Wednesday, 18 September 2019
Recently trending Most investors are wrong on dividend yield as incomeMy 10 biggest investment management lessonsLessons from the Future Fund for retail investorsFour companies riding the healthcare boomFive reasons SMSFs are making asset allocation changes
The current yield on a share or trust is simply the latest dividend divided by the current share price, an abstract number at a point in time. What really matters is the income delivered in the long run.
There are strong demographic trends in ageing and consumer spending and investing in the right healthcare companies can ride this wave as well as produce better health outcomes for people.
Investing in equities for their dividends and income is not as easy as it sounds. High dividend stocks are more volatile and the dividend is not a sign of quality or value. Take care chasing yield.
Profits results in August 2019 were overall poor, and other factors are in play that influence share prices. It is difficult to jump aboard a profit announcement and make money in the short term.
This week, Treasurer Josh Frydenberg told Australia companies to invest in growth rather than return capital or buy back their own shares. There are other reasons to check the merit of buy backs.
Look for a company whose prices are rising faster than inflation without customer churn, while leveraging its existing strong relationships to cross sell or up sell or some mix of both.
In some parts of the market, the case for active management over passive is strong. The less-researched small companies space shows a focus on strong capital, proven management and a clear strategy pays off.
While Australian businesses generally achieve returns below global comparisons, our Best 50 have delivered results well above the accepted world best practice level, and they come from a diversity of industries.
Investors underestimate the power of network effects, which increase the lifetime value of users and deliver high incremental margins with fixed operating costs. It's worth trawling the market for strong network effects.
Stock buybacks improve earnings per share, making it look like better company performance. In the US, if buybacks stop for any reason, both management and investors alike will have to shift earnings per share expectations downwards.
Frustratingly for investors in micro-caps, the larger companies which now include the WAAAX market darlings are running quickly ahead of their smaller cousins. It's a waiting game for the tide to turn.
Let's set this straight for the final time! Chris Bowen often used the example of a nurse on $67,000 who was at a significant disadvantage versus a retiree receiving franking. In fact, the outcome for both is almost the same.
A Chris Cuffe classic article that never ages. Every experienced investor develops a set of beliefs about how markets operate.
The Annual Report from Australia's sovereign wealth fund reveals new ways it is investing in fixed income and alternatives. The Fund considers its portfolio as one overall risk position with downside protection in one asset class allowing more risk in another.
Substantial changes are underway in SMSFs which until recently held a narrow range of assets dominated by cash, term deposits and Australian equities. Trustees have never faced so many choices.
Changes implemented by super reforms since 1 July 2017 have brought greater incentives for spouses to equalise their superannuation balances, including tax and estate planning benefits.
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