Record runs and how 2019 became a hunt for yield
An upset win for the Coalition. The death of a divisive debate on franking credit entitlements. A zero in front of the official cash rate. A stock market surge.
An upset win for the Coalition. The death of a divisive debate on franking credit entitlements. A zero in front of the official cash rate. A stock market surge.
What a difference a year makes. This time twelve months ago we were wringing our hands, fretting over a stock market plunge and biting our nails over a simmering trade war and Brexit tensions.
Fast forward to December 2019 and the trade war has apparently reached a new—and binding—truce—even as the leader of the free world faces impeachment. While in the UK, Boris Johnson's "stonking" election win put Brexit on an even keel.
In the US, market reporters are no doubt tired of writing the same story about the market reaching new highs. And it’s a similar story here. Despite a subdued start to the new decade, the ASX 200 is up by almost 25 per cent.
And as for that raging debate over the “retiree tax”, well, Scott Morrison’s upset—and emphatic—election win in May not only left Labor scratching its head about the future, but also killed off the idea of an end to cash returns for excess franking credits.
That was one force that put a rocket up things. The other was of course the RBA’s historic move to cut the cash rate to 0.75 per cent. We joined the rest of the world in the sub 1 per cent club. Some argue we had to do it to keep our exports competitive. In any case, the story of the year suddenly became the chase for yield.
Investors scratched their head and wondered: where the hell do I find a decent yield? There was no alternative, as the saying goes, as investors piled into stocks, and took a step further out on the risk curve. Will they venture further in 2020? Not a good move, said Morningstar soothsayer Peter Warnes, who warned us to squirrel a bit away, and above all, to be careful.
2019 was also marked by some curious initial public offerings, which reflected the changing times we live in and the internet-drive evolution in the way we consume things: in short, companies that sought money included food delivery providers, buy now pay later companies and shared workspace companies. Do they sound like they’ll have carved out a wide moat in a few years?
This year we sought to illuminate such changes with articles on stocks, funds, and exchange-traded funds, among others. We also strived to bring you the latest in retirement trends—and of course tips on how to make the most of it.
We also welcomed a record number of you to the Morningstar Individual Investor Conference, where we heard from local investing heavyweights Hamish Douglass and Andrew Clifford, as well as Australia’s oracle of economics Shane Oliver.
And as always, we sought to bring you the insights of our analysts here at Morningstar Australia. Several Australian stocks forged a place on Morningstar’s Global Equity Best Ideas list, and several funds were awarded Morningstar medals.
On the editorial team front, we welcomed Firstlinks managing editor Graham Hand, who brings deep industry insights and unrivalled access to some of the leading investment and financial minds.
On that note, we thank you for your continued support and valuable feedback. We look forward to extending our coverage next year to bring you more actionable ideas, insights and tips.
From all of us here at Morningstar Australia, may you have a safe, prosperous and peaceful new year.
Warmest wishes,
Glenn Freeman (Senior Editor),
Lex Hall (Content Editor),
Emma Rapaport (Editor), Morningstar Australia
Best of Morningstar 2019
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Knowing the nuances of these three structures can help you make shrewder investment decisions.
Investing basics: pay yourself first—the simple money habit to grow your wealth
A little bit of planning can help you quickly and painlessly establish a nest egg.
Harnessing the electric car revolution | Part 1 | Part 2 | Part 3 | Part 4
In just five years’ time, battery-operated electric cars will compete with conventional cars on both price and performance.
Morningstar’s Eleven: How to spot a wide-moat stock | Part 1 | Part 2
What do an Aussie funeral parlour and a Kiwi airport have in common? That may sound like the set-up to some crass joke but it’s actually a serious question.
Hamish Douglass looks back on the rocky route to Magellan, his exasperation at trying to predict the Fed’s rate moves, and the regulatory risks assailing the US tech stocks.
Labor's plan to axe cash refunds for excess franking credits may have monopolised attention in the countdown to the election but investors stand to lose out even more from other proposals, Australia's peak superannuation body warns.
Your retirement: sunset beach walk or a diet of canned tuna?
Can Australians look forward to increased leisure time in their retirement years, or do they face days of penny-pinching?
