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Edition: 392

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Welcome to Firstlinks Edition 392

  • 28 January 2021
  • 6

When we wrote about Robinhood and Reddit investors in June last year, it was not expected that their activities would ramp up to another extreme level. Fuelled by stimulus cheques and social media stories of instant wealth, thousands of new participants are speculating on stocks in a way the market rarely sees.

Unfortunately, all fund manager presentations are good

Part of the fund manager's job is to raise money from investors, and with years of practice, a few good stock stories and an educated guess on the future, it's not hard to present well. That's a problem for investors.

Win some, lose some: Buffett's 2020 scorecard

Warren Buffett's investment portfolio gains attention because of his legendary status, but parts of his empire in insurance, railways, metalworking and aircraft suppliers have been damaged by the pandemic.

Prefer or defer? Sector and investment themes for 2021

It's time for equity prices to more closely tie to a company’s underlying near-term earnings trajectory and financial strength. Despite the market trading at record levels, some stocks have been left behind.

Is cancelling the SG increase a retiree version of ‘Buy now, pay later’?

No doubt, any reduction or deferral in the SG increase would be received favourably by many. However, early access and lower contributions undermine the foundation of our super system.

Three ways to match housing affordability with good returns

This increased focus on affordable housing is welcome but the challenge is that investors typically require ‘market’ rate financial returns. By definition, social housing tenants cannot pay market rent.

Investors face their own Breaking Bad moment

Savers are making small decision after small decision that leads them away from investing and closer to outright speculating. Time will tell if this ends in a bloody climax or we all live happily ever after.

Australian banks prove resilient but risks remain

Australian major banks reported a decline in financial performance in 2020 but as the impact of the pandemic evolves, the banks maintained a strong focus on customers. Is the renewed market optimism justified?

Most viewed in recent weeks

Why have Australian living standards 'fallen' and how do we fix it?

For the last few years there has been much talk of a 'cost-of-living' crisis in Australia and of 'falling living standards'. Lately this has flared up again with the pickup in inflation resulting in a renewed fall in real wages.

Will you run out of money in retirement?

Fear of running out has become a defining retirement anxiety. Why do some retirees die with substantial wealth while others deplete their nest egg? Evidence suggests the answer is more complicated than we think. 

Four options for an income investor’s next dollar

What if Australia’s golden age of dividends is ending? Rather than overhaul your portfolio, it may be worth considering where new capital can work harder. I discuss four income strategies and the trade-offs behind each.

The investment that sidesteps the new tax traps

Tax rules have changed, but many investors are still using yesterday’s strategies. Insurance bonds may offer advantages for those seeking greater control, tax efficiency and certainty about their wealth.

Why spending more in early retirement can improve lifetime income

Conventional wisdom encourages retirees to preserve superannuation. But if those likely to qualify for the Age Pension later in life spend a little more today, it may deliver higher lifetime income and a more stable retirement.

Testamentary trusts have secured the CGT exemption

Treasury’s latest CGT reform draft delivers a win for testamentary trusts and deceased estates, exempting estate-derived gains from the 30% floor. However, questions on death and divorce rollovers remain unresolved.

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