May 2014

Bank


What we learned this week. 30-May-14

29 May 2014 |

Learned this weekFinancial advice and the banks are coming under scrutiny. The ATO will look closer at SMSFs. The RBA thinks property prices are stretched. 7 Investment trends.


Investing

Are DIY funds facing a dividend disaster?

27 May 2014 |

DIY disasterThe biggest threat to self managed super are the "growing calls" to scrap dividend imputation. Most DIY funds have heavily relied on investing in companies that have fully franked dividends, especially the banks. If the tax break goes it would hit super funds hard.


Attacking information confusion

18 May 2014 |

andrew willinkDIY super investors have become buyers of retail investment products. But financial institutions have not prepared well for the retail market, and making sense of the information can be difficult. Enter on-line veteran, Andrew Willink.


Only a quarter of stock market "healthy"

23 May 2014 |

Only 20 per cent healthyThe Australian stock market has big risks, according to analysts Lincoln Indicators. The Healthcare, Materials, Utilities and Energy sectors are especially problematic. Lincoln also gives its top picks for each sector.


Are the banks expensive?

22 May 2014 | Broker reports editor

Banks expensiveThe share prices of the banks are high when assessed in terms of their profits. Their dividends remain strong, but those expecting share price gains might want to look closely. The overall market, however, is in line with historical trends.


The stock market that went nowhere

20 May 2014 |

Going nowhereThe Australian stock market is going sideways. It is at the same level as it was last November. Shareholders are heavily relying on tax advantaged dividends.


Banks still look strong

15 May 2014 | Broker reports editor

BankBank reporting season has ended and they are looking reasonably strong, although there are few signs of bargains. Revenue growth is improving and dividend yields are holding up.


NAB expensive but banks well placed

12 May 2014 | Broker reports editor

 NABA broker has downgrdaed its recommendation for National Australia Bank to a hold. But the prospects for the sector look good.


Regional banks get some equality with major banks

07 May 2014 | Broker reports editor

Rural BanksAfter the GFC, regional banks were severely downgraded because of their difficulties raising wholesale funding. There was a flight to the Big Four Banks. But regional banks are now seen as being on a similar footing.


News

Big funds have a big problem

20 May 2014 | Reynard

ProblemThe big fund managers tend to track the market, then underperform once fees are taken out. This is an important lesson for self managed super investors, which are much smaller. There are many other challenges.


Six tips on what to do if you live too long

08 May 2014 | Reynard

OldWe are going to live longer, and for many the super will not be enough. Moves are afoot to deal with these long term structural issues, but for those who are older and approaching retirement age, the options are different. Here are some pointers about what to do.


Contractual conundrums of investors

 Comment
01 May 2014 | Elise Margow

 Elise MargoIt is often a nightmare of many investors that just as they become comfortable navigating around complex property and share transactions they are confronted by a monstrous morass of legal documentation so lengthy, wordy and complex that it brings to mind the Joseph Joubert quote: When you go in search of honey you must expect to be stung by bees. It’s enough to make anyone throw up their hands in frustration and head for the hills.


Economics

Australia is vulnerable to what happens in China

21 May 2014 |

ChinaAustralia's reliance on China is being exposed as the iron ore price falls. The $A, and Australian banks, may be vulnerable. It is a concern for investors.


Iron ore falls, is the $A next?

19 May 2014 |

oreThe iron ore price has fallen below $100 for the first time in two years. That will hit the major miners. Will another casualty be the $A?


Budget signals you are on your own

18 May 2014 |

PlanThe Budget signals an important change to national priorities. Ageing is making it less likely that government will help you when you are old, increasing the need for self reliance. For those who are able, planning for the long term is vital.


Australia falls off one cliff, another looms

14 May 2014 |

 Au CliffThe Budget shows that capital expenditure has dropped dramatically in Australia as the mining boom ends. Asia may also be creating another cliff.


Preparing, badly, for a crash

18 May 2014 |

CrashInvestment professionals are skilled at stating the obvious -- that there is a worrying asset bubble in the global markets. This is hardly surprising considering how much governments have been printing money. But then many are fully invested. Go figure.


Savings "glut": more bull from economists

08 May 2014 |

SavingsThe idea that money is a quantity of "stuff" (a bit like water) is deeply misleading. It leads economists into blind alleys, deceived by their own metaphors. Money is transactions. You can't literally have a "glut" of transactions.


Portfolio

The perils of borrowing in super

06 May 2014 |

DangerLimited recourse borrowing is something that can be used in self managed super funds to acquire assets. But there are strict protocols on how the asset must be bought. The ATO is also starting to look at the income from such borrowing. If it is not deemed to be "on commercial terms", there may be problems.


The perversities of investment

05 May 2014 |

 confusingOne of the strange aspects of investment markets is that the rational thing to do is to buy low and sell high. But in reality it happens the other way around. Past pessimism may be deceptive, but the markets are still looking shell shocked.


Super

Want to pay for financial advice? Buyer beware.

26 May 2014 |

BewareSuper investors have to assume responsibility for what happens to their own money. There is good financial advice available, but there is also a lot of self interested advice being proffered. It is very much a case of "buyer beware".


Government leaves super alone

13 May 2014 |

Australian GovernmentSuperannuation has been left untouched in the Budget. Its tax advantages remain intact. The rise in contributions has been put off, however. The treatment of excess contributions will also change.


Part 1. An introduction to Superannuation

04 May 2014 |

Info ButtonIf you have been thinking about setting up a SMSF there are some background issues you need to consider.


Part 2. Superannuation Fund choices

04 May 2014 |

info buttonUnderstand your options before deciding on whether or not to set up a SMSF. If a DIY fund is the preferred option, it is important to focus on the primary objective of running a SMSF and sticking to it. Managing your own super fund can be complex so it makes a lot of sense to get help. Trying to save money by not getting the right advice from a professional could end up costing you more than you would have saved.


What happens if trustees lose it?

27 May 2014 |

Lose itDIY super funds are fiercely independent in spirit. But they are not usually independent in structure. Rarely is there an independent trustee. It is a big problem.


Non concessional contributions changes

13 May 2014 |

2014 upwardsAny investor looking to give their super fund balance a boost by making a non-concessional contribution, needs to be aware of some changes to the limits that will soon come into play.


Dodgy doings in industry funds

08 May 2014 |

DodgyA scandal about the activities of managers in an industry fund underlines the importance of good corporate governance. There are also lessons for self managed super fund trustees about their own conflicts.


Australian super fees too expensive

04 May 2014 |

 feesThe Australian superannuation system seems to be handing out too many rewards to the managers of the funds. But for those who want to run their own super, there is a need to pay strict attention to compliance.


 

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