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Financial Happenings Blog
Tuesday, December 15 2009

Last week ASIC launched their latest publication in the fight to educate investors against making significant financial mistakes.  The booklet is titled "Investing Between the Flags" and is referred to by ASIC as a free practical guide to investing for retail investors.

The guide is available as a free download from ASIC's FIDO website.

The guide sets out six steps to investing between the flags:

    1. Understand some key things about yourself - think about your tolerance for risk and your goals and timeframes;
    2. Understand some key things about investments - understand how different types of investments work, only invest in what you understand, be clear on the trade off between risk and return (e.g. the higher the rewards, the higher the risk);
    3. Develop an investment plan - don't put all your eggs in one basket, spread your investments between different asset classes, managers and sectors so that you don't risk losing everything if an investment fails;
    4. Decide how to invest - when it comes to investing, decide whether to take a - 'do-it-yourself' approach or get a professional to do it for you;
    5. Implement the plan - do your homework, paying close attention to paperwork such as Statements of Advice and Product Disclosure Statements; and
    6. Monitor your investments - rather than just adopting an 'invest and forget' approach, keep track of your investments over time.

A must read for those new to the investing game or as a refresher for the hardened investor.


Posted by: AT 11:35 pm   |  Permalink   |  Email
Friday, December 11 2009

Scanning through the financial media today I cam across an article published in the AGE on the 9th by John Collett.  In the article Mr Collett outlines the 10 biggest things the global financial crisis has reminded investors.  I think he is right on the money.  The 10 items were:

1. There is no substitute for cash.

2. Simplicity should be favoured over complexity.

3. Nothing's guaranteed. Avoid capital-guaranteed products as they are hardly ever worth the cost of the capital guarantee.

4. Don't invest for tax.

5. Be ruthless on costs.

6. Don't put all of your eggs in the one basket.

7. Put yourself in the driver's seat. Pay fees rather than commissions to advisers.

8. Always ask for a discount.

9. Prefer listed investments to non-listed investments.

10. Don't be a guinea pig.

The article is well worth a read - Lessons from the GFC

Posted by: AT 08:41 am   |  Permalink   |  Email
Wednesday, December 09 2009
Scott Francis' latest Eureka Report article looks at some of the tips and traps with value investing.

Please click on the following link to be taken to the article - Value the sector not the stock
Posted by: AT 03:53 am   |  Permalink   |  Email
Wednesday, December 09 2009

Scott Francis has recently published an article in the Eureka Report looking at the implications for investors from the proposed AMP & AXA merger.

Scott highlights the failings of the large actively managed funds including closet indexing, chronic underperformance and a cavalier approach to tax liabilities.

Please click on the following link to be taken to the article -
AMP + AXA = Bad for investors

Posted by: AT 03:44 am   |  Permalink   |  Email
Wednesday, December 09 2009

Scott Francis has recently published an article in the Eureka Report looking at the issue of who actually stands behind a financial adviser and the impact of this relationship on the independence of the advice that is being given.

The article focuses on a report from Roy Morgan Research.  A key finding of the report was that:

"more than 70% of superannuation recommendations by financial planners within the big six firms (AMP, ANZ, AXA, CBA, NAB and Westpac) went to fund managers "related" to the licensing of the financial planner."

Scott concludes with the following comment - The "structural corruption" of the financial services industry runs deeper than just commissions. There remains an issue for consumers in understanding the level of independence around advice that they are given.

Please click on the following link to be taken to the article -
Who's behind your financial adviser?

Posted by: AT 03:20 am   |  Permalink   |  Email
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