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Wednesday, 29 September 2021
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Dividend payments from listed companies, depended on by many in retirement, have lagged the rebound in share prices over the past year. Better times are ahead but sources of dividends will differ from previous years.
Lower bond yields have been used to justify higher share market valuations for much of the last decade. Now bond rates are rising and there is an inflation threat, what determines whether equities will be hit?
Only six months ago, the Reserve Bank was modelling the impact on banks if house prices fell 40%. It was called 'extreme by plausible'. Most economists expected a fall of at least 10%, yet here we are with record prices.
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.
As fewer professionals actively research the merits of a company’s prospects, stocks become disproportionately driven by capital flows. Prices disconnect from fundamentals and there's no better example than Tesla.
While valuations for large tech stocks are now high, investors don’t need to pay big prices on stocks with technolgy advantages if they are prepared to dig a little deeper. Here are three worth checking.
Everything is rising in value because there is excess capital chasing too few opportunities. Capital should be allocated more responsibly with a focus on the future cash flow from a company.
Checking global stocks with higher prices than the FANGAM stocks but weaker margins and growth identified almost 100 companies. Astonishingly, the ‘Heady Hundred’ are valued at over US$3 trillion.
Afterpay listed at $1 in 2016 and traded recently at $70. How should an investor treat a small holding in a 70-bagger when each new level defies the experts? Should true believers let the profits run?
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.
The ratio of the S&P500 to the gold price is a useful indicator of the mood of the market. A high ratio indicates that equities are expensive relative to gold, and the ratio has been falling recently.
Quantitative investing has its share of critics who denounce the investment approach as a black box exercise. But this active investing style is directly supported by analysis of the numbers.
The RBA Governor says rising house prices are due to "the design of our taxation and social security systems". The OECD says "the prolonged boom in house prices has inflated the wealth of many pensioners without impacting their pension eligibility." What's your view?
It's a remarkable statistic. In any year since 1875, if you had invested in the Australian stock index, turned away and come back eight years later, your average return would be 120% with no negative periods.
Never stand between Australian households and an uncapped government programme with $3 billion in ‘free money’ to build or renovate their homes. But excess supply is coming with an absence of net migration.
Picking macro trends is difficult. What may seem logical and compelling one minute may completely change a few months later. There are better rewards from focussing on identifying the best companies at good prices.
The survey drew a fantastic 2,000 responses with over 1,000 comments and polar opposite views on what is good policy. Do most people believe the home should be in the age pension asset test, and what do they say?
Critics of franking credits are missing the main point. The taxable income of shareholders/taxpayers must also include the company tax previously paid to the ATO before the dividend was distributed. It is fair.