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Edition: 444

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Welcome to Firstlinks Edition 444 with weekend update

  • 3 February 2022
  • 4

The German word 'schadenfreude' means the pleasure derived from another person's misfortune. It's my guess that many people feel a level of satisfaction at the angst now experienced by some buyers of hot tech stocks, overhyped IPOs, Bitcoin, stonks and memes that thrived in 2020 and 2021 but are struggling in 2022. We look at risk tolerance and loss aversion.

Market fall reveals your risk tolerance and loss aversion

Risk tolerance is highly personal, and is only truly tested when markets are under stress. Even the popular theory of loss aversion is now challenged, so you need to find the balance between risk and sleep.

Five personal checks on your financial health

While good financial health is desirable, it’s often an imprecise concept. A simple universal framework comprising five indicators with benchmarks enables an objective assessment of personal financial health.

Four good reasons to sell stocks now

The most common advice in a market selloff is to hang on for the long term, but that assumes a well-laid, well-maintained plan. That may not be the case for some investors and selling may be worthwhile.

Happy RBA refuses to blink while market runs ahead

Borrowers can relax for a while longer as Reserve Bank Governor Philip Lowe signals he will wait for firm evidence of inflation and wage rises before raising cash rates, but the market is way ahead of him.

Bank hybrids response to equity market weakness

During the GFC, bank hybrids fell heavily as bank equity sold off, but in the last dozen years, hybrids rules have changed and the market seems to accept hybrids are more resilient. What does the price data show?

How risk is managed in private debt investing

The nature of private debt brings lender and borrower closer together. They develop a close relationship and use frequent reporting arrangements that allow timely responses to any change in circumstances.

Understanding and investing in cryptocurrency

In decentralised currency markets like Bitcoin and Ethereum, the market needs to ensure that everyone agrees on the order of transactions. Cryptocurrency miners help this process and are rewarded with digital coins.

Most viewed in recent weeks

Why it’s time to ditch the retirement journey

Retirement isn’t a clean financial arc. Income shocks, health costs and family pressures hit at random, exposing the limits of age-based planning and the myth of a predictable “retirement journey".

Australia's retirement system works brilliantly for some - but not all

The superannuation system has succeeded brilliantly at what it was designed to do: accumulate wealth during working lives. The next challenge is meeting members’ diverse needs in retirement. 

Australian stocks will crush housing over the next decade, 2025 edition

Two years ago, I wrote an article suggesting that the odds favoured ASX shares easily outperforming residential property over the next decade. Here’s an update on where things stand today.

The 3 biggest residential property myths

I am a professional real estate investor who hears a lot of opinions rather than facts from so-called experts on the topic of property. Here are the largest myths when it comes to Australia’s biggest asset class.

AFIC on the speculative ASX boom, opportunities, and LIC discounts

In an interview with Firstlinks, CEO Mark Freeman discusses how speculative ASX stocks have crushed blue chips this year, companies he likes now, and why he’s confident AFIC’s NTA discount will close.

Where to hide in the ‘everything bubble’

It might not be quite an ‘everything bubble’ but there’s froth in many assets, not just US stocks, right now. It might be time to stress test your portfolio and consider assets that could offer you shelter if trouble is coming.

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