Register to receive our free weekly newsletter including editorials.
Tuesday, 7 April 2020
Recently trending Why we’re not buying the market yetHow $200 billion is magically createdHoward Marks on 'Which way now?'Drawdown reductions needed for retirees - UPDATED POLICYWhat are the possible economic effects of COVID-19 on the world economy?
Rob Henshaw: "When I open my computer each day it's the first link I click - a really great read."
David Goldschmidt, Chartered Accountant: "I find this a really excellent newsletter. The best I get. Keep up the good work!"
Reader: "Great resource. Cuffelinks is STILL the one and only weekly newsletter I regularly read."
Vishal Teckchandani, Content Editor, nabtrade: "Exceptional investment literature of the highest possible quality."
Ian Kelly, CFP, BTACS Financial Services: "Probably the best source of commentary and information I have seen over the past 20 years."
Reader: "Best innovation I have seen whilst an investor for 25 years. The writers are brilliant. A great publication which I look forward to."
Reader: "Love it, just keep doing what you are doing. It is the right length too, any longer and it might become a bit overwhelming."
Reader: "I can quickly sort the items that I am interested in, then research them more fully. It is also a regular reminder that I need to do this."
Eleanor Dartnall, AFA Adviser of the Year, 2014: "Our clients love your newsletter. Your articles are avidly read by advisers and they learn a great deal."
Reader: "The BEST in the game because of diversity and not aligned to financial products. Stands above all the noise."
Noel Whittaker, author and financial adviser: "A fabulous weekly newsletter that is packed full of independent financial advice."
Andrew Buchan, Partner, HLB Mann Judd: "I have told you a thousand times it's the best newsletter."
Don Stammer, leading Australian economist: "Congratulations to all associated. It deserves the good following it has."
Reader: "I subscribe to two newsletters. This is my first read of the week. Thank you. Excellent and please keep up the good work!"
Reader: "An island of professionalism in an ocean of shallow self-interest. Well done!"
Reader: "It's excellent so please don't pollute the content with boring mainstream financial 'waffle' and adverts for stuff we don't want!"
Scott Pape, author of The Barefoot Investor: "I'm an avid reader of Cuffelinks. Thanks for the wonderful resource you have here, it really is first class."
Australian Investors Association: "Australia's foremost independent financial newsletter for professionals and self-directed investors."
Steve: "The best that comes into our world each week. This is the only one that is never, ever canned before fully being reviewed by yours truly."
Reader: "Carry on as you are - well done. The average investor/SMSF trustee needs all the help they can get."
Reader: "Keep it up - the independence is refreshing and is demonstrated by the variety of well credentialed commentators."
John Egan, Egan Associates: "My heartiest congratulations. Your panel of contributors is very impressive and keep your readers fully informed."
Jonathan Hoyle, CEO, Stanford Brown: "A fabulous publication. The only must-read weekly publication for the Australian wealth management industry."
Reader: " Finding a truly independent and interesting read has been magical for me. Please keep it up and don't change!"
Reader: "Congratulations on a great focussed news source. Australia has a dearth of good quality unbiased financial and wealth management news."
John Pearce, Chief Investment Officer, Unisuper: "Out of the (many many) investmentrelated emails I get, Cuffelinks is one that I always open."
Ian Silk, CEO, AustralianSuper: "It has become part of my required reading: quality thinking, and (mercifully) to the point."
Reader: "Is one of very few places an investor can go and not have product rammed down their throat. Love your work!"
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.
With US interest rates on the rise and the prospect of Australian rates heading the same way, floating rate bonds have increased in popularity as they allow investors to benefit from increasing rates.
It took Wall Street and equity investors a long time to realise interest rates had gone through an inflection, and the era of the easiest money conditions in a lifetime is now over.
Australian banks are vulnerable to a collapse in the local housing market due to an overexposure to high-rise developments, interest-only loans and high loan-to-value ratios. The main uncertainty is the timing.
Australian bank liquidity regulations are continuing to tighten, adversely affecting access to cash and the ability of SMSFs to earn the same returns from bank deposits as individuals.
In a recent speech, US Federal Reserve Chair, Janet Yellen signalled that 'unconventional' monetary policy actions by central banks are likely to be 'normal' for many years.
Following the recent cash rate cut, it seemed unusual for banks to then increase their term deposit rates, while only passing on a fraction of the cut to borrowers. What's behind this change in bank strategy?
The RBA follows a fairly standard formula when drafting its interest rate announcements each month and a keen observer might detect a change in view before an actual change in interest rates.
The US Fed has finally lifted interest rates as anticipated, but from here it's especially difficult to predict future rate changes given that current economic conditions would normally dictate lowering rates.
The market has been supplying investors with high dividend-paying stocks, but unfortunately, this focus overlooks better opportunities with more growth and capital appreciation.
Smaller financial institutions have become more competitive in the home loan market, and as they seek new funding sources, the market is doubting the value of the traditional prime bank BBSW benchmark.
The Australian market bounced back last Friday (13th) and Monday (16th) tempting analysts to call the bottom of the coronavirus scare. This is too early as the impact on companies is not yet evident.
Australia is in a relatively good position to borrow $200 billion, with the RBA using printed money to buy bonds in the market. The long-term consequences are better than the alternative.
Howard Marks is the largest investor in the world in distressed securities. What does he think after checking the virus positives and negatives, and how much has he changed his mind in only a few days?
During the GFC, in the face of rapid falls in super balances, the minimum drawdowns required for pensions were reduced by 50% to help preserve overall retirement savings. It's time for a repeat.
In a widely-quoted scenario using estimated attack and fatality rates of coronavirus, about 0.07% of the population of the US dies. That's about 230,000 people, which the market is not ready for.
Andrew Baker is well-known as a superannuation consultant. Now working in the UK, he was caught in France with his family and is in lockdown. He worries Australian policy was too slow.