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Welcome to Firstlinks Edition 545 with weekend update

  •   1 February 2024
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The Weekend Edition includes a market update plus Morningstar adds links to two additional articles.

Lately, I’ve been reading a book by Robert Fulghum called, All I really need to know I learned in kindergarten. The book became a bestseller in the 1980s for its quirky short stories on the meaning of life.

In one story that became a cult hit, Fulghum realises that he already knows what’s necessary to live a meaningful life – and he’s known for long time. He learned it in kindergarten.

These are the things he learned:

Share everything.
Play fair.
Don’t hit people.
Put things back where you found them.
Clean up your own mess.
Don’t take things that aren’t yours.
Say you’re sorry when you hurt somebody.
Wash your hands before you eat.
Flush.
Live a balanced life – learn some and think some and draw and paint and sing and dance and play and work every day some.
Take a nap every afternoon.
When you go out into the world, watch out for traffic, hold hands, and stick together.
Be aware of wonder. Remember the little seed in the Styrofoam cup: the roots go down and the plant goes up and nobody really knows how or why, but we are all like that.
Goldfish and hamsters and white mice and even the little seed in the Styrofoam cup – they all die. So do we.
And then remember the Dick-and-Jane books and the first word you learned – the biggest word of all – LOOK.

Yes, the lessons are corny. Yet they include essentials like the Golden Rule, love, politics, the environment, and basic sanitation. As Fulghum notes:

“Take any one of those items and extrapolate it into sophisticated adult terms and apply it to your family life or your work or your government or your world and it holds true and clear and firm. Think what a better world it would be if we all – the whole world – had cookies and milk about three o’clock every afternoon and then lay down with a our blankies for a nap. Or if all the governments had as a basic policy to always put things back where they found them and to clean up their own mess.

And it is still true, no matter how old you are – when you go out into the world, it is best to hold hands and stick together.”

The purpose of schools

Fulghum’s stories got me thinking about what our kindergartens and schools teach and don’t teach. Teaching values is central to what they do. As is teaching reading, writing, and understanding numbers. These skills provide the building blocks for understanding the world, and eventually helping kids find work that provides an income for them.

Practical skills aren’t on school curriculums as much nowadays. I’m thinking of cooking, cleaning, maintenance (of gardens, for instance), making and fixing things, as well as money and investing. All these skills are essential for kids as they turn into teenagers and then young adults. The question is: why aren’t these skills taught in schools?

I have friends and family who are teachers, and I can already see them metaphorically grabbing hold of me and giving me an earful. They would probably say a few things (a few too many, perhaps):

  1. They can’t teach everything.
  2. They already have enough on their plate.
  3. Some practical subjects are taught in schools, such as technology, economics, and science.
  4. It’s the parents’ job to teach practical skills to their children.

The last point is important. Parents have a big say on their child’s development. On their values, and their education. Scientific studies suggest that children with parents who are more involved in their education get better results and better jobs. And parents can teach practical skills to their children too.

But what if parents aren’t equipped to teach their kids about money and investing, for instance? What happens then?

In my case, I learned maths and accounting at school. The latter acquainted me with the language of business and investing but didn’t provide me with tools to use in the real world.

My guess is that most kids are like me when they leave high school - they don’t know enough about the basics of money and investing.

Changing the status quo

Obviously, changing school curriculums to include things like investing is a huge ask. Any effort would need significant funding and commitment. It would also need the support of governments, schools, and businesses.

What can be done?

In the case of money and investing, here is what I would love to be made compulsory in all schools across Australia:

  • In year one, there’s a program to learn about the basics of money and saving. CBA ran the Dollarmites program in schools for 90 years until 2022, when it was closed after complaints that it was using the program to promote the bank rather than for financial literacy. Why can’t governments demand that all the major banks sponsor and co-run a similar program? Perhaps making it part of the obligations of their banking licenses?
  • In year five, a similar program reiterating earlier lessons and updating them for ‘tweens’ who are developing their own spending and savings goals.
  • In year seven, get experts in passive exchange traded funds and listed investment companies to talk about the basics of investing and investing in the whole stock market. And practical tools to implement this ie. getting parents to sign children up as minors on share trading accounts.
  • In year eight, get leaders of large businesses to come in and talk about the nuts and bolts of how their companies make money. For instance, get the students into a local Bunnings store and get the store manager to talk through the nuts and bolts of the business. How it makes money, costs, labor issues, etc. Get the students to do assignments on the pluses and minuses of these businesses.
  • In year nine, bring fund managers in to speak to their businesses and how they invest. Make it practical by perhaps visiting the sites of some of their investments and going to an investor presentation or AGM.
  • In year ten, get superannuation funds experts in to go through the basics of the super system. The different funds, options, and costs. And go through practical examples on each.

Is a broad-ranging program like this unrealistic? Perhaps. It would require federal and state governments, major businesses, super funds, and investors to come together to make it work. It would need money and leaders willing to give time to the effort. It would need checks and balances to make sure that businesses don’t use it as a marketing opportunity.

But surely we can do better to help younger people navigate the world of money and finance?

James Gruber

In this week's edition...

It's great to have Peter Thornhill back. Peter is well-known to our readers as an independent author and speaker advocating a multi-decade investment strategy of holding industrial companies for income. Today, he updates us on the long-term returns from industrial shares versus the index. He also adds comparisons with listed property, resource stocks, and term deposits. Peter explains why his strategy has stood the test of time, and should continue to do well.

Consumer price index figures out this week show a welcome fall in the annual rate. Yet, does this index accurately reflect the actual cost of living? Peter Martin suggests that it clearly doesn't, and he has proof. He says the ABS publishes other estimates that provide a much clearer picture of living expenses, especially how they've risen of late.

Here's a fascinating datapoint for you: the average age of UniSuper members rolling out to an SMSF is 50, while the average age of members who roll money in from an SMSF is age 62. UniSuper's Derek Gascoigne explores this and other SMSF trends, as well as the pluses and minuses of administering your own super fund.

Are ASX small cap stocks set to play catchup and outperform their larger peers this year? Many people think so, though Katana's Romano Sala Tenna isn't sure. If it's right, he thinks there are four small caps worth considering for your portfolio.

One of the hottest plays in residential real estate investment is the land lease community. Currently, this model of ownership houses 130,000 Australians and there are many more projects in the pipeline. Cameron Murray does a deep dive into the business model and whether it works for both residents and landlords.

Thanks to the 'Magnificent Seven' tech stocks, global passive investors thrashed most active peers in 2023. But Orbis' Eric Marais says these investors shouldn't celebrate too soon because their portfolios are now concentrated in the most overvalued segment of the market, making them especially vulnerable if these stocks take a tumble. Meanwhile, Raheel Siddiqui of Neuberger Berman sees challenges ahead for the Magnificent Seven from stretched valuations, inherent cyclicality, and high correlations between the stocks.

Two extra articles from Morningstar for the weekend. Shaun Ler analyses Pinnacle's earnings and says they've proven reslient in a difficult market, while Roy van Keulen suggests Megaport's shares still have upside after its shares surged on a sales update. 

In this week's whitepaper, VanEck provides its latest asset allocation outlook.

Finally, we'd like to give a shoutout to a new website on listed investment companies (LICs) created by Firstlinks' subscriber, John Fox. After retiring, John studied up on LICs, and recently open-sourced the findings. You can now find his latest research on the Firstlinks website. We've found it helpful and we hope you do too.

***

Weekend market update

On Friday in the US, a much stronger-than expected January payrolls report helped push 2- and 30-year Treasury yields higher by 16 and 12 basis points, respectively, to 4.36% and 4.22%. Stocks spiked to the tune of 1.1% on the S&P 500 and 1.7% on the Nasdaq 100,  WTI crude tumbled to US$72 a barrel and gold slipped to US$2,037 per ounce. The VIX held just below 14. 

From AAP Netdesk:

On Friday in Australia, the local share market rebounded from Thursday's sell-off and rocketed to a fresh all-time high after a trio of leading US tech firms soundly beat earnings expectations. The benchmark S&P/ASX200 index closed near the highs of the day Friday, up 111.2 points, or 1.47%, to 7,699.4, while the broader All Ordinaries gained 112.8 points, or 1.44%, to 7,931.6. For the week, the index climbed 1.9%, its second straight week of gains.

The tech sector was the ASX's second-best performing sector on Friday, rising 3.1% as Wisetech Global added 3.5% and Altium gained 4.5%.

The interest-rate-sensitive property sector was the best performer, climbing 3.4% as Goodman Group surged 6.2% to a 16-year high of $26.98 and Westfield owner Scentre Group climbed 2.7% to $3.10.

In the energy sector, uranium developers were setting all-time highs as the after the world's biggest uranium miner, Kazakhstan's Kazatomprom, warned that limited supplies of sulphuric acid would cause it to downgrade production targets. Deep Yellow surged 12.8% to $1.68, Boss Energy rose 8% to $6.11, Paladin Energy advanced 6.6% to $1.375 and Bannerman Energy finished up 5.1% to $3.68.

In the heavyweight mining sector, goldminers were also doing well as the yellow metal traded near a two-week high. Northern Star added 4.1% and Newmont rose 2.7%.

Elsewhere in the sector, BHP added 1.1% to $47.61 and Fortescue rose 0.8% to $29.73, while Rio Tinto dipped 0.2% to $132.

All of the Big Four banks finished higher, with CBA up 1.5% to $115.81, ANZ adding 1.3% to $27.26, Westpac rising 1.2% to $24.05 and NAB climbing 1.1% to $32.25.

Gaming companies had a decent session, a day after New Zealand's SkyCity said it had agreed with the financial crimes watchdog on a penalty to settle allegations of money-laundering violations at its Adelaide casino. Skycity added 7.2% to a five-month high of $2.01, The Star rose 5.5% to a a three-month high of 57.5c and The Lottery Corp advanced 1.8% to $5.11, also a five-month high, amid excitement over the record $200 million Powerball draw.

From Shane Oliver, AMP:

  • Fed not rushing to cut just yet, but still heading in that direction. Sure, Fed Chair Powell pushed back against market expectations for the start of rate cuts in March by saying it was unlikely as the Fed will want to gain further “confidence that inflation is moving sustainably towards 2%.” But that was hardly surprising as the March meeting is just six weeks away. More importantly though, the Fed dropped its reference to further tightening and is now seeing the risks as better balanced and Powell continued to flag rate cuts this year and indicated it will be data dependent. Despite a strong rise in US payrolls in January (which looks partly seasonal) we continue to see the Fed cutting rates 5 times this year starting in May, but a start in March is still possible.
  • Eurozone inflation fell to 2.8% in January with core inflation falling to 3.3%yoy, with ECB officials’ comments leaning a bit more dovish. The ECB is likely to start cutting in April.
  • Australian inflation is falling faster than the RBA expected. While hot spots remain (like insurance and rent) inflation fell to 4.1%yoy in the December quarter which is well below the RBA’s forecast for 4.5%, and down from 5.4% in the September quarter and a peak of 7.8% a year ago. Underlying inflation measures also fell with the trimmed mean at 4.2%yoy (below the RBA’s forecast for 4.5%) and services price inflation is now also following goods price inflation down. What’s more the proportion of items seeing greater than 3% inflation has fallen sharply to 43% which is consistent with the pre-pandemic norm and monthly CPI inflation fell to 3.4%yoy in December.
  • The faster fall in inflation than the RBA was expecting along with soft data for retail sales and jobs since their last meeting along with major global central banks slowly turning more dovish is consistent with our view that the cash rate has peaked and by mid-year the RBA will be cutting rates. Of course, like other central banks the RBA is likely to remain a bit cautious initially and don’t expect rate cuts to reverse all 13 rate hikes over the last two years but by year end we expect the RBA to have cut rates three times taking the cash rate to 3.6%.

Curated by James Gruber and Leisa Bell

Latest updates

PDF version of Firstlinks Newsletter

Quarterly ETFInvestor (ETF Market Data) from Morningstar

ASX Listed Bond and Hybrid rate sheet from NAB/nabtrade

Listed Investment Company (LIC) Indicative NTA Report from Bell Potter

Plus updates and announcements on the Sponsor Noticeboard on our website

 

29 Comments
Peter
February 10, 2024

I was lucky enough to do Commercial Principals and Pratices when I was in secondary school. A great subject at the time which taught the basics of saving, investing, borrowing and most importantly, buying a car and how to fund it and look after it. The subject also covered doing tax returns and basic bookkeeping as far as preparing a trial balance. Years later when I became a teacher I managed to include a lot of these areas in life skills type courses as well as how to apply for a rental property and the costs of renting. Most students decided not to move out when they realized the costs involved. I did this in courses for a one year prevocational TAFE course with students (Year 10 plus) who were going on to apprenticeships where there was nothing about financial literacy or matters such as stress management etc. Since there were no resources to speak of, I made them and collected them into a manual and some games. As for the idea of teaching how to do a tax return, I think the online process has become far too complex except for the most basic of wages and salaries. I could cover filling in a tax return and all the questions that came with it, in half a day. Today I think that would be impossible.
Needless to say, students were happy, parents were ecstatic seeing a moody teenager suddenly change for the better and get an apprenticeship in the student’s desired area. So what happened? The powers that be decided that they didn’t want to offer the course anymore. Unbeknown to the teachers, students self-organized a deputation to the Minister, which got nowhere - except trouble for the teachers. All the resources ended when the course stopped.
The only way I can see to improve financial literacy might be to offer short extra curricular courses at local schools, but you need to be very focussed and extremely well prepared, structured and resourced. Most presenters I have seen in a similar setting do not know how to engage school students.

Margaret S.
February 05, 2024

Dear Editor, James Gruber, Leisa and all you kindly empathic commentators on this article;

please spare a thought for those who have single-handedly become financially self-educated enough to make money, with no or minimal, formal computer literacy. It has been a lonely, closeted, time-consuming, retirement occupation! The shortage of School Teachers in Australia precludes asking current Teachers to realistically undertake students' financial education. Perhaps any excess graduates with Finance and Accounting Degrees might be extremely welcome here, while doing a special, further, part-time, evening, Diploma of Education qualification.
My plea is for State Governments to now fund and train older, retired investors who have limited computer skills, in basic, financial records, in relevant parts of Microsoft Office, at State Government Technical and Further Education kinds of Colleges, which could have multiple, disability parking spots near easily accessible, ground floor classrooms and toilets, bearing in mind that these students' wouild have special, Occupational Health and Safety needs , but the valuable financial capacity to on-going, self-fund their retirements.

Lyn
February 06, 2024

Hi Margaret S, >50 yrs ago led night classes (wine) in a school's P & C fundraising, they did woodwork, metalwork, sewing, French etc. Not associated with the school, was via my job. Nightclasses for interests were common for some schools. Classes full, school benefited whether wine or woodwork. Don't hear of now, must be allowed as a dance leader did class at a state school last year. Your idea for finance could slot as discussion group rather than teaching, avoiding vested interests. People go out for fitness class, why not finance if P & C's re-invent use of schools for all if right mix of subjects to appeal.I saw people return to the class next door the next term and so on, was a nice environment to be part of.

charles
February 04, 2024

Sixty years ago I was the Education Officer at the Sydney Stock Exchange. Most days we had visits from schools with kids aged around 14 and we gave them a talk about basic investing, showed them a film about the stock market and showed them trading on the exchange floor with chalkies etc through an observation window. We also took our education session to schools in country areas. I'd be interested to know if the ASX does anything like that these days

Warren Bird
February 04, 2024

Hello Charles, that role played a part in my journey to work in finance, though I think it was your successor who was doing the educating in 1974. I won a cruise to Fiji as dux of my year. It was an educational cruise with lectures each morning about where we were going to be visiting, but also with the education officer of the stock exchange doing his thing. (I think his name was Bruce Bond, but I might have that wrong.) His passion for investing in shares played some part in my choices of subjects to study and eventual move into that field as a profession.
I don't know if that role still exists at the ASX, but they do have quite a few education resources, including online courses (https://www.asx.com.au/investors/investment-tools-and-resources/online-courses) .

Graeme Newcombe
February 04, 2024

Yes, Bruce Bond. I remember him. I attended similar sessions with him in the 70s. Thanks for bringing back the memories.

Andrew Smith
February 04, 2024

Agree on finance for schools, in addition to critical thinking/analysis and home economics; also needs to be accessible to adults as many are financially illiterate.

Annika
February 04, 2024

James - this is such a great idea and we (as an industry) should be doing all we can to promote and fund financial literacy in schools.

Ted
February 04, 2024

It is so obvious that people need to know how to manage their money..but not just saving and investing but also all of those financial activities that we engage in, such as, taxation, insurance, buying or renting. using credit.....earning an income...
And how fluctuations in key economic variables and economic policy affect individuals and the economy.
It is now that I agree completely with Disgruntled. Do governments really want to be punished for: bad economic management, playing with the CPI or Cost of Living indexes, or the unemployment rate data......
Why train people in financial/economic decision making when they will learn to think critically???????????????//

Steve
February 03, 2024

Good idea, tricky to implement. I suspect the "committee" approach would make political correctness more important than factual info. Are credit cards good or evil? If you take out a mortgage and the bank increases interest rates are you a victim? etc. In todays world there is ample info on basics on line - perhaps this would be an avenue that bypasses the need for financially literate teaching staff to teach this stuff.
I think one exception due to the obvious targeting of the the young is some education on the dangers of gambling, and why the odds are rarely in the punters favour. That's a no brainer.
But as in all things, parents do make the difference. That's just life.

Petet Taylor
February 05, 2024

Perhaps algerbra could be replaced with financial literacy. A manual already exists in noel whittakers money made simple and associated online calculators.
Students should be able to understand the oportunity cost owning a car over 5 years compared to saving a deposit for a unit and be able to grasp the concept of the miracle of compounding interest

Lyn
February 03, 2024

How about a National Savings Scheme via Fed.Govt for primary school children at AusPost with actual Savings book stored at school (children lose things), book gives visual for them of deposit & its' addition, see interest when added. Bypasses bank preference of old scheme. Most towns have P. Office/sub-P.O. agency closeby, children walked there making form- fill & deposit at counter part of a double Maths lesson (to allow queue & walk time) say 5 times per term. Deposit books sent home end of term so withdrawal in presence of parent if child a planned goal.
In either Yr9 or Y10r Maths mine did Cr. card, interest free period/high interest egs, compound interest, difference gross and net income re tax, recall as surprised on syllabus, homework quite hard but all in teaching notes/ examples, appropriate at age for first part-time jobs.

Ian
February 03, 2024

Great thinking - perhaps if you sent this to both the Private School headmasters and to each of the school Councillor members it would spark a start to what you propose, which may then be followed by the Public Schools.
I was very lucky, as from about the age of 11 there was a local businessman in my village that took an interest in me (I did not have a father and we lived in government housing) and really taught me a lot about how businesses operate having me go to the markets with him to buy produce and actually bargain with the traders to get the best deal etc.
I was lucky, but other children need the training that you propose and unfortunately it is the under privilaged who miss out - but the chidren have the ability, just not the opportunity.

Paul Watson
February 02, 2024

The CBA, and to a lesser extent several other banks, proved that the temptation to leverage school banking, and any semblance of basic associated financial literacy attached to these programs, to push product and seek to foster ‘financial conscripts’ was too great.

The banks social licence to re-enter this realm has well and truly been scuppered.

On the other hand, governments- federal and state, have a fundamental obligation to integrate basic financial literacy in the national school curriculum. There continuing failure to do so is frankly unacceptable.

James
February 02, 2024

James - have you read the national curriculum?

James Gruber
February 02, 2024

Sure have, James.

Dave Roberts
February 02, 2024

I enjoyed reading John Fox’s spread sheet for Australian Equities LICs. Could he explain how he calculates Cost? These seem higher than the advertised rates on their websites. I am obviously missing something.

John Fox
February 02, 2024

Hi Dave,

Thanks for the positive feedback on the website!

This is an interesting question, and a deeper one than I originally thought when I embarked on the Cost section of the website.

The way that Funds (in this case, LICs) report 'Cost' (or 'MER') isn't standardised across the industry. So, I went to the source of truth (the Corporations Act of 2001) to find the correct method to calculate the cost of a Fund to the investor. I then used this approach for all the LICs on the website.

The method is:
'Included Costs' / 'Average Net Assets'

'Included Costs' are all the costs the LIC incurs in a given year (found in the financial statements), but excludes income tax, financing costs and brokerage (I found the exclusion of brokerage interesting, but the rationale is that an individual investor would also incur this cost if they replicated the strategy of the Fund).

The definition of 'Average Net Assets' wasn't clear in the Act. It could either be before of after long term tax liabilities, which for some funds, is a big difference. I decided, for fairness across the funds, to use 'Pre-tax Net Assets'. And in terms of the word 'Average', I took the start and end of the financial year, and took the average.

I decided to exclude 'Performance fees' from the Cost figure displayed on the home page table, as Performance Fees only are introduced when outperformance occurs. However, if you want to include Performance Fees, you could go to the 'Cost Indicator' chart on one of the LICs pages, and elect to include Performance Fees.


I think the biggest reason for the discrepancy you mentioned is that some LICs only mentioned their 'management fee' (the fee charged to the external investment manager). However, LICs incur other costs too, such as Director Fees, Advertising & Promotion, Office Rent, etc. The cost calculation on the Listed Landscape website includes of these additional costs too.

Hope this info helps. Let me know if you have any other questions.

Cheers,
John

Dave Roberts
February 02, 2024

Thanks John,
Based on the two LICs I have an interest in the extra cost compared to their websites is 0.14%.
One interesting aspect when looking at your list of Australian Equities funds is the majority seem to be trading below NAV. Is this partly because ETFs have soaked up investors cash in the last few years. There is also the worry that those trading above NAV will return to even or below.

Jesse Nihill
February 05, 2024

Hi John
A useful resource well done.
I note that the MER for AUI is 0.11, whereas it's 0.10 on the LMI link and 0.13 on the ASX investment products resource. With MFF, you have it as 0.31, LMI 1.14 and the ASX 1.25.
MFF in particular is a big difference.
Cheers
Jesse

John Fox
February 06, 2024

Hi Dave & Jesse,

Thanks for the feedback.

Regarding your observations on Costs/ MER, I do agree, there is discrepancy between different publications in the industry. This is why I decided to go to the base sources (Corporations Act for calculation methodology, and Financial Statements for the figures) to do my own raw calculations, rather than use quotes figures from elsewhere.

Take MFF for example, Jesse I agree, the ASX website says it has a MER of 1.25%. But in FY23, it only had costs of $5.5m on an averaged pre-tax net assets of about $1.8b. This equates to a Cost of about 0.3%. There isn't any external management or performance fees (although there used to, a few years back). Maybe this ASX figure is an old figure they haven't updated.

Dave, regarding the discounts to NTA, I think there’s a range of factors that influence this (reputation, cost, performance, div yield, overall market sentiment etc.). I don’t think there’s any one reason. Take PGF for example, it's gone from a historical -20% discount, to now trading above NTA. But yes, this dynamic is an additional risk (& also potential upside) of investing through LICs.

Thanks again gents for the feedback and questions.

Disgruntled
February 02, 2024

Government are not interested in teaching financial literacy in schools. It's not in a governments interest to have a financially literate population.

They need an indebted workforce to keep the wheels spinning.

Work, consume, Borrow, Consume more. Keep working.

They don't want a mass of Financial Independents Retired Early.

DougC
February 02, 2024

I agree with the intent of the article and the need for financial literacy for students. How and why the government spends the money the student will eventually pay in tax is also important to understand. Primary Ethics is another essential (or perhaps our pollies, institutions, businesses and the community don’t need to know about ethics !?).
But I also remember a scene from a parent-teacher meeting at my son’s school years ago when the staff were asking for support for 1 day in the year for their curriculum updates study. A teacher wheeled-in a trolly with a small book in the middle of the upper shelf – it was the curriculum from a couple of years previous. Another teacher then wheeled-in a trolly with both shelves piled with books, overflowing onto the floor – which was the current curriculum that teachers have to find their own time to learn. Add Financial Literacy to the pile ?

Shez
February 02, 2024

You could give students a book by Scott Pape called “Barefoot Investor “ to learn the basics.
I am sure there are numerous books on investing and finance, which interested parents and grandparents could encourage students to read. That is how I started.

Kay
February 02, 2024

Scott has also written a book for Family's; he has 4 children. He was very vocal re CBA Dollarmites encouraging children to use Credit Cards. He tried to get a financial education programme introduced to schools, but funding was not approved.

My Father told me several times that Financial Advisors were 'crooks' when I was little, I did not understand what he meant. When I was naïve and much younger, I had to see a Financial Advisor to obtain Salary Sacrifice. I would not have seen a FA otherwise, and I should have limited that contact to just the necessary for the SS. I was happy to pay a professional who, I assumed, would act like I did professionally. At the end of that relationship, I reflected that I had paid for advice which resulted in him using my money for his own benefit. Dad was right. Scott covers this very well in Barefoot Investor.

Edward Hack
February 01, 2024

Great article James. I would add teaching how to do a simple tax return to your list. I am surprised by how many of my friends pay their accountants or HR Block to do their personal returns.

Michael2
February 02, 2024

I get an accountant to do my tax return even though I can do it myself because he sees what makes money and what doesn’t, and that can mean I find out useful things when we sit to discuss the tax return

Alan George
February 01, 2024

Have to agree that teaching budgeting and investing in schools is essential. This should be part of the core curriculum. It should involve hands on practice with student selecting and buying shares etc. it should also teach them about property investing and superannuation. In addition students need to be taught life skills including health, nutrition, relationships, conflict resolution, civics, ethics etc. All student should have to reach a required level of competencies.

Ray King
February 01, 2024

James
Excellent article. In the late 1990s I put the idea of introducing Investing and Superannuation studies into the Secondary school program at or around year 10 level. Steve Gibbs [head of AIST at the time] and my brother Keith King, a teacher in the Humanities disciplines worked hard and had it adopted into the Business Management program in Victoria. Several other states followed but it didn't survive. Your ideas have great merit.
I think it failed because the teachers weren't educated in Investment and Superannuation. Now its a bigger issue and might be best broadened to finance and used industry experts Ray King

 

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How useful are the retirement savings and spending targets put out by various groups such as ASFA? Not very, and it's reducing the ability of ordinary retirees to fully understand their retirement income options.

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On the virtue of owning wonderful businesses like CBA

The US market has pummelled Australia's over the past 16 years and for good reason: it has some incredible businesses. Australia does too, but if you want to enjoy US-type returns, you need to know where to look.

Investment strategies

Why bank hybrids are being priced at a premium

As long as the banks have no desire to pay up for term deposit funding - which looks likely for a while yet - investors will continue to pay a premium for the higher yielding, but riskier hybrid instrument.

Investment strategies

The Magnificent Seven's dominance poses ever-growing risks

The rise of the Magnificent Seven and their large weighting in US indices has led to debate about concentration risk in markets. Whatever your view, the crowding into these stocks poses several challenges for global investors.

Strategy

Wealth is more than a number

Money can bolster our joy in real ways. However, if we relentlessly chase wealth at the expense of other facets of well-being, history and science both teach us that it will lead to a hollowing out of life.

The copper bull market may have years to run

The copper market is barrelling towards a significant deficit and price surge over the next few decades that investors should not discount when looking at the potential for artificial intelligence and renewable energy.

Property

Global REITs are on sale

Global REITs have been out of favour for some time. While office remains a concern, the rest of the sector is in good shape and offers compelling value, with many REITs trading below underlying asset replacement costs.

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