Investing 101

For those planning to invest in offshore assets, the decision whether to hedge currency exposure is an important one as movements in the Australian dollar can either erode or add value to an investment.

Dividend investing can be a good source of defensive income in volatile times, but changing fundamentals mean resources companies and banks may be the weaker play in 2023, with opportunities emerging beyond these traditional Australian dividend payers – although valuation will be key.

An emerging global supply shortfall and booming demand due to the clean-energy transition are set to support big gains in the price of copper, leaving investors hunting exposure to the few mining projects currently online.

Australia’s dividend imputation system is designed to stop the double taxation of company profits. While investing in companies that pay fully franked dividends can be tax effective, tax should never be the primary determinant of a decision to buy shares.

Dollar-cost averaging allows investors to be in the market for the good days as well as the bad. This can help reduce exposure to market declines, as recent research shines light on the difficulty of timing the market.

Increased traffic volumes and higher earnings have provided valuation support for the infrastructure company, ClearBridge Investments’ Shane Hurst says, with the post-COVID-19 recovery positioning the business for solid growth.

Lending specialist Daniel Zwirn spoke candidly about investor “credit myths”, and the misunderstandings that hold people back in the selection and movement of assets in portfolio construction.

With economists expecting the Australian dollar to strengthen this year, investors are looking to currency-hedged funds to remove FX exposure that threatens to erode the value of their international investments.

Exchange-traded funds continued to attract inflows from investors in 2022, albeit at a slower pace thanks to rising interest rates and market volatility. Resources and mining-focused funds were clear standouts in a challenging year.

As the RBA’s rate hiking campaign appears to approach its peak, investors looking to lock in term deposits should shop around to find the best rates, analysts say, warning that the complacent risk missing out.

US technology stocks have suffered steep losses over the last year as interest rates have marched higher. But with the Fed now signalling reductions in future rate hikes, value could emerge in tech stocks with strong fundamentals.

Disruptor wealth platforms like HUB24, Netwealth and Praemium have been taking market share from the mostly bank-aligned platforms for years. While waning investor sentiment has hurt inflows recently, analysts say these platforms are still well positioned in the shift away from incumbents.