Here’s what you need to know today

• Black Friday sales are in full swing as the latest American tradition to make its way to Australia sees retailers cutting prices and spending big on marketing. Be intentional about the way you spend over the weekend - it can be a great time to pick up Christmas presents at a discount. It can also be a time you waste a lot of money on things you don’t need. (ABC News)
  
  

• Your coffee is about to get more expensive, after coffee future rose 3% to their highest levels since 1977. Since January, coffee prices are up more than 70% as dry weather in Brazil, the world’s largest coffee producer, has traders worried that next year’s crop will be smaller than usual. Also pushing up prices are American buyers stockpiling supplies before Trump’s tariffs. (Financial Times)
  
  

• Australian Parliament’s vote-athon has come to an end. On the final sitting day of Parliament for 2024, and perhaps the last sitting day before an early 2025 election, the government had 31 laws they wanted to get passed. Laws being passed into the night included a social media ban for under 16s, Build to Rent housing policy, Future Made in Australia policy, reforms to the Reserve Bank of Australia, hardline immigration rules, changes to anti-money laundering rules, and mergers and acquisitions reforms. (AFR | Guardian)
  
  

• The Big 3 ETF providers - BlackRock, Vanguard and State Street - are being sued by 11 Republican-led US states for allegedly violating antitrust law by coordinating climate policies and using their shareholding to pressure coal producers to cut output which led to higher energy prices. The lawsuit was filed in US federal court in Texas. (Reuters)
  
  

• More signs that the US consumer is holding up okay. The latest data shows the US economy grew at an annualised pace of 2.8% and consumer spending was up 3.5% while the Federal Reserve’s preferred measure of inflation - the personal consumption expenditure index - was up 2.3% year-on-year. This looks a lot like the soft landing central banks were hoping for. (Capital Brief)
  
  

• European traders panicked over concerns that France’s contentious €60 billion planned tax increases and spending cuts could collapse Prime Minister’s Michel Barnier’s government. France’s CAC 40 stock market index fell 0.7% and the yield on 10-year French bonds rose. France’s fiscal deficit of 6% of GDP is more than double EU targets. (Financial Times)

What the…?

The Kendrick-Drake rap beef is moving to the courtroom and Spotify has found itself caught in the middle. Drake is suing the music streaming platform as well as Kendrick’s record label Universal Music Group, claiming the companies conspired to boost the streams of Kendrick’s anti-Drake diss track, Not Like Us. (Yahoo)

Investing is a lifelong journey

Here’s what you can learn today.

This is an excerpt from our book Don’t Stress Just Invest, which last week won Best Investing Book at the 2024 Business Book Awards. Pick up a copy here.

Don’t overthink it: the less we do, the better we invest

There have been numerous studies that show that by trying to do more, we end up with less.

• BlackRock studied investor returns between 1996 and 2015 and found that, while the broad stock market returned an average of 8.2% per year, the average investor returned 2.1% per year. Should have just held the index!

• Two University of California researchers studied 66,465 households with investing accounts between 1991 and 1996. In that time the market returned 17.9% a year, the average household earned 16.4% per year and those that traded the most frequently earned 11.4% per year. Should have just held the index!

• Researchers in Taiwan were able to get a complete trading history of all investors in Taiwan and found that overtrading imposed an ‘annual performance penalty of 3.8 percentage points’. Again: should have just held the index!

Beyond the studies, this makes intuitive sense. Every action you take in the financial world has costs. Between fees, brokerage costs and spreads, you have to pay to play. The more you do, the better your return has to be to overcome the additional fees you’re paying.

Today’s sponsor is J.P.Morgan Asset Management

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