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Wednesday, 5 August 2020
Recently trending A hard dose reality check on vaccinesAfter 30 years of investing, I prefer to skip this partyHow we have invested during COVID-19Welcome to Firstlinks Edition 367Is the '4% rule' for retirement broken?
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Population decline is a new, yet largely ignored, trend with underrated economic and social costs. Much of the growth that drives economies, especially in Australia, comes from population increases.
Understanding demographics is vital for successful planning and investing for the future. What is happening on population growth, ageing, natural increases, immigration and our role in Asia?
As we approach the 2020s, we are sailing into uncertain waters at best. These times also have some historical precedents, but we need to make important reforms before our luck runs out.
The investment opportunity in listed ‘real assets’ in Australia is almost $250 billion. Offices, roads, warehouses, airports, pipelines and shops are the foundation of economic growth.
Agricultural management and investment has become sophisticated as the world needs more food and fibre, and it not only about the environment but improving the economic returns.
Real assets such as airports will benefit significantly from a massive growth in Asian tourism and a growing middle class, and are less subject to the vagaries of the business cycle.
Economic growth and interest rates affect housing prices, but political decisions around zoning, migration, and taxes are also strong influences. Overall, the current climate suggests a much slower growth in house prices.
Urban growth poses many challenges. The way we live and interact as a society, especially in growing cities, will continue to evolve including the way we shop, how we move around and how land is redeveloped.
The Australian economy faces many challenges from both global and domestic influences, and while opportunities exist for Australian businesses and investors, it's a time for caution.
We don’t know what the world will look like in 2050, but that doesn't mean we shouldn't think about it and plan for different scenarios. Demographic change and growth in emerging markets are major themes.
With 160 programmes underway and billions of dollars spent on COVID-19 vaccines, investors are drawn to optimistic news. However, the company that has developed most new vaccines has a sober view.
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.
With signs that the economic recession will not be as deep as first feared, many companies will emerge strongly with robust business models. Here are the sectors with the best opportunities.
There is a similarity between the current health crisis and economic crises of the past. For COVID-19, record amounts of biotech funding from government agencies and private companies are looking for a vaccine. Likewise, central banks once struggled treating recessions but the 'vaccine' now is record amounts of financial stimulus to ensure liquidity. While the world awaits a COVID treatment, markets are purring along, at least until side effects hit.
The traditional 4% rule was designed to ensure retirees do not run out of money, but low interest rates and expensive equity markets question the sustainability of the level. What are the alternatives?
It’s not only products and business models that create wealth. Management teams make decisions on how to deploy capital and such actions drive vastly different outcomes over time.