Macro
The week ahead in Australia will no doubt be dominated – at least for those not more enthralled by Eurovision - by the outcome of the election which has seen the Coalition returned probably with a majority or as a minority. While there will no doubt be much debate about the... Show More
Macro
Surprisingly weak Australian inflation has led to expectations the Reserve Bank will soon cut rates. But what’s driving low inflation? Is it really that bad? Why not just lower the inflation target? Will rate cuts help? And what does it mean for investors? Inflation surprises on the downside again Australian inflation as... Show More
Politics
Some might be forgiven for thinking the wheels have fallen off Australian politics over the past decade with the same number of PM changes as Italy, a fractured Senate and “minority government” at times making sensible visionary long-term policy making hard. With the May 18 Federal Election offering a starker... Show More
Much has been made of Australia’s nearly 28 years without a recession. Despite many seeing recession as inevitable in response to the 1997 Asian crisis, the 2000-2003 tech wreck, the GFC and the “end” of the mining boom Australia has seemingly sailed on through each of these regardless. This has... Show More
Dividends are great for investors. They augur well for earnings growth, provide a degree of security in uncertain times, are likely to comprise a relatively high proportion of returns going forward and provide a relatively stable source of income. Including reinvested dividends, the Australian share market has surpassed its 2007... Show More
Collections
A good chart distils terabytes of data into a small image that delivers a big message. And to cherry-pick the messages investors need to hear most right now, we asked some of Australia’s top managers to nominate one chart above all others. Mik Case from Schroders and Chris Rands at... Show More
Macro
The housing cycle and house prices always incite high interest in Australia. Until recently it was all about surging prices and poor affordability – particularly in Sydney and Melbourne. Over the last year it’s turned into how far prices will fall and what’s the impact on the economy. Global issues... Show More
2017 was a great year for well diversified investors – returns were solid (balanced super funds returned around 10%) and volatility was low. So optimism was high going into 2018 but it turned out to be anything but great for investors who saw poor returns (average balanced super funds look... Show More
Many investors have been rattled by falls in share markets and are fretting about what the new year may hold.But there are a number of reasons to suggest that after a weak 2018, 2019 will be better, and that a well-diversified portfolio should deliver reasonable returns. Show More
A year ago, the property boom was showing signs of fading and we expected property prices to fall in Sydney and Melbourne by around 5-10%. Home prices were overvalued, affordability was very poor and tightening bank lending standards in response to pressure from the bank regulator APRA was expected to... Show More
Hi Bill. Thanks for your comments but actually I did refer to that in the first point regarding dividends in relation to “poor hubris driven investments”. Regards Shane
Hi Michael. Thanks for your comment. Regards Shane
Hi Lyn. In terms of the 8% ...I am not a tax expert but for most taxpayers their franking credits would be well below their taxable income so for a fund with a lot of accumulators franking credits will still be received in full as now. Regards Shane
Hi Brian. Sorry I can’t comment on the AMP share price. Regards Shane
Hi Peter. I would assume that would be the case..but would need to see what a new ALP Gov says if they win. Regards Shane
Hi Will That’s the trick. Those that do are rich!
Hi Gregary True but there are two complications: In history booms or more specifically bubbles get defined by their busting..if they don’t bust then they don’t get defined as a bubble no matter how much their prices went up. Secondly the busting can occur via a long period of weak prices - so they end up falling in real prices or versus wages say but without necessarily crashing in nominal terms. Aust home prices arguably did this from the mid 70s into the mid 90s. Thanks for your comment. regards Shane
Martin - If you save it does.
Hi Tristram Lots have asked me that. I used to be able to in the AMP Plaza. My soy and linseed roll with cheese and tomato only cost $5.30...but it got closed for a rebuild in November and I have been making my own because everywhere else had rich gourmet sandwiches. I think sandwiches in service stations are still around $5...anyway I take your point. $10 a week won’t buy much regards Shane
Hi Alex Thanks. They are consistent and start with the same price data. The final chart relates to total returns. Its based on the same nominal home price data that was used to derive the real price line in chart 3 (yes it is 3% real pa). All I have then allowed for is a compounded rental yield (which used to be much higher than it is now) and allowance for the costs of maintaining an investment property to give a net return index. I don’t have the data in front of me but its something like: 3% real price gain+3% inflation+7%yield -2%pa =11%pa (averaging over the whole period since 1926)
On Falling Sydney & Melbourne home prices – is this the crash? -