Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 327

Welcome to Firstlinks Edition 327

  •   9 October 2019
  • 1
  •      
  •   

When you consider all the things people might worry about, the current ABC survey called 'Australia Talks', uncovering our attitudes and experiences, is producing surprising results. Based on 54,000 responses, ahead of health but behind climate change, comes 'Saving enough money for retirement'.


Source: ABC 'Australia talks', October 2019

Retirement saving is double 'Providing for family'. The Government's Retirement Income Review is therefore timely, although as we wrote last week, expectations should be temperedNick Callil describes three ways retirees can spend their super, balancing running out of money ('ruin') with leaving it behind ('wastage').

There's no other country in the world where superannuation influences headlines and politics as much as Australia. Bill Shorten acknowledged last week that what the Liberals dubbed the 'retiree tax' had damaged Labor:

"We misread the mood in terms of the franking credits. What everyone thinks about the system in hindsight - and of course, hindsight is never wrong, is it? - what we saw is that there were a lot of older people who felt vulnerable and it also laid the seedbed for the fake campaign on the death tax."

He should read Firstlinks, because in the seven years of this publication, we have never received so many comments on one subject. Over one thousand. Shadow Treasurer, Jim Chalmers, has already flagged that Labor policies will change before the 2022 election.

In other highlights ...

Elizabeth Bryan and Chris Cuffe are two of Australia's most experienced board chairs and directors. It was fascinating to hear their views on how a good board should function, with tips for aspiring members to transition from executive to board roles. It's not suitable for everyone.

Plenty is being written about bubble asset valuations as investors scramble for returns, and Roger Montgomery gives specific examples of how some investors have lost perspective.

In looking for both yield and lower volatility, Adrian Harrington makes the case for quality property with first-class tenants and long lease (Weighted Average Lease Expiry or WALE) terms, and it's worth understanding more about 'triple net leases'. Similarly, real assets including infrastructure have a role in most portfolios, and Andrew Parsons shows the opportunities.

Adam Grotzinger explains that as opportunities in traditional markets become constrained, a flexible approach to global opportunities can enhance risk-adjusted returns.

We like to think markets are subject to a vast array of forces, but one dominates all others: the actions of central banks. They've fed us on sugar for years, and we all know what happens eventually when we consume too much sugar. Ashley Owen draws the chart and the conclusions. When central bank balance sheets have gone from US$10 trillion to US$22 trillion in a decade, as shown below, do we expect them to continue expanding to feed our endless appetites?




Finally, on the subject of major market trends, this week's Sponsor White Paper is from Martin Currie Australia (an affiliate of Legg Mason), on why the value style of investing will soon have its time in the sun after being in the shade of growth and momentum for many years.

 

Graham Hand, Managing Editor

For a PDF version of this week’s newsletter articles, click here.

 

banner

Most viewed in recent weeks

Maybe it’s time to consider taxing the family home

Australia could unlock smarter investment and greater equity by reforming housing tax concessions. Rethinking exemptions on the family home could benefit most Australians, especially renters and owners of modest homes.

Supercharging the ‘4% rule’ to ensure a richer retirement

The creator of the 4% rule for retirement withdrawals, Bill Bengen, has written a new book outlining fresh strategies to outlive your money, including holding fewer stocks in early retirement before increasing allocations.

Simple maths says the AI investment boom ends badly

This AI cycle feels less like a revolution and more like a rerun. Just like fibre in 2000, shale in 2014, and cannabis in 2019, the technology or product is real but the capital cycle will be brutal. Investors beware.

Why we should follow Canada and cut migration

An explosion in low-skilled migration to Australia has depressed wages, killed productivity, and cut rental vacancy rates to near decades-lows. It’s time both sides of politics addressed the issue.

Are franking credits worth pursuing?

Are franking credits factored into share prices? The data suggests they're probably not, and there are certain types of stocks that offer higher franking credits as well as the prospect for higher returns.

Are LICs licked?

LICs are continuing to struggle with large discounts and frustrated investors are wondering whether it’s worth holding onto them. This explains why the next 6-12 months will be make or break for many LICs.

Latest Updates

A nation of landlords and fund managers

Super and housing dwarf every other asset class in Australia, and they’ve both become too big to fail. Can they continue to grow at current rates, and if so, what are the implications for the economy, work and markets?

Economy

The hidden property empire of Australia’s politicians

With rising home prices and falling affordability, political leaders preach reform. But asset disclosures show many are heavily invested in property - raising doubts about whose interests housing policy really protects.

Retirement

Retiring debt-free may not be the best strategy

Retiring with debt may have advantages. Maintaining a mortgage on the family home can provide a line of credit in retirement for flexibility, extra income, and a DIY reverse mortgage strategy.

Shares

Why the ASX is losing Its best companies

The ASX is shrinking not by accident, but by design. A governance model that rewards detachment over ownership is driving capital into private hands and weakening public markets.

Investment strategies

3 reasons the party in big tech stocks may be over

The AI boom has sparked investor euphoria, but under the surface, US big tech is showing cracks - slowing growth, surging capex, and fading dominance signal it's time to question conventional tech optimism.

Investment strategies

Resilience is the new alpha

Trade is now a strategic weapon, reshaping the investment landscape. In this environment, resilient companies - those capable of absorbing shocks and defending margins - are best positioned to outperform.

Shares

The DNA of long-term compounding machines

The next generation of wealth creation is likely to emerge from founder influenced firms that combine scalable models with long-term alignment. Four signs can alert investors to these companies before the crowds.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.