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Indexing

The truth on three big indexing questions

Indexing has come under increasing criticism as it has grown rapidly. Three issues dominate the arguments but the indexing benefits of low cost and diversification means active and index funds have a symbiotic relationship.

passive investing

The paradox of passive investing

The rapid rise in investments into passive vehicles is having a distortive effect on markets as the flows are prone to sudden reversals. The cheap cost may come with a paradoxical result.

bust

US will fall more than Australia in next bust

Amazingly, Australian and US stock markets have delivered the same returns for their home country investors over the very long term. With the recent US strength, it’s more likely to fall further in the next bust.

value investing

The potential for a value revival

Value investing compares the estimated intrinsic value of a company with its market value, and although growth and value go in cycles, there are signs that some value stocks are at attractive levels.

value trap

Five ways to avoid the ‘value trap’

Value investing is not just about a low P/E or EV/EBITDA. Other metrics need to be considered to prevent falling into a value trap, as well as what challenges are facing the industry and the time frame allowed for success.

investment bias against smaller companies

The investment bias against small companies

The share prices of smaller companies are traditionally more volatile than large, but the market is changing and the roles seem to be reversing. Is it possible to change our bias against small caps?

Korean War

What happened in the last Korean War?

A war between the United States and North Korea is unlikely, but with Donald Trump and Kim Jong-Un turning up the rhetoric and mad fingers on the red buttons, anything is possible. What happened last time?

effects of dividend imputation

Australian LICs versus Berkshire Hathaway

As part of the continuing discussion about dividends, Peter Thornhill sent in a chart that compares the long term performance of three Australian LICs with Warren Buffett’s legendary Berkshire Hathaway.

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