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Edition: 212

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Edition 212

  • 28 July 2017

The Holy Grail of investing is high returns with low risk. When a fund or index delivers a return of say 10% and volatility (used as a measure of risk) of 10%, analysts say it has a 'Sharpe Ratio' of 1.0 (ie return/risk). This 'risk-adjusted return' rarely averages over 1.0, and 0.5 is considered a good result. Yet according to Bloomberg, in the 100 months to June 2017, the S&P500 index delivered a Sharpe Ratio of 1.4. A stellar result.

Tension as diversified portfolios have lost their anchor

With the strongest defensive assets earning close to zero and negative real returns, investors are looking at other ways to shock-proof their portfolios, but it invariably means taking on more risk.

Decide if 'fake crises' are worth the worry

Instead of automatically reacting to fake crises, a better approach is to weigh up the pros and cons first. If the news proves to be correct, take action based on your risk tolerance.

How to improve retirement outcomes for women

Adequate retirement incomes rely on accumulating superannuation balances throughout a working life, and many factors are detrimental to women keeping pace with men. Urgent reform is needed.

Disruption supports small company growth

New technologies and markets are driving opportunities for small to medium cap companies, as well as the global tech giants. Many Australian companies have jumped on the wave.

5 factors for SMSFs investing in residential property

Should SMSFs invest in residential property, should they borrow to do it and what is the impact on housing affordability and market stability?

Easier transfer of death benefit pensions

Transferring a death benefit pension can be complicated but new legislation from 1 July 2017 simplifies the process.

Are banks misjudging retirees?

A retired reader wrote to us about his poor treatment by several banks, seemingly because he is retired. Are banks missing out on opportunities to service retirees?

Australian LICs versus Berkshire Hathaway

As part of the continuing discussion about dividends, Peter Thornhill sent in a chart that compares the long term performance of three Australian LICs with Warren Buffett's legendary Berkshire Hathaway.

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What to expect from the Australian property market in 2025

The housing market was subdued in 2024, and pessimism abounds as we start the new year. 2025 is likely to be a tale of two halves, with interest rate cuts fuelling a resurgence in buyer demand in the second half of the year.

The perfect portfolio for the next decade

This examines the performance of key asset classes and sub-sectors in 2024 and over longer timeframes, and the lessons that can be drawn for constructing an investment portfolio for the next decade.

Howard Marks warns of market froth

The renowned investor has penned his first investor letter for 2025 and it’s a ripper. He runs through what bubbles are, which ones he’s experienced, and whether today’s markets qualify as the third major bubble of this century.

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Key lessons include expensive stocks can always get more expensive, Bitcoin is our tulip mania, follow the smart money, the young are coming with pitchforks on housing, and the importance of staying invested.

The 20 most popular articles of 2024

Check out the most-read Firstlinks articles from 2024. From '16 ASX stocks to buy and hold forever', to 'The best strategy to build income for life', and 'Where baby boomer wealth will end up', there's something for all.

2025: Another bullish year ahead for equities?

2024 was a banner year for equities, with a run-up in US tech stocks broadening into a global market rally, and the big question now is whether the good times can continue? History suggests optimism is warranted.

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