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25 April 2024
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For some Australians, there’s a concessionally taxed superannuation investment opportunity dating back to the 2018-19 financial year that will expire on 30 June this year. Here is what you may be entitled to.
One of the hardest decisions for many people – excluding those who want to keep on working – is choosing when to stop. Moving into pension mode is a big decision, and here are some options and considerations.
Brandywine Global's Richard Rauch warns of US and global recession risks, Vanguard's Duncan Burns on building a simple, effective investment portfolio, and Peter Warnes on the Australian market outlook for 2024.
When looking at long-term equity index charts, it’s easy to forget the individual stocks underpinning the indices don’t move as a unified block. This has important implications for how you try to extract returns from markets.
As interest rates normalise, investors have been pouring money into cash and bonds, and out of equities. This type of tactical asset allocation may seem sensible though it's unlikely to deliver the best long-term results.
A growing number of Australians are choosing to hedge their international equity exposures. Currency movements are difficult to predict so investors should treat currency hedging as a way to manage risk, not to add return.
More than a third of SMSFs have indicated an increased allocation to cash and cash-like products. Cash is often seen as risk-free yet it isn't, especially when high inflation means real cash returns remain in the red.
Financial markets have been volatile of late, and it's tempting for investors to seek shelter in cash for some or all of their nest egg. While that may seem a sensible strategy, it can also be a costly one.
A new report says many Australians want annual income in retirement of $100,000 a year, far above the amount needed by existing retirees. Less wishful thinking and more realistic planning for retirement is required.
About 20% of the $890 billion in SMSFs is allocated to cash and term deposits. While understandable to an extent, more of this money is likely to make its way into bonds given the now attractive yields on offer.
A collection of interviews with financial markets experts on investing, superannuation, retirement and other topical issues, as published by Firstlinks over 2021 and 2022.
An index rebalance occurs when the composition of an index changes. Fund managers must buy and sell stocks to match the rebalanced index and to achieve their index-tracking objective, but there are consequences.
When a business that manages funds worth three times the entire Australian superannuation system enters the market, it's a sign of yet more change coming to the sector. How do its plans fit into a long-term strategy?
It's tough to become the 'best' investor in the world, but we can certainly avoid being the 'worst'. Here are graphical examples of some long-term principles to adopt, including the difficulty of timing the market.
Pundits have once again declared the death of the 60% stock/40% bond portfolio amid sharp declines in both stock and bond prices. Based on history, balanced portfolios are apt to prove the naysayers wrong, again.
On 1 July 1992, the Superannuation Guarantee created mandatory 3% contributions into super for employees. SMSFs were an after-thought but they are now the second-largest segment. How have they changed?
A topic that was once considered niche is now an enduring component of the investment decision-making process. Here we cover the fundamental investment approaches and strategies that consider ESG matters.
Taking a 'total return' approach rather than focussing only on income allows investors to build portfolios in line with their goals and risk tolerance using rebalancing back to their target asset allocation.
We use weather forecasts to inform our planning but they do not entirely drive decision making. The same should happen with investment outlooks. A globally diversified portfolio will serve best in unpredictable times.
Investors ask whether global supply chains were stretched too far and too complex, and following COVID, is globalisation dead? New research suggests the impact on investment returns will not be as great as feared.
Investors should prepare for a decade of returns below historical averages for both stocks and bonds. Over the next decade, equity returns may be tiny compared with the lofty double-digit returns of recent years.
ETFs, LICs and MFs. These investment options share some similarities but there are also important differences that make them more or less suitable for particular investors. There are a few key features to know.
A fund that is 'passive' does not mean its managers merely invest as directed by the index with little concern for ESG risks. Good stewardship is valued as much by 'indirect' investors as direct shareholders.
While western policymakers aim to sustain economic recovery, Chinese post-pandemic policy normalisation is a headwind with slower credit growth, less government bond issuance and a reduction in the fiscal deficit.
ETFs have gone from bit player to major force in Australian investing in the space of a few years, and will top $100 billion soon. One of the major providers explains how they bring products to the market.
The next phase of recovery depends on immunity to COVID and reduced consumer reluctance to engage in normal economic activities. What are the various scenarios and how do they influence a balanced portfolio?
Although Australian investors are among the most ESG-aware in the world, with the vast majority wanting responsible and ethical investments, there are still some misconceptions to dispel.
More retail investors than ever are speculating on the stock market, driven to FOMO by the success of others. Here are five rules which have stood the test of time rather than hoping speculation works.
Going back to June 2019, investors would have questioned the logic of diversifying away from outperforming growth assets. But when markets feel at their best, it is paramount to keep a perspective on long-term goals.
Popular belief is that all index funds are the same, but it pays to follow this framework, which shows there is more to consider than the cheapest management cost. Replicating an index is not easy.
Rather than tying spending only to the income generated by a portfolio, a total-return approach encourages the use of capital returns when necessary to meet defined goals.
Investing in a traditional index can be compared with taking the main road to a destination, but if you know the backroads and traffic conditions, you coud reach your goal quicker.
A look at long-term performance gives a sense of perspective that helps tune out short-term noise, focus on your long-term goals and ‘stay the course’. Here are some interactive charts.
Cost is one part of investing that people saving for retirement can control, and it's surprising how the compounding impact of small cost savings build up to large amounts over a long accumulation phase.
Inevitably, with each new development in this cycle, investors as what they can do to prepare for a recession. Our answer: revisit asset allocation, diversify, and review active risks in your portfolio.
The main focus in retirement planning should be on the entire return from a portfolio, not just the income generated, and this might help some people in managing changes due to Labor's franking credit proposal.
As Warren Buffett said: "If a statue is ever erected to honour the person who has done the most for American investors, the hands-down choice should be Jack Bogle." The 'father of indexing' died last week.
ETFs reached over $40 billion by the end of 2018, with international equities ranked first for net flows, and a rapid growth in fixed income products. Cap-weighted indexes dominated but smart beta is gaining ground.
As the population ages and property prices rise rise, equity in owner homes has more potential as a significant source of 'retirement income'. But an ASIC report highlights complexities in reverse mortgages not well understood.
This excellent Interactive Index Chart shows market performance of various asset classes since 1970, and allows readers to compare the growth of $10,000 invested in these asset classes over historical periods.
Although over one million Australians are trustees of SMSFs, ASIC reports that many do not have the expertise or time to take responsibility to manage their own superannuation.
The concept of factor investing has been around for decades and features in many portfolios. A considered and patient use of factors can enhance investment performance but not short term in all market conditions.
The ATO has released all the superannuation rates and thresholds that will apply from 1 July 2024. Here's what’s changing and what’s not, and some key considerations and opportunities in the lead up to 30 June and beyond.
Life has radically shifted with my brain cancer, and I don’t know if it will ever be the same again. After decades of writing and a dozen years with Firstlinks, I still want to contribute, but exactly how and when I do that is unclear.
Australia will have 3.7 million more people in a decade's time, though the growth won't be evenly distributed. Over 85s will see the fastest growth, while the number of younger people will barely rise.
Being rich is having a high-paying job and accumulating fancy houses and cars, while being wealthy is owning assets that provide passive income, as well as freedom and flexibility. Knowing the difference can reframe your life.
Investor disgust, consolidation, de-listings, price discounts, activist investors entering - it’s what typically happens at business cycle troughs, and it’s happening to LICs now. That may present a potential opportunity.
The $3 million super tax will capture retired, and soon to retire, public servants and politicians who are members of defined benefit superannuation schemes. Lobbying efforts for exemptions to the tax are intensifying.