Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Register

30 October 2026

Home / 39

Edition 39

  •   8 November 2013
  •      
  •   

Welcome from Chris Cuffe

The Australian sharemarket presents a dilemma for most investors. Four of the five largest stocks are banks, comprising an amazing 27% of the entire S&P/ASX200 index. Investors want to buy banks for yield, but everyone knows bank prices have already run up strongly. Over half the market's gain in 2013 is due to the banks. Is a correction due? Add in Telstra and BHP and there is 40% of the market in only six stocks, so even an index fund does not have much diversification. Roger Montgomery does not believe we are in bubble territory yet, although he sees early signs of concern and he is not saying prices cannot fall from here.

At the other end of the market, the small stocks, many have also rallied strongly but these companies are less researched and it is still possible to find little-known gems. Chris Stott gives his Top 10 tips for identifying the best small to medium companies.

Ashley Owen takes a look at the characteristics of a country that was once considered an emerging market economy, but is now part of the developed world. It’s worth all investors considering how the world is changing, and whether opportunities are likely to appear in the next block of emerging countries.

Official statistics can be misleading. The current unemployment rate is a low 5.7%, so it must be easy to get a job. Economic growth remains strong, so small businesses must be doing well. Baby boomers are retiring after 20 years of compulsory super, so they’re all self-funded. Rick Cosier meets many clients who have vastly different personal experiences to these perceptions, and an important part of any financial plan is to cover unexpected and unwelcome events.

Last week, we had many readers respond to this article on index versus active investing, and so we reprise the subject with some of their feedback.

Chris

Latest posts from Cuffelinks, 8 Nov 2013, Edition 39

  • Premature talk of bubble trouble Roger Montgomery
  • Top 10 tips to find great small companies Chris Stott
  • Would you invest in this emerging market? Ashley Owen
  • Real client experiences often differ from the headlines Rick Cosier
  • Index versus active – our readers reprise Graham Hand

Download PDF

 

  •   8 November 2013
  •      
  •   

 

Leave a Comment:
Firstlinks is sponsored by:
banner

Most viewed in recent weeks

It’s time for LICs to die

A high-profile dividend cut and a prominent fund manager’s apology have reignited a long-running debate. If investors can access similar exposures more cheaply and efficiently elsewhere, what exactly is keeping LICs alive?

The retirement scorecard: how many of these questions can you answer?

From the maths of retirement, estimating spending and picking the right asset allocation to survive a poor decade, here are the questions every retiree – current or future – should be able to answer for themselves.

Testamentary trusts: Treasury has picked the wrong reading

A decades-old estate planning tool has survived one tax crackdown only to be caught by another. The surprise isn't who the reform is targeting, but who could end up paying the price for drafting choices made years ago.

How the typical Australian Family could save $844,350 in taxes

The value of a testamentary trust is not determined by wealth alone. Depending on circumstances, it can reduce the tax burden on inherited income, create efficiencies and help build intergenerational wealth.

The housing slide could become a crash

House prices are sliding across Australia, yet the most dangerous ingredient for a housing crash is still missing. If job losses surge amid growing economic risks, today's correction could become a historic property downturn.

Will investors be better or worse off under new housing tax changes?

Housing tax reforms have sparked warnings of market turmoil and promises of greater fairness. But after modelling nearly two decades of property data, the results suggest winners and losers may not be who many investors expect.

Latest Updates

SMSF strategies

Division 296: the initial moves to make before the windows close

What if the best superannuation strategy isn't about earning more, but acting before your options disappear? Several overlooked planning windows are narrowing, with consequences that can last for decades.

Planning

Avoid unnecessary CGT with this estate planning clause

A simple estate plan can create a ticking time bomb. One overlooked clause can pit spouses against children, delay inheritances, and potentially leave a family facing an unexpected tax bill worth hundreds of thousands of dollars.

Exchange traded products

The hidden trade-off in fixed income ETFs

Some investment trade-offs are immediately visible. Others are embedded in the way a portfolio is constructed. Understanding the difference may explain why similar-looking investments can produce surprisingly different results.

Retirement

The mortgage free retirement is fading

What happens when a generation reaches retirement carrying obligations previous generations largely avoided? New research suggests we may need to rethink both how much we need in retirement and what life could look like.

Retirement

The key question to inspire a confident and purposeful retirement

Most people spend decades planning for retirement. Far fewer plan for what happens when they get there. The difference may explain why so many find the transition harder and less fulfilling than expected, despite careful preparation.

Latest from Morningstar

Making the case for a 'good enough' portfolio

Some investors spend years chasing the perfect strategy. Others choose a path that’s simply good enough and move on. Which approach is more likely to deliver both better outcomes and a happier financial life over the long run?

Investment strategies

Is the US market as expensive as CAPE says?

Many investing ideas survive for decades. But that does not make them right. A famous valuation measure implies that US shares are dangerously expensive, but the evidence may point to a very different conclusion.

Sponsors

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

Site Map

About Firstlinks

© 2026 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.