Another year and we’re seeing another scandal at one of the big banks. This time it’s Commonwealth Bank. Or we should say Commonwealth Bank are at it again, given their scandal plagued history. This time their CommInsure arm has been exposed through an investigation by 4 Corners and Fairfax reporter Adele Ferguson. The investigation uncovered CommInsure doctors being pressured to change assessments of clients to save money, to delay payments to terminally ill customers and refusing to honour legitimate claims. These were issues across all types of policies with some income protection customers off work without any income for long…

The downside (and benefit) of investments measured in real time means there are ever-present signals that generate real time reactions and real time emotions. When markets are moving upward the signals are positive and investors exhibit a sense of ambivalence because that’s what they invested for, right? When they are moving downward there’s a sense of fear, terror and possibly end of days because if the market is signalling anything, it’s more of the same, right? After some markets had their worst weekly start to the year ever, the media started reporting with an ominous tone. To them it was…

It’s no secret the mining boom has ended. Across the country, towns that were previously roaring given their proximity to Australia’s in demand natural resources, have ground to a halt. The massive influx of workers that swamped those towns pushing up living costs have now disappeared, leaving businesses struggling and real estate without demand. That lack of demand for real estate has decimated property investors who’d swooped on these previously hot locations. News articles have documented the hundreds of thousands (even millions) of dollars of equity that have been lost on single properties. We’ve previously documented this here for Gladstone,…

Ten years ago, in another country, a man we’ll call Bill, died at 75. He left his wife, a lady we’ll call Betty, $50,000 and a house worth $350,000. Betty was 65, living on a government pension and no longer wanted the hassle of the house. So she sold it, but before leaving she asked her next-door neighbour for advice on investing the proceeds. Her neighbour pointed Betty towards his financial advisor. Soon Betty was set up with a portfolio that paid her rent and offered her income in addition to her pension. Then 2008 happened. Betty’s portfolio fell by…

Economic Overview Divergent policy cycles remained a significant theme in 2015. US authorities responded to improving economic conditions by raising interest rates for the first time in nearly a decade, while central banks elsewhere opted for further stimulus. China continued to add stimulus to an economy whose growth rate in 2015 fell short of the official 7% target. The Central Bank cut interest rates six times in 12 months and, in August, devalued the yuan by 2%.   With conditions subdued in Chinese manufacturing and construction and global industrial production weak, commodity prices declined. Iron ore and base metals were…