Investing 101

Investors today have no shortage of worries to keep them up at night. According to AMP’s chief economist, it’s an ideal time to revisit some crucial investment principles that can help protect capital and provide peace of mind.

The ASX 200 fell 3.8 per cent over the month, the biggest fall this year, as investors sought to understand the impact of war, economic factors and other concerns on markets at home and abroad, according to Selfwealth.

The Australian Shareholders’ Association and the Australian Investors Association have agreed to amalgamate in the new year, seeking to grow their membership and influence as a unified leader in advocacy and education.

Morningstar head of equity research Peter Warnes recently laid out a bleak take on the chances of a recession, along with simple rules for investors to follow in the coming economic and market confusion. Simplicity and risk control will be key, as will harnessing sustainable tailwinds.

Whether an investment is expensive or cheap is a key and often overlooked driver of future returns, explains AMP’s Shane Oliver. At the moment, starting points signal a brighter medium-term outlook for some asset classes than for others.

Derivatives should not be a “dirty word” for investors looking for better returns, capital protection and diversification at a time when volatility and higher inflation appear here to stay, according to Atlantic House Group’s Andrew Lakeman and Global X’s Evan Metcalf.

Australian companies’ dividend payouts are down 24 per cent from a year ago, as higher interest rates and cash flow challenges darken the outlook. Payouts from miners decreased significantly, although the dividend picture remains positive for banks.

NYU finance professor Aswath Damodaran recently looked at the apparent disconnect between blockbuster sport franchise prices and earnings fundamentals, in an examination of how assets reach “trophy” status and what it means for determining their value.

Shares of the in-demand chip maker hit an all-time high of US$502 on the back of a strong profit report, and analysts say it could be set for more gains, despite rising US bond yields complicating the outlook for equities and especially tech stocks.

Recently released wages data increased the likelihood the RBA will pause its rate hiking campaign for the near term, economists say. Meanwhile, an increase in full-time employment, and the wages they earn for it, has helped narrow Australia’s gender wages gap to its lowest-ever level.

These long-term managed investments allow for tax-free withdrawals after 10 years and, unlike with superannuation, there is no limit on the initial investment. And they’re more than just a tax play.

As an ever-more-connected world makes it harder to deliver uncorrelated portfolios, there are still strategies investors can use to add diversification. Industry leaders recently discussed opportunities in equities and fixed income at The Inside Network’s inaugural Investment Leaders Forum in Queenstown, New Zealand.