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Friday, 21 January 2022
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There are thousands of different indexes, and they are not all diversified and broadly-based. Watch for concentration risk in sectors and companies, and know the underlying assets in case liquidity is needed.
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It is easy to feel like an investing genius over the last 10 years, with most asset classes making wonderful gains. But if there's a setback, companies like Reece, ARB, Cochlear, REA Group and CSL will recover best.
In the 11th year of a bull market, near the end of the cycle, some type of correction is likely. Underneath is solid, healthy and underpinned by strong earnings growth, but there's less room for mistakes.
In 2021, the gold price failed to sustain its strong rise since 2018, although it recovered after early losses. But where does gold sit in a world of inflation, rising rates and a competitor like Bitcoin?
In a sentence or two, global experts across many fields are asked to summarise the biggest surprise of 2021, and enduring challenges into 2022. It's a short and sweet view of the changes we are all facing.
In 2021, sharemarket gains supported record levels of capital raisings and IPOs in Australia. The range of deals listed here shows the maturity of the local market in providing equity capital.
Governments and investors have been complacent about the build up of debt, but at some level, a ceiling exists. Are we near yet? Trouble is brewing, especially in the eurozone and emerging countries.
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Welcome to Firstlinks Edition 442
One of the benefits of ETFs, besides the low fees for the index options, is the ease of access. Anyone with a broker account needs no fresh paperwork. But there are disadvantages in the ability to sell quickly and cheaply. Our behaviour is guided by what is easy, so we tend to overtrade and our portfolios suffer from not taking a longer-term, more considered perspective. A fraction more friction would help.Read More.
Businesses exploit the psychological processes that people go through when they decide to buy something, but does the US research work when faced with "traditional hard-bitten, no-bullshit Australian scepticism"?
This is our annual checklist of what retirees need to be aware of in 2022. It is a long list of 25 items and not everything will apply to your situation. Run your eye over the benefits and entitlements.
Australians are generally optimistic about retiring comfortably but their confidence lags retirement savers in other countries. They are also the most unsure about future returns and withdrawal rates in retirement.
Depending on personal circumstances, it may be time to rethink the bias to paying down housing debt over wealth accumulation in super. Do the sums and ask these four questions to plan for your future.
As we enter a new year, we dive into the Morningstar database to see which asset classes have performed well over various time periods, with the related risks and largest historical drawdowns.
The Warren Buffett/Charlie Munger partnership is the stuff of legends, but even Charlie admits it is coming to an end ("I'm nearly dead"). He is one of the few people in investing prepared to say what he thinks.
We use weather forecasts to inform our planning but they do not entirely drive decision making. The same should happen with investment outlooks. A globally diversified portfolio will serve best in unpredictable times.
Among the myriad of numbers that bombard us every day, three prices matter greatly to the world economy. Recent changes in these prices help to understand the potential for a global recovery and interest rates.
Regulatory tightening has wiped US$1 trillion off China’s stockmarket over the past year, but this is not representative of the whole private sector. It is catching up with global practices of supervision of tech.
Stagflation occurs when economic growth slows (stagnation) and prices rise (inflation), and while this scenario has been evident for a while now, is it really the same as the last time, over 40 years ago?
The Melbourne Cup day RBA meeting confirms the cessation of the ‘yield control’ strategy that’s been in place since July. What might this signal for interest rates in the near term?
Investment returns have defied initial expectations set in the early stages of the Covid pandemic, but where to from here? Which asset classes offer the best opportunities?
Omicron and central bank policy changes have spoiled Christmas, especially for the value of businesses with the most profit growth far in the future. Has the pullback in parts of the global market been overdone?
Floating rate bonds protect investors from capital losses of long-duration fixed income as rates rise. Hybrid structures offer higher yields backed by strong banks issuing on both the ASX and in unlisted OTC markets.
2021 has been another record year for ETFs in Australia. It has also been an unpredictable one. We expect ETFs to continue to grow in 2022. Here are our top five ideas as we enter the new year.
As business fundamentals improve, the earnings recovery takes over as the primary driver of shareholder returns. The equity market is supported by its real earnings even with the inevitable share price falls.
Equity funds tend to receive most attention, and the media focuses on fund themes and new ideas. Surprising to many, fixed income is typically the quiet achiever in the Australian retail asset management industry.
Smaller companies might require more research than large caps but they are often worth it. All large companies were small once and there can be benefits investing in small companies and backing management early.
Many financial advisers have left the industry because it costs more to produce advice than is charged as an up-front fee. Advisers are valued by those who use them while the unadvised don’t see the need to pay.
The Design and Distribution Obligations (DDO) come into effect in two weeks. They will change the way banks promote products, force some small funds to close to new members and push issues into the listed space.
Do what you want with your estate but there can be challenges in a court. Older people are vulnerable and they can tell people what they want to hear, but carers can also be successful over family beneficiaries.
The Australian Taxation Office has issued a directive about the top five errors in SMSF annual returns. Although many leave these to an administrator, it's worth knowing what's happening behind the scenes.
Seeking financial advice can be a daunting task and over 80% of Australians do not have a financial adviser. Here are the steps involved in understanding the advice process to encourage more people to jump in.
Markets don't seem normal, but Magellan is criticised for its caution. Higher interest rates to control inflation could create a recession and some of today's investing will turn out a mass delusion of modern history.
All fund managers now claim to take ESG factors into account, but a multi-asset ethical fund will look quite different from a mainstream fund. Faced with low fixed income returns, alternatives have a bigger role.
Sir Frank shares his story, including his journey from war-torn Europe, identifying opportunities, key character traits necessary for business success, and the importance of remaining paranoid yet optimistic.
Jacob Mitchell spent 14 years at Platinum before establishing Antipodes in 2015. He discusses trends he is following, his biggest lessons, LICs versus active ETFs and a stock he will hold for at least 10 years.
Is it more difficult to find stocks to short in a rising market? What impact has central bank dominance had over stock selection? How do you combine income and growth in a portfolio? Where are the opportunities?
Financial repression is suddenly part of our lexicon, but what is it and how can a fixed income fund take advantage of it? And why it is better to manage smaller amounts than multi-billion portfolios.
Every person is predisposed towards some combination of gullible and sceptical across many aspects of their lives. We might be sceptical about information we read on social media but gullible in accepting opinions in a favourite newspaper. In investing, one person may think 'it's too good to be true' while another sees a great opportunity.
Welcome to our 10th year of publication as we check our most popular articles of 2021. Much interest in retirement savings, housing policy and investing, and surprising to see social security policy feature strongly. Plus four charts for 2022 and the most-traded ASX stocks of 2021.
For most investors, 2021 will deliver good performance, with the benchmark All Ords Index rising 10% and the best superannuation funds returning about 12%, and that's before we include house prices. If 2022 is worse, that is part of the deal all equity investors must accept. But there was something else weird and crazy about investing in 2021.
Tired of reading about inflation? It seems a dry subject and Firstlinks does not normally spend much time on a macro theme, but this is a fascinating and unique moment. Central banks are changing their policies at a critical time, and inflation, wages, the virus and house prices are all linked. Hamish Douglass gives his unique take.
As we come to the end of another year, predictions for next year will abound, especially as central banks step away from looser policies. Long-term investing should not depend on short-term predictions but draw on Buffett's advice to invest as if allowed only 20 investments in a lifetime. Do you own stocks or funds you expect to retain forever?
Two recent discussions with retirees demonstrated why policy change is difficult, and why meaningful action demands a politician who can tell a convincing story when faced with the inevitable opposition. Can we implement changes which are good for the nation when powerful vested interests have so many public platforms these days? Plus all the stock picks from the Annual Sohn Conference.
A lower starting withdrawal rate doesn’t always mean living on less. The latest research on sustainable withdrawals offers flexibility for retirees to improve the chances of not running out of funds prematurely.
While the competing structure, ETFs, has increased in size far quicker in recent years, LICs remain an important part of the listed trust sector. There are differences between Traditional and Trading LICs.
When it comes to doing your homework on Exchange Traded Funds, understanding index construction is indispensable and the ideal way to find best-of-breed funds for your portfolio.
Two prominent fund managers with strongly opposing views and techniques. Cathie Wood thinks Tesla is going to US$3,000, Rob Arnott says it's already a bubble at US$750. They debate valuing growth and disruption.
Investors with a consistent investment approach which avoids chasing performance should reap rewards over time. A recent US study reveals a persistent gap between reported returns and what investors actually receive.
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.
First Sentier MUFG Sustainable Investment Institute publishes research on microfibre pollution causes, effects and required interventions.
Munro Climate Change Leaders Fund to be accessible on the ASX.
CQE's acquisition of childcare properties & FY22 guidance upgrade.
Purchases and sales of shares in their own company by directors and executives can be a powerful sign of the future potential within a company and should be monitored closely.
General principles previously governed ethical investing, but both fund managers and clients now accept the more hard-nosed approach of eliminating certain companies from portfolios.
Noel responds to Chris doubting it is possible to take the heat out of the market with tax changes, but he’s fine if the 50% CGT discount does not kick in for at least five years.
COVID was a paradigm shift for thematic ETFs, satisfying investor sentiment toward disruptive trends and sustainable investing while covering almost any theme investors desire. Where do they sit in a portfolio?