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Tuesday, 25 January 2022
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The focus is on Magellan for its investment performance and departure of the CEO, but Douglass says the pandemic, inflation, rising rates and Middle East tensions have not played out. Vindication is always long term.
When it comes to doing your homework on Exchange Traded Funds, understanding index construction is indispensable and the ideal way to find best-of-breed funds for your portfolio.
Rather than compare results against APRA's benchmark, large super funds which failed the YFYS performance test are using another measure such as a CPI+ target, with more favourable results to show their members.
Investors with a consistent investment approach which avoids chasing performance should reap rewards over time. A recent US study reveals a persistent gap between reported returns and what investors actually receive.
The YFYS annual performance test neither measures the return members achieve, nor adequately measures the risks a fund took in achieving the returns, yet it is likely to change the way funds behave.
Even the best long-term performing fund managers have shorter-term periods of underperformance. It’s not a failure, it’s a feature of the industry. Investors need patience when backing a good track record.
Peter Thornhill shows how his personal portfolio has thrived under an 'all-in equities' strategy, but Warren Buffett's favourite valuation indicator says stock markets are priced at their most extreme ever.
Fund performance varies over time. A fund may have strong capability and perform well over time, but it may fail the performance test at some point. The YFYS reforms create unwelcome and unintended consequences.
What do hot cross buns and funds have in common? In both, there is no answer to which is the best, as their characteristics appeal to different people. Select the ones that suit your taste and appetite, maybe with added spice.
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.
The Government's performance test in the 'Your Future, Your Super' proposals is likely to prove ineffective and generate undesirable outcomes. It will distort how funds are managed and confuse members.
The APRA MySuper heatmap uses a consistent methodology, and some funds come out badly. How will members and trustees react, and should APRA have sorted out the problems privately?
Most people entering retirement do not see a financial adviser, mainly due to cost. It's a major problem because there are small mistakes a retiree can make which are expensive and avoidable if a few tips were known.
Eligibility for the Commonwealth Seniors Health Card has no asset test and a relatively high income test. It's worth checking eligibility and the benefits of qualifying to save on the cost of medications.
This is our annual checklist of what retirees need to be aware of in 2022. It is a long list of 25 items and not everything will apply to your situation. Run your eye over the benefits and entitlements.
The Warren Buffett/Charlie Munger partnership is the stuff of legends, but even Charlie admits it is coming to an end ("I'm nearly dead"). He is one of the few people in investing prepared to say what he thinks.
Depending on personal circumstances, it may be time to rethink the bias to paying down housing debt over wealth accumulation in super. Do the sums and ask these four questions to plan for your future.