Are shares expensive? Key points Starting point valuations for shares matter a lot in terms of medium-term return potential and vulnerability to share market falls. Basically, the cheaper the better. Developed market shares are not dirt cheap (and haven’t been for several years) but on most measures they are not at overvalued extremes. US shares are most at risk, but other markets are reasonable. Introduction Some commentators claim shares are way overvalued and so …
Pocket money? There’s an app for that Can technology be a friend to busy parents and teachers looking to educate kids about finances in the invisible money age? We speak to Spriggy co-founder Mario Hasanakos about the pocket money app that’s turning an old-school family tradition into an essential teaching tool for kids and parents. As digital natives likely to spend more time online than watching TV, kids learn a lot from their devices. They’re …
Consumer confidence and interest rates Investors are looking for a sense of where interest rates are heading around the world. Consumer confidence is one of the best guides. Consumer spending is a key driver of between 50% and 70% of economic activity in developed economies like the US and Australia. How consumers feel is critically important to economic growth and the outlook for monetary policy. So what is consumer confidence telling us now? Americans …
The impact of short-termism on markets Humans are hard-wired to focus on the short term. We all have a tendency to react to immediate risks as a result of the ‘fight or flight’ syndrome inherited by our ancestors thousands of years ago. Our human biases have been exacerbated in more recent times by the need to react more quickly to the data that is provided almost continuously by the barrage of daily ‘news’, the exponential …
How much is really needed in retirement? In the UK in 2014, The Independent Review of Retirement Income (IRRI) was commissioned to look at retirement incomes. Two recommendations from IRRI were: The use of deterministic projections of the returns on products should be banned. They should be replaced with stochastic projections that take into account important real-world issues, such as sequence-of-returns risk (and) inflation. Quite a bit to digest. There is a broader discussion of …
One income or two? Living on just one income can be a challenge whatever the circumstances. For singles and couples, with or without children, budgeting for all your household expenses is easier when you take steps to manage your money in a different way. Juggling work, family and finances When a family of two becomes three, it’s usually the case that one partner is going to drop their income, for a while at least. And …
Weekly Market Update 19 October 2018 Investment markets and key developments over the past week While share markets had a great bounce from oversold levels early in the last week they fell back to varying degrees as worries around US interest rates, the US trade conflict with China, tech stocks and Italy’s budget deficit continued along with escalating tensions with Saudi Arabia regarding a missing journalist. This left share markets mixed with …
Here’s how to lead a happier life From our beaches and outdoor lifestyle to our democracy and cultural diversity, there a lot to feel happy about in Australia. However, living a happy life doesn’t always come easy. Concerns about money, relationships and the future can often stand in the way of living the life you want. The good news is there are ways to take charge of your happiness. Measuring happiness It may sound simple …
Boom turns to bust – falling Australian home prices. How far and for how long and what’s the impact on the economy? Key points Property prices in Sydney and Melbourne are likely to see top to bottom falls of around 20% as credit conditions tighten, supply rises and a negative feedback loop from falling prices risks developing. Other cities will perform better having not seen the boom of the last few years. Property …
Why investors should go back to basics in a low-return world Investors can be forgiven for wondering how they are going to continue to make money in financial markets. Cash rates globally are low and are likely to remain so, especially in Australia. This article looks at a ‘back to basics’ investment strategy suitable for a low-growth environment. The US Federal Reserve has been hiking cash rates. But despite talk of a post-QE (quantitative easing) …
