Graham Hand - Firstlinks

Stocks, ETF’s, bonds, cash, property etc have all been discussed, but how should one balance these depending on their objectives? This is the gist of a question asked by listener Seb Armstrong. Thanks Seb.

It brought to mind a presentation I saw at an ASA meeting about investing for the long run using low-cost ETFs. It seemed like the perfect answer so I invited Graham Hand from Firstlinks to discuss.

Firstlinks is a publishing service providing content written by financial market professionals with experience in wealth management, superannuation, banking, academia and financial advice. I would highly recommend subscribing to their newsletter. 

We discussed:

• The intergenerational report; a vision of Australia in 2050
• Forecasting the market
• Your risk appetite and time horizon
• Constructing a portfolio for the long-term
• Cheap ETF options
• Alternative asset classes
• Firstlinks and enduring investment advice

We referred to a number of slides in the podcast. Here they are!

The Intergenerational report; a vision of Australia in 2050​

A couple aged 60 today has a 50% chance that one of them will still be alive at the age of 90. The future of retirement is one which is radically different from the retirement experience of the past. As we live longer and longer the ratio of retirees to workers grows smaller and smaller, meaning that government support may not always be as generous as it is today, and there may be even greater onus on retirees to support themselves.

Forecasting the market

History does not matter for your investments, all that truly matters is what your investments do tomorrow and predicting that is a lot harder than it looks. Many people can look to the past and construct a convincing story for the future but far fewer are able to invest and consistently and beat the market over a long period.

Cheap ETF options

ETFs offer a cost-effective strategy to diversify. Buying an ETF can give exposure to potentially thousands of companies with one transaction cost, while also offering some of the lowest management fees in the industry. By selecting a number of ETFs over a few traditional and alternative asset classes individual investors can generate global exposure and pay a fraction of a percent in management fees.

That sample portfolio is based on the Future Fund, Australia's sovereign wealth fund, that was established in 2006 to strengthen the Australian Government's long-term financial position.

Firstlinks and enduring investment advice

Firstlinks aims to give its subscribers knowledge and lessons which they can use across life, they aren’t as interested in stock picking as they are in giving investors fundamental advice which they can consistently refer back to when making investment decisions.

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Shares for Beginners is for information and educational purposes only. It isn’t financial advice, and you shouldn’t buy or sell any investments based on what you’ve heard here. Any opinion or commentary is the view of the speaker only not Shares for Beginners. This podcast doesn’t replace professional advice regarding your personal financial needs, circumstances or current situation.

Thanks to Christopher Soulos for music production out of Garlic Breath Studio https://www.facebook.com/GarlicBreathStudio. Remember music flows when the money don’t.