649b equity market update, investment structures, Tesla’s dominance, Apple vs Microsoft + more (campfire chat with Gemma Dale)
Dec 6, 2023
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In this campfire chat, Glen James is joined by Gemma Dale, Director of SMSF and Investor Behaviour at nabtrade. They discuss the performance of different markets, recent deals, venture capital funds, stock market performance, managed accounts vs. pooled asset vehicles, ETFs, investment structures and tax considerations, innovation in financial services, and the importance of consistency and quality decisions in investing.
Managed accounts offer individual asset ownership, customization, and tailored investment strategies for direct control over investments without tax consequences and transaction costs.
When choosing a brokerage platform, prioritize factors like quality decision-making and investment behavior consistency rather than solely focusing on cost.
High-income earners should consider different structuring approaches like family trusts with corporate trustees and self-managed super funds for efficient retirement savings and potential tax deferral benefits.
Deep dives
The benefits of managed accounts
Managed accounts provide the benefit of individual asset ownership, allowing investors to have direct control over their investments without being affected by other investors' behavior. This eliminates the potential tax consequences and transaction costs associated with pooled vehicles like managed funds. Additionally, managed accounts offer the advantage of customization and tailored investment strategies to meet individual needs and goals.
Considering factors beyond cost
While there may be a focus on cost when choosing a brokerage platform, it is important to consider other factors as well. The quality of decision-making and investment behavior consistency should be the primary focus. Instead of solely focusing on cost or platform selection, it is crucial to prioritize factors that will lead to consistent and sound investment decisions. Working with a financial advisor can help in this regard.
Structuring investments for high-income earners
High-income earners should consider different structuring approaches to optimize their investments. Some options may include setting up a family trust with a corporate trustee and a bucket company beneficiary, which offers potential tax deferral benefits. Additionally, individuals may choose to utilize self-managed super funds for efficient retirement savings. Each individual's circumstances may vary, and it is recommended to seek advice from a financial advisor to determine the best structuring approach.
Considerations for selling stocks or ETFs
When it comes to selling stocks or ETFs, there are a few factors to consider. First, it depends on the type of stock and its speculative nature. For highly speculative stocks that have had a significant run-up, it may be wise to take some profits, especially if it represents a large portion of your portfolio. However, with more established stocks that show long-term potential, it might be beneficial to let the gains run. Second, it's important to evaluate your investment thesis and whether it still holds true. If the stock or ETF continues to align with your investment strategy and you would still buy it at the current price, holding on to it might be the right choice. Lastly, it's crucial to maintain a balanced portfolio and manage risk. Rebalancing periodically, perhaps every three months, based on your target asset allocation can help prevent your portfolio from becoming overly concentrated in a single stock or asset class.
Behaviors and mindset in investing
Successful investing requires discipline and a clear mindset. Traders should focus on running their gains and cutting losses based on their trading strategy and plan. Investors, on the other hand, need to define their target asset allocation and regularly rebalance their portfolio to manage risk. Dollar-cost averaging and avoiding emotional reactions are key principles for both traders and investors. Additionally, it's important to recognize the pros and cons of different investment vehicles, such as cryptocurrency, and align them with your risk tolerance and long-term goals. Ultimately, consistency and behavioral discipline are key to success in investing.
It's been awhile since we've had a good old campfire chat about investing in equities! Shooting the breeze with Glen are Gemma Dale, host of Your Wealth and Director of SMSF and Investor Behaviour at nabtrade and Vince Scully from Life Sherpa. Campfire episodes sometimes touch on more intermediate and advanced money concepts.
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