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Firstlinks newsletter - 19 December

Graham Hand  |  19 Dec 2019Text size  Decrease  Increase  |  
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Morningstar acquired Cuffelinks (Firstlinks) in October 2019. Join 60,000 unique users and receive the Firstlinks weekly editorials and free investment ebooks.

If there were ever a time to offer a 20/20 vision about the future course of markets, a few days out from 2020 would be it. While we are happy to publish the views of others, here at Firstlinks, we don't profess to have a crystal ball. When major geopolitical risks rest in the hands of Donald Trump, Boris Johnson, Kim Jong-un and Xi Jinping, with the potential of a midnight tweet to cause a market meltdown, predictions are fraught. It's better to set up a portfolio according to your goals and risk appetite, and stick to a long-term plan.

It's been a tough year for financial advisers, most of whom are providing as good a service as other professionals in difficult circumstances. Adding to their woes, the new Code of Ethics comes into effect in two weeks, on 1 January 2020, and it's an onerous regime. We show the major confusion and impact on the Listed Investment Trust (LIT) and Listed Investment Company (LIC) market which holds $52 billion across 114 issues. Where is it headed in 2020? Peter Rae also reviews this sector for 2019 with the winners and losers. The following chart from the ASX Report shows the parlous state of some LICs, with around 80% of issues trading at a discount to Net Tangible Asset values.

LICs premium/discount to NTA

All investors are subject to personal biases, and Joe Magyer reports on recent research which debunks some of the more common beliefs. Where do you sit on these findings?

Roger Montgomery explains the impact of the timing of returns on retirement outcomes, and makes the case for a type of fund that trades off some of the upside to protect the downside.

Property funds have generally delivered strong results in 2019, with some exceptions in the retail sector. Adrian Harrington reports on a new development where companies are making better use of capital by selling property on 'sale and leaseback', and it's creating attractive investment opportunities.

We rarely cover the more sophisticated trading techniques used by technical analysts and chartists, but Kim Cramer Larsson describes four tools which show how some people study the market.

In our Weekend Edition (which does not go to our entire audience), we published new research on spending in retirement aimed at encouraging a better lifestyle rather than only capital protection.

In this week's White Paper, Perpetual provides background to better understanding fixed interest markets, especially important now more retail investors are turning to this sector.

With the acquisition of Firstlinks by Morningstar in October 2019, it has been a big year for the newsletter. We now have more resources to grow our services for you over 2020, and we're excited by the opportunities ahead. This is our last normal edition for the year, and over the next few weeks, we will publish a free ebook, and Chris Cuffe will select some of his favourite articles for holiday reading.

We wish our readers and sponsors a wonderful Christmas, thanks for your support, and we look forward to sharing more ideas to help your investment journey in 2020.

is the editorial director of Morningstar Australia

© 2020 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782. The article is current as at date of publication.

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