My inbox has been flooded with messages from public relations spokespeople representing the investment industry. The outbreak of war means dusting off the well-worn crisis checklist.
Step one: say something - anything! - as fast as possible.
Step two: wait and see what happens.
Given the Pavlovian nature of the response and the emphasis on speed over substance we’ve all heard the same things repeatedly. Little qualifies as pearls of wisdom.
I’ve learned there may be volatility and oil prices may rise. I got my semiannual reminder about the Strait of Hormuz. I’ve heard about how every conflict from the First World War to the Emu War has impacted markets.
Traders must be busy. Each twist and turn of the market is an opportunity to profit. If you are a long-term investor it is best to do nothing while the war plays out.
When events are dramatic and unpredictable many people reflexively turn to short-termism. Take the media fixation on rising oil prices. This obscures the most likely scenario that an accommodation or regime change will lead to more oil supply over the long-term. Especially given what has happened in Venezuela.
Focus on the potential for the conflict to accelerate or slow the emerging trends shaping markets. These include the impact of AI, the dismantling of the globalization era, and structurally higher inflation and interest rates.
It is the second order effects that will matter. Those are the ones that are far harder to predict.
Think about the headlines that will appear the day after the war ends when the market goes back to worrying about something else. Pay attention to the things that slip under the radar as the front page is dominated by Iran.
Most of all, remember the key is always you. Controlling your own emotions will lead to success.
You will be faced with the same investment challenges when this war is over. Figuring out the best strategy for your unique situation is far more important than any forecast.
As Ben Graham said,
“The investor can scarcely take seriously the innumerable predictions which appear almost daily and are his for the asking. Yet in many cases he pays attention to them and even acts upon them. Why? Because he has been persuaded that it is important for him to form some opinion of the future course of the stock market, and because he feels that the brokerage or service forecast is at least more dependable than his own.”
You won’t find this edition of Firstlinks filled with news on Iran. Instead, the focus continues to be on providing unique insights to help you achieve your long-term goals.
We have a retirement heavy edition tackling the triple threat of aging, super inheritance, borrowing in your SMSF and the perennially hated annuities. We also get an overview of results season, a look at financial advice and a little fun to coincide with the start of the AFL season.
Mark Lamonica
In this week's edition...
The age of retirement is upon us, declares Aaron Minney. An ageing population is putting new demands on super and aged care and how this disruption plays out will impact the lives of older Australians.
A strong ASX reporting season was widely expected and Australian companies delivered. Jun Bei Liu outlines what companies delivered dividends and capital returns and what risks investors are facing going forward.
Tobias Barkley outlines a crucial step to take if you want your loved ones to inherit your super.
Did you know there were 16 steps to get a mortgage on an investment property in a SMSF? If not, read the approach that Peter Townsend recommends for anyone considering property.
The goal of finance advice is to improve outcomes. Joachim Klement takes a look at two studies that show good advisers can create enormous value for clients…but average advisers don’t.
When the new AFL season kicks off a wild-card will be added to the finals. Tony Dillon breaks down the change and provides an analytical assessment of the new format.
Academics love annuities. Almost everybody else hates them. Don Ezra explores how you can get your ‘money’s worth’ and the emotional aspect of exchanging a lump sum for a stream of future income.
This week's white paper from Schroders' QEP Investment Team explores the anatomy of asset bubbles that aren't quite there yet.
Curated by Mark Lamonica and Leisa Bell
Latest updates
PDF version of Firstlinks Newsletter
Monthly Investment Podcast by UniSuper
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