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Fundamentals

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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.

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.

Beware of burning down the barn to bury the debt

At some point, policymakers will turn to the task of deleveraging, to work off massive debt burdens built up during the pandemic. Australia is already ticking the boxes on many policies used in the past.

Have stock markets become a giant Ponzi scheme?

A global financial casino has been created where investors ignore realistic valuations in the low growth, high-risk environment. At some point, analysis of fundamental value will be rewarded.

How to handle the riskiest company results in history

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.

The three main factors when the next storm hits

Markets always come back to fundamentals, valuations and liquidity, even when faced with a global pandemic. The key question is whether liquidity can hold up the market as the economic storm hits.

We have many world best practice companies

While Australian businesses generally achieve returns below global comparisons, our Best 50 have delivered results well above the accepted world best practice level, and they come from a diversity of industries.

Going global? Don’t break the 'Golden Rule'

In many valuations, the ‘Golden Rule’ is being broken. Earnings growth is assuming the sort of strong economic activity that would trigger higher interest rates, yet investors are delinking the two.

High yields may ignore fundamental weakness

Investors chasing high yielding stocks without considering the fundamentals risk falling into the 'income trap', where weak businesses are eventually forced to reduce their dividends.

Market psychology, emotions and ... more emotions

An investor’s fundamental investment process should be adapted to take account of the psychology and emotion involved in making such decisions, including a disciplined approach to entering and exiting positions.

Most viewed in recent weeks

The risk-return tradeoff: What’s the right asset mix for a 5% return?

Conservative investors are forced to choose between protecting capital and accepting lower income while drawing down capital to maintain living standards or taking additional risk. How can you strike a balance?

How long will my retirement savings last?

Many self-funded retirees will outlive their savings as most men and women now aged 65 will survive at least another 20 years. Compare your spending with how much you earn to see how long your money will last.

Buffett's favourite indicator versus all-in equities

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.

In fact, most people have no super when they die

Contrary to the popular belief supported by the 'fact base' of the Retirement Income Review, four in every five Australians aged 60 and over have no super in the period up to four years before their death.

Five timeless lessons from a life in investing

40 years of investing is distilled into five crucial lessons. An overall theme is to embrace uncertainty to make an impact on how much you earn, how much you spend, how much you save and how much risk you take.

Super changes, the Budget and 2021 versus 2022

Josh Frydenberg's third budget contained changes to superannuation and other rules but their effective date is expected to be 1 July 2022. Take care not to confuse them with changes due on 1 July 2021.

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