Wealth Intelligence

  • May 6
    How commissions will once again line the pockets of the bad and the ugly.

    It is with some sadness that I return to the thorny matter of commissions in the financial services industry.

    The sadness is because I had thought that this corrupt practice had been ended.

    But for reasons that are, at the best, spurious and, at the least, unduly influenced, the current government wishes to re-allow commissions.

    I hope that by the time that this note is read, the position will be changed. But this is one outcome about which I am not optimistic. Read More
  • Nov 19
    ... the ‘disappearance of growth’

    With such low interest rates as currently exist, investors have understandably turned their attention to finding alternative sources of income to supplement their much reduced term deposit and interest income.

    To the extent that investors have been keen to move into higher yielding equities, the companies themselves have been keen to oblige and have themselves turned on the dividend taps to red hot.

    Consider this ... Read More
  • Nov 19
    The risks of just one egg-filled basket

    One of the great attractions of SMSFs is that they allow the trustees/ members great investment freedom.

    However, often this freedom leads to poor investment decisions.

    There has recently been considerable media coverage about SMSFs borrowing to invest in property. The concern is the effect on property prices, especially apartments and how this might keep owner-occupiers out of the market.

    ASIC is also expressing its concerns, especially about the inducements being offered to investors.

    Both miss the key investment risk.

    What’s happening? Read More
  • May 6
    The property spruikers cry, “they’re not making any more land.” Or, “you can’t go wrong with bricks and mortar.”

    Investing in residential property has always been attractive to some investors. The emotional comfort of being able to see their investment overwhelms a clinical analysis of the net long-term investment return that residential property provides.

    First Hand irregularly analyses residential property investment, listing all of the costs (rates, land tax, maintenance, agent’s rental commission, agent’s selling commission, other selling expenses, etc) and the revenue (rental income). The net rental income yield tends to fall in the range of 2.5%-3.5% p.a. Read More
  • Jun 7
    This year’s Federal Budget contained two disappointing changes to concessional (pre-tax or tax deductible) superannuation contributions.

    However, the other benefits of super still make it the most favourable investment vehicle.

    But to maximise the benefits of super, you now need to take even more advice than before (which is included as part of First Samuel’s integrated service offering).

    Two major changes ... Read More
  • Mar 14
    One significant trend that stemmed directly from the GFC was a move by investors (particularly committee driven ones) towards “index” investing*.

    Is this daft investing?

    Index (or “passive”) investing is simply when you buy a bit of everything in the market proportional to each company’s size (the spaghetti-gun approach: throw a packet of spaghetti against the wall and hope some of it sticks).

    On the other hand, “active” investing is when you only buy what you choose from the market (only use the longest, moistest spaghetti to improve your odds). Read More
  • Nov 14
    The recent volatility of share market returns has led to some aggressive media advertising for “annuities”. The advertising seems to aim at scaring self funded retirees out of the share market.

    What is an annuity? Read More
  • Nov 14
    I have recently found myself being cautiously approached by people who want to commiserate with me about the share market and its poor outlook, in light of the “dismal equity climate”.

    Notwithstanding the strong relative performance we have enjoyed (i.e. First Samuel shares v ASX), the enthusiasm I express for shares in response to these comments continues to surprise my well-meaning condolers.

    However, I do appreciate that without the benefit of historical context, this must seem an almost euphoric-denial response to most.

    So, with this in mind, I felt it was important to provide some more information to better explain my enthusiasm. Read More