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Monday, March 31 2008

In the latest edition of Alan Kohler's Eureka Report, Scott has added some commentary to Alan's article - Opes: Leveraged investors be warned.

In his comments, Scott explains the term prime broker and explains how the structure of Opes' relationships with its lenders and the clients whom have invested with them has lead to significant potential losses for clients.

Click on the following link to read Scott's article - Opes: Leveraged investors be warned - Eureka Report insert.

Posted by: AT 03:16 am   |  Permalink   |  Email
Monday, March 31 2008

These days lawyers apparently don't chase you in your ambulance.  They chase you through google.  The following was a paid add on google - 1 day after the collapse of Opes Prime was confirmed:

OPES PRIME CLAIMS
Have you been ruined by Opes Prime?
to join class claim call 0425834000
members.liv.asn.au/

The Opes Prime collapse is a terrible collapse, and will negatively impact some good people.  If lawyers can help them recover some funds, then that would be great.  Otherwise, they need some sound financial advice on the benefits of being content to invest regularly over time, keep costs low and build a sound long term investment plan.

Cheers

Scott

Posted by: Scott Francis AT 12:58 am   |  Permalink   |  Email
Monday, March 31 2008

The biggest story in financial markets today is the collapse of Opes Prime, a broking house with more than 1,000 clients.

Opes Prime was a 'prime broking house'.  In short this meant that it was more aggressive than a retail broker, with a focus on stock lending and borrowing to invest.

Unfortunately for the clients of Opes, their stocks actually secured some of the overall loans that Opes used.  So, with the collapse of Opes, their portfolios were put in the hands of the banks (ANZ and Merril Lynch) to sell shares to be repaid.  The clients were effectively unsecured creditors in the whole process - and now wait to see what money they will recover.

All this brings to a head the importance of being careful when you borrow to invest.  It is a risky strategy - sure it is great when asset prices are heading north.  However, when they head south it can get very ugly.  You might end up like the Opes clients - forced sellers of assets in a downward market.  This is not a pretty situation at all!

At the end of the day the simple, steady approach is pretty bulletproof.  Spend less than you earn.  Invest regularly in growth assets.  Keep short term cash needs in a cash account.  Be well diversified.  Keep costs low.

Regards,

Scott

Posted by: Scott Francis AT 12:50 am   |  Permalink   |  Email
Wednesday, March 26 2008

In his latest article written for Alan Kohler's Eureka Report, Scott looks at the Dogs of the Dow approach to building an investment portfolio.

He comments that the strategy is built on the notion of "value" stocks; the idea that there might be a higher return for value or "out of favour" companies.  Scott discusses some academic research that looks at this concept of a value premium and suggests that the research provides evidence of such a phenomenon.

Scott concludes by commenting that investing in this manner is not a free lunch as there are periods where these stocks underperform and tend to have more volatile in their price movements.  He also looks at how one fund manager, Clime Capital, constructs a fund using the dogs of the dow strategy and some of the issues surrounding this fund.

Click on the following link to read Scott's article - Can market 'dogs' outrun the rest?

Posted by: AT 10:13 pm   |  Permalink   |  Email
Wednesday, March 26 2008

Channel 9's Brisbane Extra presented a segment on Equity Finance Mortgages during their Wednesday program.  Scott Francis was interviewed for the program to provide some brief analysis of these style of mortgage products.

For a copy of the transcript of the program please click on the following link to the Nine's Brisbane Extra website - Mortgage Option.

Posted by: AT 05:13 pm   |  Permalink   |  Email
Monday, March 24 2008

The latest edition of our fortnightly email newsletter has been sent to subscribers.  If you would like to be added to the mailing list please click the following link to be taken to the sign up page - The Financial Fortnight That Was Sign Up Page.

The financial topic discussed this fortnight was the level of investments needed in retirement.  The latest edition also contained the following Market Update:

Market News

 

Market Indices

Since our previous edition, Australian and global sharemarkets have continued to experience downward movement.  The S&P ASX200 Index has fallen 2.59% from the 7th to the 21st of March.  It is now down 12.53% from the same time last year and down 19.12% for the calendar year (2008) so far.  The S&P Global 1200, a measure of the global market, has fallen 0.28% over the same period.  The index is down 6.03% from the same time last year and down 11.20% for the calendar year so far.

 

Emerging markets have also experienced negative movement with the MSCI Emerging Markets Index falling 4.69% since the 7th of March.  It is still up 10.92% from the same time last year but down 15.13% for the calendar year so far.

 

On the other hand, Property trusts have experienced positive movements since the 7th of March with the S&P ASX 200 Property Trust Index rising by 2.61%.  However, the index is down 31.60% from the same time last year and also down 23.65% for the calendar year so far..  The S&P/Citigroup Global Real Estate Investment Trust (REIT) Index, a measure of the global property market, has risen 4.57% over the same period.  It is down 23.79% from the same time last year and down 5.47% for the calendar year so far.

 

Exchange Rates

As of 4pm the 20th March, the value of the Australian dollar had fallen since the 7th of March with the Aussie dollar down 1.45% against the US Dollar at .9154.   It is up 14.11% from the same time last year and up 3.83% for the calendar year so far.  Since March 7th the Aussie has fallen 1.99% against the Trade Weighted Index now at 68.9.  This puts it up by 5.19% since the same time last year and up only 0.29% for the calendar year so far.  (The Trade Weighted Index measures The Australian dollar against a basket of foreign currencies.)

 

General News

Since our last edition the Australian Bureau of Statistics has released the latest employment with Australia's unemployment rate falling to 4.0% for February 2008.  The ABS has also released the latest population estimates suggesting that the population had grown by 1.5% for the year ended 30th September 2007.

Posted by: Scott Keefer AT 10:00 pm   |  Permalink   |  Email
Monday, March 24 2008

Saturday's Australian included an article from Geoffrey Newman, 'Seeing red - retirees have a lot at stake when the stock exchange takes a tumble'.  There is no doubting the assertion contained in the headline.  As retirees move from relying on personal income earning activities such as work and small business ownership to a more passive approach of income earning through investments.  For most retirees, to achieve the income levels they require (after taking out the effect of inflation) will involve investing in volatile asset classes such as stock markets.

 

But how much should a retiree have invested this way and what is the real impact on their investments if stock markets fall?

 

The article written by Newman quotes Hans Kunnen, head of investment research at Colonial First State.  Kunnen suggests that most good financial advisers should be putting two to three years of income in cash and the rest in growth assets.  We disagree slightly with Kunnen and suggest that at least four years is a more realistic allocation to non-volatile assets such as cash and fixed interest securities.  Here's why.

 

As a minimum, investors should be looking to protect against having to sell volatile shares for a period of 7 years.  This does not totally count out having to sell down volatile assets after a long period of downward movement, there have been bear markets for longer than 7 years, but the risk of having to do so is significantly reduced.

 

By holding four years of income in non-volatile assets, you are able to draw down on these assets plus have these assets added to through income from investment returns.  At present levels, cash interest is running at approximately 7%, fixed income 7.5%, Australian share dividends 4.1% plus 1.4% franking credits i.e. 5.5% in total, international share dividends of 3% and listed property distributions of 7.3%.

 

Similar income returns going forward should see non-volatile assets last for at least 7 years before needing to contemplate the possibility of selling down volatile assets during a bear market.

 

Therefore, our approach at A Clear Direction is to focus on income planning with our clients.  The key question we ask is how much income a retiree will require in retirement.  From this point we then determine what allocation of assets will be required to produce this amount of income without needing to sell volatile assets such as Australian shares, property (direct or through listed property trusts) or international shares.  In particular how much of the portfolio should be held in cash and fixed interest securities.

 

Through this process of determining asset allocations when establishing and maintaining an investment portfolio, investors, especially retirees, will be putting in place a strategy to be able to ride out bear markets without actually realising any capital losses by selling volatile investments at the worst possible time.  The paper value of their investments will fall but paper values don't matter until they become realised through changing non-cash items into cash.  Based on historical evidence, volatile assets will bounce back in value and restore, and then improve their value.

 

This approach does not make investors immune from the emotions caused by rough times like we are experiencing now, but it sure helps them sleep a bit easier at night.

 

Regards,

Scott Keefer

Posted by: Scott Keefer AT 06:12 pm   |  Permalink   |  Email
Sunday, March 23 2008

In the Money section of today's Courier Mail Scott Francis has contributed an article looking at the alternative of receiving dividend payments or reinvesting them through a company's dividend reinvestment scheme.  Scott outlines the pros and cons of each option and concludes that the decision should come down to whether an investor would buy the relevant share in whatever the current market condition is that prevails.  If the answer is no, than you would be better off taking the dividend as cash and investing the money in another way.

To read the full article please click on the following link - Grab hold of the dividend or reinvest?

Posted by: AT 09:34 pm   |  Permalink   |  Email
Sunday, March 23 2008

The financial media is a beast that we all need to be careful in applying to our investment decisions.  In any given newspaper, magazine or website there is a good chance that there will be a range of interpretations of the current market activity and forecasts about what is going to happen in the future.  These types of stories help financial media "sell" their story to actively minded investors seeking hints as to their next big investment decision.  However we forget that the basic instinct of the financial press is to sell the advertising space that surrounds their coverage.  Do they actually believe in what they are writing?  Are they investing their own money in light of their own commentary?  Your guess is as good as mine.

 

What we do know is that we need to keep the intentions of the financial media in mind and take care in how we interpret their commentary.  Our approach is to look to the analysis that focuses on the fundamentals of how investment markets work rather than sources trying to provide "guesswork" and crystal ball forecasts.

 

An article published in Saturday's Sydney Morning Herald written by Annette Sampson highlights what we see as a fundamental of investment markets - behavioural finance.  Behavioural finance is the study of the behaviours of investors and why they invest in the manner in which they do.  Annette's article, 'Investors behaving badly are to blame for this market mayhem', looks at the phenomenon of investors trying to pick market turning points.

 

She leads with the famous quote from Kenneth Gailbraith:

 

"We have two classes of forecasters: those who don't know . and those who don't know they don't know."

 

The article suggests that even though it is futile to try to pick the top of bull markets and the bottom of bear markets, the nature of humans (our hard wiring) makes us overconfident

 

"overconfidence leads us to believe we have much more control over our investments than we do, and it makes us emotionally invested and less able to cope when those brilliant profits start to evaporate. We take the losses personally and believe we should have been able to prevent them."

 

The article hints that the few examples where forecasters get it right, this skill is not shown to be repeated in the future suggesting the correct prediction was purely a matter of luck.

 

The conclusion of the article is that investors should focus on the long-term and take a big picture viewpoint.  This takes out the more emotional short term decision making.  A final quote from the article sums the story up in a nutshell:

 

"Behavioural finance says we're more inclined to react emotionally than rationally when making investment decisions. We're hardwired to hate losing money, assume the past is a guide to the future, and think we're more in control than we are. There will always be people who think they can time the market, but the odds are that they, too, will get it wrong."

Posted by: Scott Keefer AT 08:53 am   |  Permalink   |  Email
Tuesday, March 18 2008

Over the past few weeks Scott and I have been conducting client seminars talking to our clients about the current market volatility and how we see the investment world in this context.  A large part of our presentation was reminding clients about the importance of the income produced by investments.

 

This point was nicely reiterated in today's Australian Wealth lift out through an article written by Tony Negline.  Tony suggests that most investors focus too much on the movement of the capital value of shares and not enough on income.  In our presentation we likened this distinction to the difference between a speculator and an investor.  Speculators aim to benefit from price movements (changes in capital value) compared to investors who aim to benefit from earnings over time (income).  Some other distinctions between investors and speculators are outlined below:

 

 

Investor

Speculator

Tax and Costs

More tax and cost effective

Less tax and cost effective

Timeframe

Long Term

Short Term

Downside Risk

Generally contained to market falls - 35%

Possible great losses of capital (eg because of use of borrowing)

Success (Chris Leithner, Intelligent Australian Investor)

More Likely to be Successful

Less Likely to be Successful

 

To show the importance of income, Tony looked at two hypothetical investments of $100,000 invested in March 1982.  Over the next 26 years until this month the capital value of a $100,000 investment in the ASX200 would have been worth $1.1 million by early March 2008.  Over that time it would have created $530,000 of dividend payments (before considering franking credits).  The average income has been about 4% a year before franking.

 

On the other hand, a sum of $100,000 invested in 12-month term deposits for the same period would have received $200,000 in income and would have a capital value of $100,000 based on average income of 8% a year.

 

Not surprisingly, shares have provided a better total return over the 26 year period, but have also provided greater levels of income due to the growing income stream that is created.

 

It should also be noted that we are especially fortunate in Australia that there is a culture of income provision to shareholders by listed companies, in a large part thanks to our imputation (franking credit) tax system applied to dividend payments.

 

This discussion points to the need for investors to focus on income planning as a strategy for determining asset allocations and investments within their portfolios.  Income allows investors to receive some value from their investments without the need to sell assets.  Making sure they have enough income being produced from cash, fixed interest and shares is crucial to ensure that they can ride out particularly difficult periods on equity markets and not be forced to sell when prices are low.

 

Regards,

Scott Keefer

Posted by: Scott Keefer AT 09:38 pm   |  Permalink   |  Email
Tuesday, March 18 2008

Minister for Families and Community Services Jenny Macklin announced on Saturday the new deeming rates for social security recipients.

Deeming is a calculation that is used to generate an estimate of income earned on the financial assets of a person, and is used in the calculation of the age pension assets test.

For example, let us consider a single age pensioner with $100,000 in a bank account. The new deeming rules say that the first $39,400 is deemed to earn 4% and the remainder 6%. Therefore, for income test purposes, the single age pensioner would be deemed to have earned $5,212.

Here is the important part. It does not actually matter if that person earns more than the $5,212. For the income test purposes, they are only deemed to earn $5,212.

In fact, an article on the website of the Department of Families, Community Services and Indigenous Affairs, says: "Deeming also encourages people to consider earning better returns on their investments. Prior to the introduction of deeming, many income support recipients elected to receive little or no income from their savings."

The whole point of deeming is that it provides a simple assessment of income, and then encourages people to seek higher investment returns without having to worry about being penalised under the Centrelink income test.

To find out more about deeming take a look at Scott Francis' Eureka Report acrticle - Deeming: don't be short changed published in August.  NB - The deeming rates quoted in the article are not the new rates.

Regards,
Scott Keefer

Posted by: Scott Keefer AT 04:14 am   |  Permalink   |  Email
Monday, March 17 2008

The ASX publish a monthly Investor Update newsletter.  In February's edition they have published an edited extract from Scott Francis' latest book - High Income Investing - How to be Relaxed and Comfortable. In the extract Scott explains how listed interest rate securities with investment grade credit ratings can provide a low cost and liquid way to get fixed income exposure for an investment portfolio.

Click the following link to be taken to the extract on the ASX website - Steady income in unsteady times.

Posted by: AT 03:13 am   |  Permalink   |  Email
Sunday, March 16 2008

Today's Courier Mail included an interesting article within the Money section entitled - 'Uninformed risk losing super savings'.

 

The article, written by Jason Bryce highlights the risks involved with running your own self managed super fund (SMSF).  It focuses on research showing large numbers of SMSF trustees unaware of their obligations and unable to explain important SMSF concepts such as the sole purpose test, investment strategy and restrictions on types of assets that can be acquired from related parties (in-house assets).

 

The statistic in the article that drew our attention most was the average cost of administering a super fund.  For a fund balance of $200,000, the cost of administration was in the range of 2.63% to 3.55% of assets under management for a SMSF.  To put this in perspective, the cost of administering a superannuation portfolio we would recommend for an average client with $200,000 in assets would be 1.32% ( the cost).  For this a client would receive administration service, investment management and ongoing financial and investment advice without taking on the extra burden of trustee responsibility.

 

Self Managed Superannuation Funds are relevant for some but today's article points out that people need to be very careful and seek professional advice before taking this step.

 

Regards,

Scott Keefer

Posted by: Scott Keefer AT 11:06 pm   |  Permalink   |  Email
Thursday, March 13 2008

Yesterday we posted out a quick note to clients.  One of the matters covered in the note was the performance of 5 investor favourite companies - the big 4 banks and Telstra.  We thought that readers of our blog may also be interested in the analysis so here it is.

 

Amongst the most broadly held companies are the 'big 4' banks and Telstra; Telstra because of their 3 floats and the big 4 banks because of their reputation as reliable, dividend paying companies.

 

However, recent returns from all 5 of these companies have been poor.  Over the past 5 years all 5 of these typical 'investors friends' have underperformed the market.  The following link to a graph of all of these widely held companies compared against the index return - 5 Year Price Movement Chart - 4 Banks & Telstra.  The red line that finishes on top of the others is the return from the index.  The other returns are colour coded.  This only looks at the price movements of the companies and the overall index.  It is true that all five of the companies would have paid dividends slightly higher than the market average, although over 5 years this would have been a difference of only 5% or so - still leaving the companies underperforming the overall market.  (the closest company to the average market return is Commonwealth Bank - lagging by about 30% over the 5 year).

 

The reason for this underperformance is pretty simply - BHP.  It is the largest company in the index and has returned more than twice the return of the average market.  Being the largest company in the index it has pushed overall market returns along (together with other resource stocks such as Rio Tinto).

Posted by: AT 09:56 pm   |  Permalink   |  Email
Thursday, March 13 2008

My apologies for the rather brash heading but I hope that it will get some attention.  With the current volatility and consequential nervousness in financial markets, now is an opportunity to see who is 'swimming naked' in the investment world.  The stress in a number of Australian listed entities would clearly show this -  ABC, Allco, Centro, City Pacific & MFS to name a few.  If you had heavy exposures to these companies the market downturn will look all the more depressing.  These companies are clearly in trouble and have not provided good value for share holders.

 

Similarly, the performance of managed funds are also more clearly in the spotlight at present.  The past 5 or more years of stella performance on the Australian share market has most probably created a level of complacency amongst the average retail investor.  Getting regular double digit returns leaves an investor pretty happy with life and not so likely to look around to compare performance.  Now that we have moved into "red territory" that complacency is being given a jolt.

 

This comparison might at first seem difficult as many of the big name managed funds are what we like to refer to as index huggers.  They have so many funds under advice that they almost are forced to invest in the same proportions as the index.  Therefore their performance is very similar.  However, the fees of managed funds are a clear method of discerning between funds.

 

In negative territory, the impact of fees becomes much clearer.  Rather than taking the cap of excellent returns to provide pretty good returns for investors, fees, during periods of negative performance, work to push performance further into the red.

 

An article written by John Collett in Wednesday's SMH highlights the importance of fees.  It provides a comparison of a fund with a 2% fee level to one with a 0.75% fee.  Assuming similar returns of 8% p.a. and starting with an initial investment of $50,000, the difference in end value would be $10,841 over 10 years, or 22% of the initial investment.  I know which option I would prefer.

 

So what should an investor be looking for?

 

  • Investors should be looking for a good quality investment approach, with low costs. (including trading costs and tax consequences)  Sounds simple but is not necessarily the case.  This is where a good financial advisor earns her or his keep.  They should be recommending such funds.  That's why it is important to try to find an advisor who is independent and is not recommending products based on the commission he will receive back!!


  • Some might say, that if you are going to switch investments, now might be an ideal time with capital gains tax payable not as significant given the recent fall in values.  A word of caution - care has to be taken that you are not "out of the market" for long in case the market turns strongly upward.  Again, a financial adviser worth their salt will ensure that this is what happens.

Regards,

Scott Keefer

Posted by: Scott Keefer AT 06:41 pm   |  Permalink   |  Email
Tuesday, March 11 2008

The latest edition of our fortnightly email newsletter has been sent to subscribers.  If you would like to be added to the mailing list please click the following link to be taken to the sign up page - The Financial Fortnight That Was Sign Up Page.

The financial topic discussed this fortnight was the use of fixed interest in portfolios.  The latest edition also contained the following Market Update:

Market News

 

Market Indices

Since our previous edition, Australian and global sharemarkets have continued to experience downward movement.  The S&P ASX200 Index has fallen 5.32% from the 22nd of February to the 7th March.  It is down 9.64% from the same time last year and down 16.97% for the calendar year (2008) so far.  The S&P Global 1200, a measure of the global market, has fallen 2.64% over the same period.  The index is down 2.90% from the same time last year and down 10.95% for the calendar year so far.

 

Emerging markets have also experienced negative movement with the MSCI Emerging Markets Index falling 3.22% since the 22nd of February.  It is up 21.15% from the same time last year but down 10.96% for the calendar year so far.

 

Property trusts have not been immune from negative movements since the 22nd of February with the S&P ASX 200 Property Trust Index falling by 9.00%.  The index is down 35.10% from the same time last year and also down 25.59% for the calendar year so far.  The S&P/Citigroup Global Real Estate Investment Trust (REIT) Index, a measure of the global property market, on the other hand has fallen 4.00% over the same period.  It is down 24.86% from the same time last year and down 9.60% for the calendar year so far.

 

Exchange Rates

As of 4pm the 7th March, the value of the Australian dollar had risen since the 22nd February with the Aussie dollar up 0.93% against the US Dollar at .9289.   It is up 19.50% from the same time last year and up 5.37% for the calendar year so far.  Since February 22nd the Aussie has fallen 0.57% against the Trade Weighted Index now at 70.3.  This puts it up by 10.19% since the same time last year and up 2.33% for the calendar year so far.  (The Trade Weighted Index measures The Australian dollar against a basket of foreign currencies.)

 

General News

Since our last edition the board of the Reserve bank of Australia lifted the official target for its cash rate to 7.25%.  The change was made in order to 'contain and reduce inflation over the medium term'.

 

The Australian Bureau of Statistics has also released the latest national accounts data with Australia's economy growing 0.6% in the December quarter 2007 leaving the annualised rate at 3.9%.

Posted by: Scott Keefer AT 07:51 pm   |  Permalink   |  Email
Monday, March 10 2008

Last week City Pacific froze redemptions from a billion dollar fund and the company is blaming the media for much of its plight.  On ABC's Inside Business program, broadcast on Sunday morning, Scott Francis was interviewed by reporter Kathy Swan for his take on the plight of City Pacific.

To take a look at the transcript of the segment or view the video clip please click on the following links:

Transcript of City Pacific blames media for financial plight

Video clip of City Pacific blames media for financial plight

Back in April last year, Scott wrote a Eureka Report article outlining some of the risks involved with investing with City Pacific and other similar entities - High yields: A review of companies in the Fincorp space.  In the article Scott wrote:

In 2005, ASIC challenged the claims that City Pacific had made about investors' ability to withdraw money. City Pacific had described accounts as being "at call", whereas they actually required a 90-day redemption period and were never "at call" as represented.

City Pacific has moved on since that intervention by the regulatory authorities. The company's current prospectus reveals a string of factors that have been central to the problems eventually faced by high-yield companies in the recent past.

Related Party Loans. The prospectus shows that 19% of the fund assets are loaned to related parties. This, in my mind, is a significant conflict of interest. How can you say to investors that you are getting them a fair rate of interest when you are lending to related parties?

Fees. City Pacific is able to charge fees of up to 3.65% of the gross assets of the mortgage trust. This is potentially twice the fee of the average managed fund, and I would argue that their fees are too high.

Capitalisation of Interest. This has been a significant problem in the high-yield sector. Interest is not paid back on the loan but capitalised (added back to the loan). City Pacific has 90% of the loans where interest is capitalised (page 9 of the PDS). Most City Pacific loans are medium-term - up to 18 months - which mitigates some of this risk.

Higher Ranking Lenders. City Pacific has an arrangement with a bank to borrow funds on behalf of the mortgage trust. This bank has a higher claim on the assets and income of the trust than the mortgage investors (page 8 of PDS).

Lending for Property Construction. It is one thing to lend money against an existing property with a reasonably well known value and rental income. It is entirely a different thing to lend money against a property that has yet to be constructed, with the cost risk of both building the property and then the marketing risks of selling it or renting it. More than 70% of City Pacific's lending is for property construction or development (page 9 of PDS).

City Pacific has not had trouble from ASIC since the intervention two years ago.

Click on the following link if you would like to read the full article - High yields: A review of companies in the Fincorp space.

Posted by: AT 06:42 pm   |  Permalink   |  Email
Monday, March 10 2008

On the 28th of February I wrote a small blog referring to Ross Gitten's article - No crystal ball for investors.  Unfortunately there was a problem with the link.  We really think Ross' article is well worth reading so have updated the link to the appropriate web page.  Click the following link to be taken to this page - No crystal ball for investors.

Apologies for any problems this may have caused.

Regards,
Scott Keefer

Posted by: Scott Keefer AT 06:32 pm   |  Permalink   |  Email
Monday, March 10 2008

A few weeks back, Scott Francis looked at the pros and cons of utilising a dividend reinvestment plan.  In his latest Article written for Alan Kohler's Eureka Report, Scott looks at the distributions from managed funds and asks whether investors should be reinvesting these distributions.

He comments that the issue of managed fund re-investments plans is much more vexed because there are some serious tax inefficiencies built into managed funds.

In automatically reinvesting your managed fund distributions - especially at the wrong time of the year - you can pay heavily for the apparent ease of the reinvestment facility.

Click on the following link to read Scott's article - When it pays to reinvest

Posted by: AT 03:02 am   |  Permalink   |  Email
Saturday, March 08 2008

Earlier this week, Warrent Buffett produced is much anticipated annual letter to shareholders of Berkshire Hathaway.  Scott Francis has analysed Buffett's comments and identified some interesting points for investors.  Click on the following link to be taken to Scott's analysis - Buffett's Sobering Lesson.

Posted by: AT 05:26 am   |  Permalink   |  Email
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