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Thursday, 13 August 2020
Recently trending After 30 years of investing, I prefer to skip this partyAustralian house prices: Part 2, the bigger picture How to handle the riskiest company results in historyAustralian house prices: Part 1, how worried should we be?Welcome to Firstlinks Edition 369
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Investing in hedge funds is one of the more polarising topics in the investment world, with strongly-held views at each end of the spectrum. Part 1 of this two-part series looks at the advantages of these 'alternatives'.
The term robo-advice has quickly evolved to cover a broad range of automated advice and investment solutions. But the underlying principle is the use of a formula or set of rules to assist with managing wealth.
Index and asset allocation specialists, Research Affiliates, have tested a theory they call the ‘Rip van Winkle’ approach. It uses a cap-weighted index portfolio drawing the data from 20 years earlier to prove a point.
It is hard to make and sustain good policy if there is confusion about its objectives. And in the case of the retirement income system, there is an unfortunate lack of clearly articulated goals and objectives.
Despite rapid increases in life expectancy at the time of receipt, eligibility for the age pension has remained at 65 for 100 years. It creates a sense of entitlement and discourages people saving for retirement.
As 30th of June approaches, there are many things SMSF trustees should consider to make the most of their superannuation. Better not to leave these items until the last minute.
Eventually, prices become so extreme they bear no relationship to reality, and a bubble forms. I believe we are there today, not for all stocks but for many in the technology space.
There is good reason to believe the negatives will continue to outweigh the positives over the next 12 to 18 months. There is more concern about house prices than the short-term indicators suggest.
It is better to miss a results bounce and buy after the company has delivered than it is to step on a landmine. With such uncertainty, avoid FOMO by following these result season investing tips.
Three key indicators are useful for predicting the short-term outlook for house prices, although tighter lockdowns make the outlook gloomier. There is enough doubt to create cause for concern.
Imagine you had perfect foresight about COVID-19 at the start of the year. You correctly foresaw that the global pandemic would kill over 700,000 among 20 million infections by August. In Australia, borders would close, cities would be locked down, most mortgagors would be on income support and companies would be allowed to trade while insolvent. You then had to guess how much the stock market would fall. Would you say about 10%?
Sometimes the simplest ideas are the best. The founders of Afterpay stumbled on the attraction for consumers of paying by instalments, and now retailers must offer the facility or lose business.