourites from 2019, it makes us realise we should spend more time reading books. Plus Morningstar's experts recall 2019 and preview 2020.
State Street Global Advisors is a pioneer in the Australian ETF market, but aggressive pricing from new rivals has eroded its competitive edge.
We should be grateful for our mandatory and 'auto enrolment' super system as the most powerful tool for increasing savings. Without one, the US has a severe retirement crisis approaching.
CBA's latest PERLS offer is directly offered to hundreds of thousands of investors who already hold CBA shares or other PERLS securities. How does it compare with the rest of the hybrid market?
The quality of the content and editorial attracted us to Cuffelinks and now Firstlinks. Personally, I am an avid reader of the weekly newsletter, as an industry professional and as an investor.
Chris has many years of experience in building successful wealth management practices.
Noel Whittaker is one of the world's foremost authorities on personal finance.
Phil Ruthven is the founder and director of IBISWorld, Australia's best-known business information, forecasting and strategic services corporation
Paul John Keating is a former Australian politician who served as the 24th Prime Minister of Australia, in office from 1991 to 1996 as leader of the Labor Party.
Global Corporate Income Trust Entitlement and Shortfall Offer.
appoints new fund managers to flagship diversified property fund.
Pro bono assistance for SMSF trustees affected by bushfires.
When more than half of retired Australians restrict their spending to less than the age pension and fear running out of money more than death itself, they may be denying a better lifestyle for themselves.
Despite advances in technology in many parts of asset management, that most fundamental step - the application process - often bewilders investors. Time for the industry to step up and coordinate a solution.
Business has always faced changes, but the rapid extent of technical progress means many companies will cease to exist over the next 20 years, including some famous global brands.
Increasing longevity is good news, but it poses difficulties as society and our retirement system adjust, particularly for those who outlive their money and have to rely on the uncertain future of the age pension.