How do you prepare financially for a divorce?

Time to go -
 divorce
 
Divorce is an unpleasant topic and one most people avoid discussing. However it is a reality for many people and one that could leave you reeling financially if you’re not prepared. If you’re in the midst of a marriage breakdown understanding your financial position is vital but not widely understood.

To delve into this tricky subject I spoke to Cathryn Gross, who is a member of ASIC’s Financial Advisers Consultative Committee and the founder of Twelve Wealth, a boutique financial advice business committed to helping women achieve their goals in life.

Cathryn shares what you need to understand about your joint finances before getting married and the steps to take to prepare yourself financially in the event of a divorce.
(more…)

Read more »

Global ETFs surge ahead

ETF Update - Quarter 3, 2017
 
Our quarterly update on the Australian ETF market as at September 2017.

ETF market highlights

  • Quarterly growth for ETFs listed in Australia was 8.9%, from $29.3 billion at the end of June to $31.7 billion at the end of September 2017.
  • The total size of global share ETFs listed on the ASX overtook Australian share ETFs for the first time. Global share ETFs continue to be embraced by Australian investors for better diversification in their portfolios.
  • The latest report from S&P showed that 75% of Australian equity managers, 90% of Global share managers and 86% of Bond managers underperformed their respective benchmarks over the 10 years to 30 June 2017. This trend has continued to support evidence based investing using ETFs.

(more…)

Read more »

Property investment falls out of favour

Property - Melbourne
 
We launched Stockspot Themes in April 2016 and became the first digital investment adviser in the world to offer a range of curated investment options that clients could use to personalise their portfolio. We’ve developed sophisticated portfolio tracking and risk management software to enable us to manage this.

Stockspot Themes have given our clients access to 1,000 different portfolio combinations and allowed them to include a range of different markets and assets.

We’ve carefully selected 14 theme options from over 150 different ETFs available on the ASX. These ETFs complement our model portfolios and offer additional diversification benefits across markets, assets, sectors and personal preferences (like socially responsible investing). You can see our methodology for selecting the best ETFs in our annual ETF report.

We’ve seen great take-up of Stockspot Themes, particularly from our individual and SMSF clients that want to have more control over where they are invested.
(more…)

Read more »

Over 4,000 funds analysed in our 5th Fat Cat Funds Report

2017 Fat Cat Funds Report
 
For the past 5 years, Stockspot has been campaigning to raise awareness of the impact of Fat Cat Fund fees on everyday Australians.

This year, our Fat Cat Funds Report looked at a record 4,102 funds to assess how they have performed after fees since 2012. By shining a light on the Fat Cat Funds our aim is cause some changes either by funds reducing their fees, by encouraging consumers to consider their options, or by Government intervening to improve education, awareness and transparency.
(more…)

Read more »

How to manage opinions playing rugby and investing

Stirling Mortlock - rugby and managing money
 
Nobody can prepare you for becoming a professional athlete. Literally everything is put under a microscope from what goes into your body from a diet and hydration point of view to every single detail of the team’s and your own individual preparation each week.

The objective for everything that comes under this microscope is about constant improvement and how it ultimately benefits the team. This includes how you handle the media attention. For many players one of the hardest skills to develop (and one of the most crucial) is effectively interacting with reporters and how you manage the constant commentary (both positive and negative) from the media.
(more…)

Read more »

Investing your savings doesn’t need to be daunting

Investing doesn't have to be scary
 

Investing isn’t scary, but a lot of people think it is

Risky, time consuming and emotionally exhausting. Sounds like a bad relationship or like attempting Everest. Not what most people would like to associate with growing their savings.

Unfortunately, these are the feelings many Australians associate with investing. When asked why they are not interested in investing, most Australians cite lack of knowledge, disinterest and fear.

Many people still have memories of the global financial crisis and the effect that had on their own investments or those of family and friends.

These are all natural and very human feelings. Loss aversion or fear of the unknown is something that has helped us survive through history – it’s evolutionary. However that same fear holds us back when it comes to investing. We refuse to take a well calculated risk that could immensely benefit and enrich our lives because we are fearful of losing money.

If this sounds familiar you are potentially missing the most effective way to grow your wealth.
(more…)

Read more »

Investing when you’re over 50

Investing in your 50's
 
It would be great if everyone started saving money early to take advantage of compound returns but it’s easy to see how people fall behind. The typical financial lifecycle involves saving up for a house deposit, having children, and all of the expenses that come along with raising a family.

Meanwhile for many people in their 50s and 60s, compulsory superannuation didn’t kick in until much later in life…

Plenty of parents reach the empty nest phase of their life once the kids are out of the house and slowly realise they are completely unready for retirement. The average superannuation balance for someone who is 50-54 in Australia is $142,644. That falls a long way short of the amount needed to generate a comfortable income in retirement.
(more…)

Read more »

Generation rent – get ahead while renting

Renting property
 
If you’re one of the many young people renting and locked out of homeownership you’re undoubtedly aware of all barriers.

Homeownership for under 40s has plunged from 36% to 25% since 2002. The median price of a residential home in Australia’s cities is in excess of $700,000 (if you’re in Sydney the median cost is $1.1m).

To put this in context you’ll need $140,000 in the bank plus some to put down a 20% deposit on a $700,000 home. If you don’t have 20%, you can still get a mortgage but you’ll pay mortgage insurance (this protects the bank not you) and you’ll get a higher interest rate to boot.

These are just some of the many facts and stats coming out of recent reports such as HILDA and ABS which all make for pretty grim reading.
(more…)

Read more »

How to invest when markets go sideways

Sideways market
 
Sometimes markets don’t go up or down, they go sideways. Sideways markets can last weeks or even years. They can be particularly frustrating for a long-term investor.

As time passes and markets don’t go anywhere, it can be tempting to change your investment strategy or switch into cash. However like driving in heavy traffic, switching lanes is unlikely to get you there faster. The best investors resist the urge to change strategy during these times because they understand the secret to sideways markets.
(more…)

Read more »

Why it pays to be a (lazy) investor

Better to be a relaxed lazy investor
 
In most of life’s pursuits, the harder you work the better your results. Work-out more and the fitter you become. Study harder and you can get better grades.

People apply the same logic to investing. If you watch and listen to as much market news as possible you can get ahead of everyone else. There is no shortage of share market newsletters, tipsters and TV commentators to help give you an ‘edge’ over the millions of other investors out there.

Since 1995 all the people reading, researching, charting, analysing, scouring the market for opportunities and actively trading have lost out to those investors who have done absolutely nothing. In fact those so called ‘lazy investors’ made triple the returns of their active counterparts.
(more…)

Read more »

How SMSFs are using robo-advice

SMSF and robo-advice
 
Self-managed super funds (SMSFs) are popular because they offer greater control over how your superannuation is invested.

Despite their popularity, managing an SMSF well is difficult – it requires time, effort and investment expertise. This is why more SMSFs are using robo-advice to reduce this burdon.

SMSFs + robo advice

The emergence of robo-advice in Australia over the last 4 years and the increasing popularity of ETFs has resulted in an increase in SMSF trustees allocating part of their fund to a robo-advice service to manage.

Robo-advice is now the fastest growing area of wealth management globally, expected to grow to US$2.2 trillion or 5% of all money managed by 2020.

Considering that SMSFs are the largest segment of the Australian superannuation industry, managing $653.8 billion as at December 2016, it’s inevitable that more SMSFs will turn their attention towards robo-advice over time. In Australia this trend is still in its infancy however 2017 is shaping up to be the year more SMSFs started using robo-advice.
(more…)

Read more »

Do I need an accountant?

Accountant - tax return time
 
Accountants sort out your taxes and finances. Deciding if it’s time to pay and bring in an expert or do it yourself can be confusing, particularly if you have investments.

We spoke to Anna Kyriacou, CEO of AKA Group Accountants Advisors Mentors about when you should consider getting an accountant and stepping away from a DIY tax approach.

What does an accountant do for an individual?

There’s a misconception that accountants are just number crunchers and are only required if you’re in business. This couldn’t be further from the truth.

Most accountants that offer tax solutions work in small accounting firms based in the suburbs and many today do not even have physical offices as they are cloud based and tend to have clients they’ve looked after for many years.

A good accountant will not only assist with getting the most from an end of year tax refund, but will provide guidance on your future tax and structuring needs which will make a huge impact to your current and future wellbeing.
(more…)

Read more »

Blame it on the ETFs

ETFs - punching bag
 
They’ve been described as worse than communism, and more dangerous than the misuse of antibiotics. Some would have you believe that they cause trading glitches, are making the market dumb and dysfunctional and are leading the world toward imminent catastrophe.

It’s no coincidence that the groups most threatened by the groundswell of money into ETFs and index investing are also their staunchest and most vocal opponents. Any time there is hostile press on ETFs, you can be sure the author behind it is an active fund manager.

The irony is that the job of active fund managers is to identify and profit from market anomalies and trends. Yet they are ostriches in the sand when it comes to the colossal shift in their own industry.

The trend out of active management into indexing started gaining pace in the early 2000s. The pace has been accelerating since 2009. Regulatory change around best interests duty and growing awareness of the benefits of low-cost investing have both contributed to the success of indexing and ETFs.

(more…)

Read more »

Meet the team: Lauren

Meet the team: Lauren
 
There’s a birthday celebration in the Stockspot office and as the cake is brought out, you notice someone’s eyes suddenly light up. No, it’s not the birthday boy or girl – but the president of the Stockspot cake appreciation club (also our Head of Communications and PR) Lauren.

Like many Aussies, Lauren spent part of her years living in London and shares the reason why Australia will always be home.

Tell us a bit about yourself

I grew up in Canberra and moved to London in my early 20s to do the working holiday thing and stayed for over 10 years. Now I’m living in Sydney and appreciating the mild winters and the amazing sunshine.
(more…)

Read more »

Our wealth management principles

Stockspot wealth management principles
 
Stockspot has a set of principles that guide how we advise clients and invest their savings. This is our DNA and what sets us apart from other products and investment managers.

The importance of compounding returns

Market timing or picking the right stocks is almost impossible to do consistently, even for experts. It is far more important to be invested for a sensible amount of time across a broad range of different investments.

The assets you’re invested in determines 89% of your returns. Therefore the investment strategies we recommend are designed to weather different market conditions by combining assets in the best possible combination based on your personal financial goals and situation.

We focus on helping clients achieve long term compounding returns without needing to time the market or pick individual stocks.
(more…)

Read more »

The importance of Australian shares in your portfolio

Australian shares - ASX
 
Over the past 5 years US shares delivered a whopping 21% per year compared to a more modest 11% per year from Australian shares. This has led to a swarm of investors flocking into overseas shares and global ETFs.

With all of the talk about Google, Apple, Amazon and Facebook you could be excused for thinking that investing in Australia was no longer the thing to do.

In spite of the excitement around overseas markets, Australian shares still form a key part of our portfolios. We believe they should remain the dominant growth asset for Australian based investors.

There are many reasons to continue owning Australian shares but here we’ll focus on two.
(more…)

Read more »

Unpopular ETFs surge ahead

2017 Australian ETF Report
 
It’s that time of year when Stockspot releases its annual Australian Exchange Traded Funds (ETF) Report which analyses and compares over 150 ASX-listed ETFs.

The report is now in its third year and each time it grows as more ETFs are launched on the ASX. We think that’s a great thing as it means more people are embracing index investing for their portfolios and superannuation.

The ETFs we’ve carefully chosen for the Stockspot portfolios and themes continue to do well. We recently celebrated our third anniversary and you can read how our portfolios have performed here.

If you’re interested in reading about the different ETFs available we recommend you download the full report. Here are some of the main findings from this year’s report.
(more…)

Read more »

How much do you need for a rainy day fund

Umbrella for a rainy day
 
Sometimes the weather folk at the Bureau of Meteorology get it wrong and it rains when you least expect it. You’re caught outside in your thongs without an umbrella and frankly, it’s not fun.

What’s worse than being in the rain sans umbrella? Needing money in an emergency and not having any set aside to cover the cost of an urgent or unexpected expense.

That’s why having some money set aside for unexpected events is advice we give to all clients. This is money that should be readily available in a bank savings account rather than invested.
(more…)

Read more »

Finding freedom from the Bank of Mum and Dad

Parent and child - Future Affordability Report
 
Financial freedom is the most important factor in our ability to achieve our lifestyle goals and lead our life the way we should reasonably expect to. Yet, this is no longer guaranteed for future generations.

According to the 2016 HILDA Report, future generations of young people in Australia are, for the first time, set to be worse off than their parents.

To help understand parents’ views on their children’s financial future, Stockspot has partnered with Galaxy Research to produce the Future Affordability Report. We looked into parents’ concerns about young people’s finances, the cost of housing and living, and what do they think the fallout will be in later life for their children and themselves.
(more…)

Read more »

How reliable is past performance?

Rear view mirror
 
If you’ve ever read the fine print of a product disclosure statement (PDS) for a financial product, you’ve almost certainly seen ‘The past is not a reliable indicator of the future’. Admittedly, we even put it in the Stockspot documents because we’re obliged to do so.

But in fact past returns can give you a much better idea about future performance than almost anything else. Markets tend to move in cycles so when one asset does well for a while that’s almost always followed by a period of doing worse. It’s known as mean-reversion and it’s why we rebalance our client portfolios out of investments that are up, into ones that have lagged.
(more…)

Read more »

Stockspot celebrates 3 years…

Stockspot celebrates 3 years
 
This month marks the third anniversary since we started investing for clients. We’re humbled to have the opportunity to help thousands of Australians grow their savings every day.

Today our clients range from 18 to 80. They come from Alice Springs in the centre to Kalgoorlie in the west, Swansea down south in Tasmania and Townsville in North Queensland.

As we promised on day one, our investment philosophy and strategy haven’t strayed. Rather than trying to time the market or pick stocks (an expensive and dangerous endeavour), we’ve generated our consistent returns with a strategy based on decades of evidence and by not changing course.
We strongly believe that the most sensible investment advice for most people is to avoid trying pick winners, invest in a broad mix of assets, keep your costs low, rebalance occasionally to reduce risk and don’t worry about what happens in the short term because it’s meaningless noise.

This is a philosophy I’ve learned from my own years of investing and it’s one echoed by industry veterans like Warren Buffett, Charles Ellis, Burt Malkiel, Daniel Kahneman and many others…
(more…)

Read more »

Jargon busting the finance dictionary

finance dictionary
 
You’re watching the tele as you get ready for work. The 7.20AM finance news comes on and you dash to brush your teeth.

You know for the next 5 minutes the finance expert is going to stand in front of a ridiculous number of computer monitors and ‘blah blah blah’ their way through the ‘market update’ and use finance jargon you don’t understand. It’s enough to make you weep into your first coffee of the day.

It often seems like the finance industry is created on a house of jargon designed to keep people baffled to the point that they just give up and collectively say ‘take my money’.

Here’s a list of some financial jargon terms you’ll probably come across at some point and what they mean in plain English.
(more…)

Read more »

What are the best dividend ETFs?

Dividend ETFs and Dividend Harvesting
 
A client recently asked us if Stockspot would consider adding a pure income producing ETF to our portfolios to take advantage of ‘dividend harvesting’. We thought it was a great question so decided to share the answer with everyone!

Dividend harvesting is a strategy that involves buying shares just before they pay dividends and selling them just after dividends have been paid. At face value this sounds like a very sensible way to collect dividends without having to hang onto shares for too long.

However, like any investment strategy that involves timing your entry and exit points, dividend harvesting has risks. The biggest risk with dividend harvesting is shares tend to fall in price on the day they pay their dividend. Therefore any amount you gain in the dividend is likely to be lost on capital returns.
(more…)

Read more »