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Edition: 502

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Welcome to Firstlinks Edition 502 with weekend update

  • 30 March 2023
  • 3

Bond funds that invest in long-term fixed rate securities have suffered badly from taking duration risk, not credit risk. Even with hybrids, Australians seem unlikely to suffer a credit event. But that does not mean credit risk should be underestimated, and few retail investors can assess it properly.

Only 2.4% of companies deliver all net shareholder wealth

Over decades, relatively few companies generate all the stockmarket's outperformance. Is this an argument for passive investing or does it prove active investing is rewarded? Bessembinder lets you decide.

Meg on SMSFs: Four ways super pensions are better in SMSFs

In many ways, super pensions in an SMSF and a large public fund are the same, but flexibility differences give the SMSF features such as drawing money out as needed, managing as a couple and no need to move assets.

The growth outperformance myth

There's a common belief that the outperformance of 'growth investing' over 'value investing' since the GFC is simply due to the fall in longer-term interest rates, but is this really the case? The answer may surprise you.

The mechanics of the $3 million super tax must be fixed

Most people accept there should be a limit to the tax concessions for high super balances, but the mechanics of Government's $3 million proposal must be fixed before it is legislated. Treasury missed the detail.

Crisis, contagion or QE? The bigger picture

The current bank turmoil should not be a GFC-type event, although the risk of tightening credit conditions is real. Volatile markets are an opportunity to buy strong, growing companies trading at attractive valuations.

Brace, brace, brace: The real issue behind the banking turmoil

The key issue that lies behind the banking turmoil is the constriction of credit supply that central banks are inducing amidst their assault on inflation. The withdrawal of liquidity finds out weaknesses in the system.

How digital tokens will revolutionise investing

Investors frustrated by tedious fund application processes may benefit as asset managers look for ways to enhance their proposition and profit. Digital tokens are the next big thing as a way to represent ownership.

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Meg on SMSFs: Clearing up confusion on the $3 million super tax

There seems to be more confusion than clarity about the mechanics of how the new $3 million super tax is supposed to work. Here is an attempt to answer some of the questions from my previous work on the issue. 

Welcome to Firstlinks Edition 566 with weekend update

Here are 10 rules for staying happy and sharp as we age, including socialise a lot, never retire, learn a demanding skill, practice gratitude, play video games (specific ones), and be sure to reminisce.

  • 27 June 2024

Australian housing is twice as expensive as the US

A new report suggests Australian housing is twice as expensive as that of the US and UK on a price-to-income basis. It also reveals that it’s cheaper to live in New York than most of our capital cities.

The catalyst for a LICs rebound

The discounts on listed investment vehicles are at historically wide levels. There are lots of reasons given, including size and liquidity, yet there's a better explanation for the discounts, and why a rebound may be near.

The iron law of building wealth

The best way to lose money in markets is to chase the latest stock fad. Conversely, the best way to build wealth is by pursuing a timeless investment strategy that won’t be swayed by short-term market gyrations.

How not to run out of money in retirement

The life expectancy tables used throughout the financial advice and retirement industry have issues and you need to prepare for the possibility of living a lot longer than you might have thought. Plan accordingly.

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