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The vibe of future returns: tell ‘em they’re dreamin’

Reading Time: 6 minutes

In the iconic Australian film, The Castle, the family lawyer, Dennis Denuto, is struggling to make his case in court, bumbling around with a copy of the Australian Constitution. Finally, he sums up in a segment that has both entered Australian folklore and become required viewing for law students:

“It’s the vibe of it … It’s the Constitution. It’s Mabo. It’s justice. It’s law. It’s the vibe and … ah, no, that’s it. It’s the vibe. I rest my case.”

Six simple charts on what to expect from shares

Reading Time: 4 minutes

In our recent Reader Survey, about 40% of respondents reported portfolio losses of over 20% between January and March 2020, although the market rise since the lows has pared back some of the pain. Anyone relying on their investments to fund regular spending will not only be concerned about the loss in capital value, but also the reductions in dividends. National Bank has lowered its interim dividend from 83 cents to 30 cents and ANZ Bank has cancelled it completely in a sector which traditionally provides one-third of all dividends in the listed market.

Timing the economic reboot

Reading Time: 3 minutes

After successfully navigating our initial response to the COVID-19 (coronavirus) health crisis, backed up with $285 billion in government support to individuals and businesses to keep the economy ticking over, thoughts are turning to how to get the economy back on its feet. 

It’s a huge task, but Australia is better placed than most countries. Pre-pandemic, our Federal Budget was close to balanced and on track to be in surplus this financial year. Economic growth was chugging along at around 2 per cent.

In his Statement on the Economy on May 12, Treasurer Josh Frydenberg gave an insight into the extent of the challenge ahead. He announced that the underlying cash deficit was $22 billion to the end of March, almost $10 billion higher than forecast just six months ago. And that was before the $282 billion in support payments began to flow into the economy.

A Perfect Storm to Expose Some Industry Funds

Reading Time: 6 minutes

The following article was written by Chris Brycki on the 27th of March 2020. And given his credentials, I would recommend your review. He sits on two Advisory Committees for the industry regulator ASIC and was previously a fund manager at UBS. He holds a Bachelor of Commerce (Accounting/Finance Co-op Scholarship) from UNSW. 

It reflects what we have been saying for the past 5 years and we are extremely concerned that some Industry Funds could lose anywhere from 50%-70% of value over the coming months.

The issue may not be performance-based, however negatively compounded as members are locked out from redeeming their benefit (accumulation or pension) or being able for it to be invested accordingly toward any future growth over an unknown future.

Although the following report focuses mainly on Hostplus who is in a particularly compromising position, several other major Industry Super Funds will also significantly be affected due to their extremely large exposure to Unlisted Assets, Venture Capital and Private Equity.

Don’t Jump At Shadows.

  • Willard Lloyd
  • March 4, 2020
Reading Time: 2 minutes

We all have the same 86,400 seconds per day and the competition to occupy a portion of that time is competed for aggressively.

 

Providing you with a touchpoint in excess of 18 times before news is able to influence your decision-making abilities, think about how much good news you have read in the last 24 hours and how it might impact your decision making.

How the stock market has recovered after past downturns

  • Willard Lloyd
  • March 2, 2020
Reading Time: 3 minutes

When investing, it’s important to keep the big picture in mind. Even after a 10% drop last week, the ASX 200 Total Returns Index is still up 113% over the past 10 years.

However, we know it is difficult when it’s your own money, and seeing the big picture is not always easy as your goals may not be long term.

When stock prices are plunging over a matter of days, it can test anyone’s resolve. But periods of turbulence can be good for long-term investors. For long term investors, sometimes the best advice is: “Buy stocks.”

It’s all bad until it’s good.

  • Willard Lloyd
  • February 7, 2020
Reading Time: < 1 minute

Infodemic”: an over-abundance of information, some accurate and some not, that makes it hard for people to find trustworthy sources and reliable guidance when they need it.

 

Understanding the abundance of information we’re exposed to these days and how it is, proverbially, jammed into our (multiple) screens might have at least something to do with the level of panic seen of the current novel Coronavirus.

Just as China didn’t consume nearly as much of Australia’s iron ore as it did when SARS hit in 2002-03, or send as many tourists and students Down Under, the world didn’t spread information (good and bad) through platforms such as Twitter and Facebook… they didn’t exist.