Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 312

Welcome to the Firstlinks Newsletter Edition 312

Welcome to the Firstlinks Newsletter Edition 312
Graham Hand

Graham Hand


Today is 27 June and 30 June is a Sunday, so take a few minutes to think about EOFY actions. From Monday, unless they receive a member request, super funds will cancel insurance on small accounts which have been inactive for 16 months. Also, bring forward expenses for a tax deduction this year. Make contributions to super today, not tomorrow, to ensure the deadline is met. What else?

It's also time to consider portfolio rebalancing for the new year. If an asset has done especially well, do you let it run or sell based on a longer-term strategic allocation? The Reserve Bank Governor, Phil Lowe, was not much help this week, as confused as anyone:

"There are investors who think the outlook is sufficiently weak that they expect central banks right around the world to cut interest rates but they are not worried about corporate profits or credit risk. I don't really understand that ... So to me it's a strange world."

According to Frontier Advisers, returns in coming years will be about half the target of CPI plus 3.5% (net after fees) used by many large superannuation funds. 

Portfolio return estimates


In the chart, DAA is Dynamic Asset Allocation, the expected returns for the next three and five year period. RTE is Return to Equilibrium over 10 years, while CMA is Capital Markets Assumptions for a long term. The DAA portfolio is a typical 70% growth, 30% defensive, and shows investors should temper their expectations for many years.

Frontier suggests investors should consider ways to improve returns such as liquid alternatives, investing in growth assets linked to secular themes, and active management.

These issues are developed in many of this week's articles ...

Our popular Interview Series continues with AMP Capital's global property head, James Maydew. He explores global real estate trends and makes the case for active management as demographics creates winners and losers.

On another major global trend, Joe Magyer describes how Australians underestimate the value of the networks effects driving many technology success stories.

Andrew Varlamos says the franking credit debate highlighted an imbalance in SMSF asset allocations, and it's a warning to set a more fit-for-purpose portfolio even if the politics has gone.

Leading Australian futurist Phil Ruthven describes company world best practice targets, and shows the industries where Australian companies are meeting the global standards.

Each year, we highlight Mary Meeker's in-depth review of internet and technology trends, and it's worth at least watching her 30-minute video summary. 

US companies use ultra-cheap debt to buy their own shares and boost earnings per share, but John O'Brien believes if the party stops any some reason, company values will be reassessed.

Senator Jane Hume, the new Assistant Minister for Superannuation, Financial Services and Financial Technology (a new title, recognising fintech's growth), has given her first speeches and interviews. Our selected highlights show her early roadmap.

This week's White Paper further develops the views of interviewee James Maydew for the Australian property market, including where the pockets of strength and weakness lie. When 48% of the index is in retail, is that the correct investment?

For an EOFY review, see our Education Centre for LIC reports, details on all ASX-listed investment products, ETF reports from Vanguard and BetaShares and hybrid pricing from NAB/nabtrade.

Graham Hand, Managing Editor

 

For a PDF version of this week’s newsletter articles, click here.

 


 

Leave a Comment:


banner

Most viewed in recent weeks

The nuts and bolts of family trusts

There are well over 800,000 family trusts in Australia, controlling more than $3 trillion of assets. Here's a guide on whether a family trust may have a place in your individual investment strategy.

Welcome to Firstlinks Edition 581 with weekend update

A recent industry event made me realise that a 30 year old investing trend could still have serious legs. Could it eventually pose a threat to two of Australia's biggest companies?

  • 10 October 2024

Welcome to Firstlinks Edition 583 with weekend update

Investing guru Howard Marks says he had two epiphanies while visiting Australia recently: the two major asset classes aren’t what you think they are, and one key decision matters above all else when building portfolios.

  • 24 October 2024

Preserving wealth through generations is hard

How have so many wealthy families through history managed to squander their fortunes? This looks at the lessons from these families and offers several solutions to making and keeping money over the long-term.

A big win for bank customers against scammers

A recent ruling from The Australian Financial Complaints Authority may herald a new era for financial scams. For the first time, a bank is being forced to reimburse a customer for the amount they were scammed.

The quirks of retirement planning with an age gap

A big age gap can make it harder to find a solution that works for both partners – financially and otherwise. Having a frank conversation about the future, and having it as early as possible, is essential.

Latest Updates

Planning

What will be your legacy?

As we get older, many of us start to think about how we’ll be remembered by those left behind. This looks at why that may not be the best strategy to ensure that you live life well and leave loved ones in good stead.

Economy

It's the cost of government, stupid

Australia's bloated government sector is every bit as responsible for our economic worries as the cost of living crisis. Grand schemes like the 'Future Made in Australia' only look set to make it worse.

SMSF strategies

A guide to valuing SMSF assets correctly

SMSF trustees are required to value all fund assets, including property, at market value when preparing the fund's financial statements each year. Here are some key tips to ensure that you get it right.

Economics

Australia is lucky the British were the first 'intruders'

British colonisation's Common Law system contributed to economic prosperity, in contrast to Latin America's lower wealth under Civil Law. It influenced capitalism's success in former British colonies, like Australia.

Economics

A significant shift in the jobs market

The expansion of the 'care sector' represents the most profound structural change to Australia's job market since the mining boom. This analyses how it's come about and the impact it will have on the economy.

Shares

Searching for value in tech stocks

Just because a stock is cheap doesn't necessarily make it good value. This uses case studies in the tech sector to help identify when stocks trading on 30x earnings may be inexpensive and when others on 10x may be value traps.

Investing

Are more informed investors prone to making poorer decisions?

Finance Professor Michael Finke recently discussed the double-edged sword of taking an interest in your investments, three predictors of panic selling, and why nurses tend to be better investors than doctors.

Sponsors

Alliances

© 2024 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.