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Welcome to Firstlinks Edition 592 with weekend update

  •   2 January 2025
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The Weekend Edition includes a market update plus Morningstar adds links to two additional articles.

Welcome to our 13th year of publication and I hope you had lovely Christmas and New Year.

One of the special features of Firstlinks is our community of readers and the many comments that our articles receive. Here is your chance to set the agenda for 2025. What topics would you like to see covered? Is there something we're missing? Are there authors you'd like to see more of? Or perhaps you'd like to get something off your chest and engage with others. If so, keep it civil and non-promotional.

Please leave your comments below. 

James Gruber

In this week's edition...

Each week, Firstlinks receives more articles than we can publish. Selections are based on relevance for our subject areas and audience, quality of the writing and expected popularity. In 2024, we published more than 400 articles. While a good quality article on an investment topic might receive 5,000 views, this year we had several articles over 30,000. This week, we compiled a list of the most popular articles of 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 everyone.

Roger Montgomery is back to give us his thoughts on 2025. While a chorus of market watchers insist the current rally in equities is overdone and that markets are ripe for a correction, Roger isn't so sure. He's done a deep dive through history and thinks there's reason for more optimism.

It's a time of year for both reflection and looking forward. Kaye Fallick has pondered her own life and the central role that travel has played. In creating cherished memories, meaningful connections, and personal growth. Rather than a luxury, she thinks of travel as a priceless investment.

Two extra articles from Morningstar this weekend. Seth Goldstein lowers his forecast for car deliveries for Tesla after an update from the firm, while Mark LaMonica muses on Warren Buffett's most misunderstood quote

****

Weekend market update

Stocks in the US enjoyed a strong 1.3% bounce on the S&P 500 on Friday as the broad index recouped roughly one-third of its post-Dec. 16 pullback, though rates continued higher with 2- and 30-year Treasury yields each rising three basis points to 4.28% and 4.82%, respectively. WTI crude remained on the hop at US$74 a barrel, its highest since mid-October, while gold gave back about half of prior day gains at US$2,637 per ounce and bitcoin advanced above US$98,000. The VIX sank to just above 16, down near two points on the day.

From AAP netdesk:

The Australian share market on Friday closed higher for a second day, with goldminers and uranium developers enjoying especially strong gains.

The benchmark S&P/ASX200 index on Friday finished 49.3 points higher at 8,250.5 - a gain of 0.6% - while the broader All Ordinaries rose 46.9 points, or 0.55%, to 8,511.9. The ASX200 dipped 0.14% for the holiday-shortened week after losing ground on Monday and Tuesday.

The ASX200 opened about 20 points higher and climbed further after the Financial Times reported that China's central bank said it was likely to cut interest rates from their current level of 1.5 per cent "at an appropriate time" in 2025.

The People's Bank of China said it would prioritise "the role of interest rate adjustments" in what the Financial Times described as a transformation of Chinese monetary policy.

Ten of the ASX's 11 sectors finished higher, with materials/mining the outlier, dropping 0.2%.

Energy was the biggest mover for a second day, rising 1.3% amid more gains for uranium developers after Canada's Cameco said its Inkai joint venture in Kazakhstan had been forced to suspend production because of a lapse in government authorisation.

"We are disappointed and surprised by this unexpected suspension and we will be seeking further clarification on how this transpired," Cameco said in a statement.

Deep Yellow, Boss Energy and Paladin were the ASX200's best performers on Friday, with gains of 9.4, 5.2 and 4.3% respectively.

Goldminers also did well as the precious metal changed hands at a two-week high. Northern Star gained 2%, Evolution rose 1.2% and Newmont advanced 3.2%.

Elsewhere in the sector, BHP dropped 0.5% to $39.76, Rio Tinto retreated 0.6% to $117.47 and Fortescue dropped 2.1% to $18.41.

All of the big four banks were higher, with CBA rising 1% to $155.03, ANZ adding 0.9% to $28.86, NAB advancing 0.8% to $37.55 and Westpac climbing 0.7% to $32.64.

In health care, EBR Systems surged 24.1% in afternoon trading to an all-time high of $1.365. There was no obvious reason, but the company expects to soon receive feedback from US regulators on its leadless pacemaker system.

Curated by James Gruber and Leisa Bell

Latest updates

PDF version of Firstlinks Newsletter

ASX Listed Bond and Hybrid rate sheet from NAB/nabtrade

Listed Investment Company (LIC) Indicative NTA Report from Bell Potter

LIC Monthly Report from Morningstar

LIC Quarterly Report from Bell Potter

Plus updates and announcements on the Sponsor Noticeboard on our website

 

32 Comments
Dac Nguyen
January 09, 2025

10% of tax on the residential market can wipe away the government debt, given personal income tax is abolished. I find it hard to believe that we like to bury capital underground (property value) whilst taxing to the hill the fruits of labour. Having more income to spend and ingenuity of Australian people will certainly be powerful if we want to compete in the future.

I hope there's an article or several to discuss this.

Ray Falzon
January 05, 2025

Hi James,
Firstly, I think the current topics covered are pretty good, and I usually find an article or two to read each week.
I do have a question though.
I note that 'Firstlinks' is a Morningstar company, and so am often a little perplexed why an article like '16 ASX stocks to buy and hold forever' mentions a list of ASX stocks that have a low correlation to the monthly 'Morningstar Model Income Portfolio' of ASX stocks. On my quick count, there are just 3 stocks common across both lists (ASX, Aurizon, and Transurban).
I appreciate James that, as the author, you and the other writers have an independent view on what constitutes a list of stocks to buy and hold forever, but all the same, as a reader of both platforms, one would think that a list of stocks to 'buy and hold' across both publications would be more similar?
I would be interested to hear why it's not necessarily the case?
Regards
Ray

James Gruber
January 06, 2025

Hi Ray,

Two key differences between my article and the Morningstar Model Income Portfolio:

1. Morningstar's is specifically for income while '16 ASX stocks' isn't.
2. Timeframes. I chose stocks to hold forever. Morningstar's list is long term but not forever - they would change stocks in that list regularly.

One last point: Morningstar owns Firstlinks but it knows part of our secret sauce is having an independent point of view. If I advocated buying stocks that Morningstar hates, then there might be a problem, but otherwise, different opinions are encouraged.

Best,
James

Ray
January 06, 2025

Thanks James,
Yes, that independent 'Secret Sauce' concept makes sense to me.
Cheers
Ray

Kevin L
January 05, 2025

Clear step by step on what to do at age 65 with super contributions into employer plans. There have been from time to time some distal references to stop paying 15% when you don't have to. But its not spelled out whether that means call your employee super rep and say stop paying voluntary contributions into super? And assuming that is the case is the corollary to put the same amount into your pension account from after tax funds. Sum is there are several mentions across various articles about what should not be done, and what should be done, but not one that pulls it together. And understand that depends on your financial situation is the caveat but lay it out for one (most typical) to three (include high and low scenario)

James Gruber
January 05, 2025

Kevin L,

Good topic, thanks.

James

Gordon
January 05, 2025

Investing during turbulent economic and geopolitical times. This would naturally include defensive investing

Jarrod
January 05, 2025

Hi James,
A proposed topic : General advice and overview of investing in US shares that are dividend paying stocks with long term capital growth and dividend growth prospects. Other key considerations like FX, pros and cons of most popular ways to transact (via standard broker or other?).
Thanks,
Jarrod

James Gruber
January 05, 2025

Jarrod,

I've been thinking about this topic for a while, so thanks for the prompt. You should see something on this during January.

Cheers,
James

Jarrod
January 05, 2025

Fantastic, thanks James!

Peter K
January 04, 2025

The value of unlisted infrastructure investments in a SMSF, and factors that can effect short/long term performance. How do they consistently achieve
8 -10% gross returns?

James Gruber
January 05, 2025

Peter K,

I think with bonds losing popularity, infrastructure as a an alternative investment will continue to gain favour among investors, so it's a topic certainly worth exploring and some of our sponsors who are infrastructure experts should be able to answer your queries.

Kevin Brown
January 04, 2025

My suggested topic:
How are Reversionary Pensions set up in SMSFs and Industry funds? How do Reversionary pensions operate? Also how do the 1.6m or 1.7m or current 1.9m limits apply to the surviving spouse, especially when a pension has grown (through investment returns) to exceed these amounts? What are the practical steps required to be taken by a surviving spouse to part commute a Reversionary pension?

James Gruber
January 05, 2025

Hi Kevin,

I'll look into it. In the meantime, we have had several previous articles on reversionary pensions which might help you:

https://www.firstlinks.com.au/meg-smsfs-first-member-couple-dies
https://www.firstlinks.com.au/reversionary-versus-non-reversionary-income-streams
https://www.firstlinks.com.au/merits-of-reversionary-vs-non-reversionary-pensions
https://www.firstlinks.com.au/womens-super-reversionary-benefits

James

Kevin Brown
January 13, 2025

Thanks James.

Michael Hughes
January 03, 2025

Super self help as a topic?
In order to avoid paying extorionately for advice when your Super fund changes hats from general advice, the answer may be readily available online.
For example, general advice may suggest recontribution to Super as a good idea.
Specifically, is it a good idea for you? You need to know if you are eligible, your TSB from your TBC etc.
If this already makes you glaze over, perhaps you should bite the bullet and pay for advice.

Mark Hayden
January 03, 2025

I recommend asking anyone who wants to comment to provide their full name. They can choose not to provide their full name, and then note they will have less people read their comments.

Paul B
January 03, 2025

Hi Mark, There may be several reasons that someone may not want to give their full name. I always read all the comments as I get a lot out of them. It doesn't matter to me if they give their full name or a pseudonym.

James Gruber
January 03, 2025

Hi Mark,

I get why you'd want this, though not sure it would elevate the comments section if implemented. People have their reasons for not revealing their identities. And we approve all comments for publication, and occasionally edit them if warranted too.

James

Ken Pickering
January 02, 2025

The pros and cons of closing down a long held SMSF and transferring the superannuation fund into a custodial arrangement on an appropriate platform once the sole member has passed retirement age and is no longer earning personal exertion income and is no longer contributing concessional superannuation contributions.

James Gruber
January 03, 2025

Hi Ken,

I've passed this on to Meg Heffron.

Best,
James

john flynne
January 02, 2025

How well do the big super funds communicate with their members who are not proficient in English such as immigrants have worked in menial jobs and merely understand that this money is for them. The bigsuper fund their employer placed in has made no effort to communicate with them personally other than the annual statement.

Kurt Momodt
January 02, 2025

A commparison of industry based super and for profit super funds, comparison of fees, performance and functionality. This could be tied to advice(managed funds) vs etf investments.
SMSF vs managed super seems previously well covered.

James Gruber
January 03, 2025

Hi Kurt,

Yes, we'll do something on this topic.

James

Dom Gerard
January 02, 2025

Possible Topics for investigation:

1. Transparency and governance for Industry Super Funds and their relationships with the Labor Party and Trade Unions (if any ?)
2. Whether their performance justify the fees they change their members particularly with regards to high growth investments.

Chook
January 02, 2025

And add in why are fees based on a percentage of balance rather than a flat fee.

Dave Roberts
January 03, 2025

I agree with this topic.

James Gruber
January 03, 2025

Dom,

Good topics, thanks.

Dave Roberts
January 02, 2025

LICs and why investors have fallen out of love with them. Is there really any value to buying them below NTA? Will they ever return to fair value? Should they be keeping so much in reserve rather than increasing yield? Will tax liabilities of the oldest of them preclude any change to a listed trust structure to return to fair value for shareholders?

James Gruber
January 03, 2025

Hi Dave,

We covered some of this last year:

https://www.firstlinks.com.au/the-catalyst-for-lics-rebound
https://www.firstlinks.com.au/lics-may-close-bottoming

Some good points for a follow up article.

James

David Watts.
January 02, 2025

Taxation , and possible effect of future govt action with particular relevance to SMSF, and retired investors.

James Gruber
January 07, 2025

David,

Hard to predict tax, but we'll certainly cover any developments that happen in this space.

James

 

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