Indholdsfortegnelse for November 2024 i Money Magazine

EDITOR’S WELCOME In my experience, it’s not only deep introspection and enormous selfdiscipline that changes people’s financial behaviour. Pithy insights and nuggets of wisdom also play a part. Quick to understand and easy to remember, they are particularly important when emotions take over, for example at the point of sale or when an important decision is imminent and logic suddenly competes with feeling. Among the serious analysis and information found in our pages, Money is full of these aphorisms. My favourite from this issue is found in Paul Clitheroe’s Verdict (page 32), where he writes that ‘saving is simply postponing consumption’. Saving, then, is not selfdenial; it’s just delayed gratification. Personally, those five words have helped shift my slight reluctance to park money out of immediate reach. Two of our…

AMAN RAMRAKHA OUTLOOK Traditionally, portfolios have been made up of cash, bonds and equities. The classic 60/40 portfolio was generally 60% growth assets or equities and 40% defensive assets, such as cash and bonds. Over time, more asset classes started to feature, for example, property, infrastructure and alternatives such as hedge funds. In the hierarchy of risk-and-return relationships, cash ranks the lowest, meaning it presents the lowest risk but also the lowest probability of returns. Bonds come next, then equities. The other area of focus is correlation. If two assets are highly correlated, their price will generally move in lockstep, whether up or down. For low or negatively correlated assets, the price movements are independent of each other. In an ideal world, defensive assets, such as cash and bonds, are…

MARK CHAPMAN TAX TIP Can you claim tax deductions for vacant land bought for the purposes of constructing a new rental property? It used to be possible, but the tax rules have changed. The expenses associated with holding vacant land are no longer tax-deductible. The sort of deductions that used to be claimable, but no longer are, include so-called ‘holding’ expenses, such as loan interest on money borrowed to finance the acquisition of the land, council rates, land tax and insurance. To claim the deduction under the old rules, it was necessary to demonstrate that active and genuine steps had been undertaken to build the dwelling and make it available for rent as soon as it was completed. But under the new rules, even while the rental property is under…

Aussies' top three money dreams • Financial independence (54%). • Taking regular holidays (52%). • A work-life balance (48%). Source: MLC More than two in three Australians (69%) don’t feel confident that they have the knowledge or skills needed to make effective financial decisions. That’s one of the major takeaways from a new report published by the investment and superannuation firm MLC, which suggests that this limitation is holding people back from being able to achieve their dreams and navigate financial speed bumps. “Confidence in managing your money is crucial, but it’s the right advice and accessible resources that bridge the gap between dreaming and doing,” says Jenneke Mills, the head of technical services at MLC. “Those who seek help for their financial needs, whether it be through tips, coaching…

MORE INVESTING STORIES ON P72-75 Stake your super claim The Australian Taxation Office (ATO) is on the hunt for the rightful home of billions of dollars’ worth of lost and unclaimed superannuation. Over the past three years, the ATO says it has helped reunite almost $6.4 billion worth of super with its rightful owners, but says that there is still $17.8 billion left unclaimed. “If you’ve changed jobs, moved house or simply forgotten to update your details, you may have lost or unclaimed super,” says Emma Rosenzweig, deputy commissioner at the ATO. “Even if you’ve retired you could have lost or unclaimed super. The ATO is holding $471 million on behalf of people aged 65 plus. Superannuation is a key part of your retirement, and we want to make sure…

The opportunity didn’t last long. Towards the end of September, we upgraded coal stock Whitehaven at a price of $5.97 and prepared for the grinding path downwards. Whitehaven did the exact opposite, soaring almost 20% in a week. The sharp rise was driven by the launch of Chinese government stimulus measures, which increased metallurgical coal prices from $US190 ($293) to over $US220 ($328) a tonne. That move, plus government approval for a mine extension at Narrabri, put a rocket under Whitehaven’s price, firing above our ‘buy’ limit. We had no idea that China would announce the package, but note that a pessimistic consensus tends to focus on the problem without considering solutions. Little good news was priced in. This does little to change the long-term story. Whitehaven has doubled its…

Six things to do 1. Stay in Sultanahmet This area, in the Old City, puts you at the centre of Istanbul’s storied history. The Roman-era Hippodrome (now a public square), which was for centuries the venue for chariot races, the mosaiced Ottoman-era Blue Mosque, the Hagia Sophia (completed in AD537) and Roman Cistern, as well as the expansive grounds of Topkapi Palace, are within walking distance. 2. Grand and Spice Bazaars, Eminonu From here you can walk or catch the tram to the Grand Bazaar, one of the oldest covered markets in the world. Beneath its arched domes are about 4000 shops selling nearly every item a visitor could want. Türkiye is famous for its leather work, so there are beautiful bags and accessories on offer. Nearby is the labyrinthine…

Many of us are getting down to the nitty-gritty of summer holiday planning: booking flights, accommodation and activities for ourselves and our families. And, just as night follows day, we now have to contend with a proliferation of dodgy hotel booking websites. While there are many legitimate websites – Expedia.com.au, Airbnb.com and Booking.com – which make booking easier, offer worthwhile discounts and show total upfront costs, there are also many that, while they aren’t outright scams, are dangerous to the wallet. Recently there has been an increase in international websites, such as Guestreservations.com and Reservationscenter.com, which advertise relatively affordable rates but later add taxes, fees and service charges that bump up the cost significantly. Another ploy they use relates to Google search results. You may search for a particular hotel…

This has been an incredibly transformative year for the cryptocurrency industry, benefitting from a strong recovery across two main coins, Bitcoin and Ethereum, in part due to the investment markets joining the space. The approval of spot Bitcoin exchange traded funds (ETFs) in the US in January provided confidence to investors that crypto is becoming more mainstream and playing an increasing role in the portfolios of larger institutions, while prompting more than $US14 billion ($20 billion) in inflows to these ETFs through to the end of June. This was followed by the approval of spot Ethereum ETFs in the US in May, with their trading debut in July providing a smaller but similar impact on confidence in the market. We also witnessed the Bitcoin halving, which occurs roughly once every…

Managed funds are an efficient way for retail investors to gain exposure to an asset class. Typically, they involve pooling investors’ funds together within a trust structure of sorts and a fund manager is appointed to deploy these funds in accordance with the mandate of that fund. Traditionally mandates can be for equities, fixed interest or alternatives. However, with the emergence of new asset classes – like digital currencies – new funds are being launched to provide retail investors access to these emerging asset classes. When selecting a managed fund, investors should consider several factors (see below) to assess whether the managed fund can execute on its mandate and deliver consistent returns. In our view, the experience and culture of the investment team, the coherence of the investment process and…

Almost halfway through the 2025 financial year, the markets are hovering around record territory both at home and overseas, which is something many participants could never have predicted given the high interest rates and sticky inflation of the past 12 months. It is important to note that the rally is not widespread and some sectors such as materials have been hit hard by macro factors and investors piling out. The tech sector is up an incredible 42.42% so far in 2024 driven by the AI revolution. From chip stocks such as Nvidia soaring almost 150% to local logistics leaders such as WiseTech Global rallying 74%, investor appetite for the high-growth sector has risen despite this type of equity traditionally coming under pressure in a high-interest-rate environment. Banking on the banks…

• Invest in personal development, learning new and diverse skills to increase employability. • Spend time building professional networks for support and opportunities. • Be organised and develop a financial plan to manage resources during the transition period. This will help create clarity and confidence in the face of uncertainty. • Be open about your journey, conscious of which phase of the grief cycle you are in, and seek emotional support from trusted family, friends or professional counsellors. • Create a structured daily routine to maintain productivity. • Engage in volunteer work or community service to stay active and connected. • Find ways to feel at peace with your situation. It is what it is. You are enough and you have enough to be a success in life. • Most…

Ultimately, whether you outsource a task or not depends on the situation. When conducting a cost-benefit analysis, Adams recommends the following: 1 Determine your hourly rate. Ask yourself: ‘What is my hourly rate, and could I earn more by working during the time saved through outsourcing?’ 2 Consider your wellbeing. Ask yourself: ‘Will outsourcing this task help me avoid stress or burnout, leading to better decision-making and overall financial health?’ 3 Consider your long-term financial goals. Ask yourself: “Can I afford the cost of outsourcing while still meeting my financial goals, such as saving for emergencies or paying down debt?” “Only once you’ve determined this will you know if outsourcing is right for you and your family,” says Adams.…

SUSAN HELY FAMILY MONEY Helping your kids get into the property market isn’t a new thing, but with sky-high home prices and rising rents, the growth of the Bank of Mum and Dad (BOMAD) is staggering. About 56% of Gen Z first-home buyers are receiving a gift or a loan from their family, according to Matt Lloyd-Cape, from the Centre for Equitable Housing, a research and policy initiative. He found it is double the rate for Gen X first-time buyers born 30 years earlier. For most parents, their adult children’s housing is a huge dilemma. It is for me and my children. Affordable housing is often beyond reach and parents are under pressure to help with a deposit. If parents have more than one child, it is a good strategy…

Super fund member Peter contacted Super Consumers Australia about a series of problems with his account. He had been happy with the service he received at his old fund, Energy Super, but he has had ongoing issues after it merged with Brighter Super. Peter says he sent details to Brighter Super about where he’d like his super to go after he passed away, but noticed months later that these details still hadn’t been updated in his account. When he phoned to follow up, he was alarmed to discover during the call that three complete strangers were now listed as the beneficiaries for his accumulation and pension accounts when he died. Understandably, he was spooked, fearing someone had hacked his account. He spent a sleepless weekend before his fund finally contacted…

SHARES KNOW OUR STOCK EXCHANGE When investors trade equities, most don’t give a second thought to the behind-the-scenes work to ensure the buyers and sellers exchange the shares and cash and to record who owns the shares. In Australia, this is largely managed by the Australian Securities Exchange’s (ASX) clearing house electronic subregister system, known as CHESS. When CHESS was introduced in October 1998, it was groundbreaking technology, with Australia becoming the first market to introduce a digital register of share ownership. Technology has moved on since then, and for the past eight years the ASX has been working to replace the system in a project that failed in its first attempt and cost the exchange as much as $250 million. The ASX is still working to replace CHESS, but…

BOOK OF THE MONTH RICH WOMAN POOR WOMAN by Pascale Helyar-Moray (Major Street Publishing, RRP $32.99) The difference between a rich woman and a poor woman is very often financial literacy. Australia’s superannuation system is the envy of many other countries, but most of us don’t understand it. As a result, one in six women in Australia retires in poverty. This book aims to address this frightening statistic and is an essential read for anyone wanting to safeguard their financial future. It explains how regularly monitoring – as well as paying small amounts into – your super will increase your savings, improving your financial security and setting you up for a comfortable lifestyle in your retirement years. Ten readers can win a copy. In 25 words or less, tell us…

Women have taken up investing at a greater rate than men in recent years, according to new research from Commonwealth Bank. The number of female CommSec customers with holdings grew by 18% in the three years to 2024, while the number of men increased by 10%. “The growth rate of women who are actively investing has outpaced men over the last three years by almost double,” says Susie Grehl, executive general manager, wealth and private, at CBA subsidiary Commonwealth Private. “With that growth comes a need for education and content that is engaging, accessible, and meets women where they are on their own individual journey.” But the bank says there is still a significant gap between women and men, both in terms of investor numbers and holdings. For instance, 42%…

It’s almost a given that at some point in their formative years, children will be asked the question: ‘What do you want to be when you grow up?’ Among the more common answers, such as doctor or firefighter, is a profession that so many aspire to but so few achieve: astronaut. Katherine Bennell-Pegg was one of those kids. Growing up on Sydney’s Northern Beaches, Bennell-Pegg remembers lying on the grass in her backyard looking up at the night sky. “When my mum told me that some of those bright lights were not stars, but actually planets that nobody had ever seen with their own eyes or walked on, I wanted to be the one to explore them. “It’s that same feeling that has driven us to want to explore the…

QUAFF 2020 Xanadu ‘Circa 77’ Cabernet Sauvignon $25 One of Margaret River’s finest wineries is closing in on half a century of winemaking in the region. Chief winemaker Glenn Goodall has been there since 1999. Classy cabernet is a standout; even this modestly priced gem is hard to resist. There’s lively cassis, redcurrant and black cherry aromatics, succulence with impressive depth and gentle power to finish. Delicious. SPLURGE 2022 Bekkers McLaren Vale Grenache $90 In recent times, critics from around Australia and the world have been increasingly vociferous in promoting McLaren Vale grenache as a world-class varietal. One of the leading labels gaining plaudits is that grown and made by Toby and Emmanuelle Bekkers. The 2022 builds slowly in the glass, showing power and concentration with an almost contradictory suppleness.…

PAUL CLITHEROE PAUL'S VERDICT YOUR QUESTION I’m a divorced, single father, age 43, with two daughters (16 and 12 years). Shared custody is 50:50. My current residence is in the Riverina, worth about $1,050,000 (mortgage $384,000), and I recently purchased an investment property in a nearby town, worth around $400,000 (mortgage $350,000). I used equity in my Riverina residence to purchase the investment property (deceased estate) and rent it for $420 a week. I work in allied health and earn about $120,000 with on-call and overtime/penalty rates. I have insurances for life/TPD/trauma etc that would cover all of my expenses and assist my children should something happen to me. I have about $400,000 in superannuation (Aware) plus a small shareholding (commercial property with limited recourse borrowing) in a self-managed super fund…

Elections will take place this year in countries covering nearly half the world’s population. Elections quite often have geopolitical consequences and sometimes, but not always, have impacts on markets, particularly when the result is not expected. Who can forget Brexit and the election of Donald Trump in 2016 as largely unforeseen events with long-lasting implications. A side note is that the most unexpected event that year, but fortunately with no adverse geopolitical or economic implications, was Leicester City winning the English Premier League. Elections aside, the current state of play is still a focus on inflation and interest rates. Markets are rightly obsessed with what central banks are thinking and, most importantly, whether both monetary and fiscal policy can act in concert to reduce inflation, lower interest rates and avoid…

Term deposits (TD) are a bit like the ’80s. Sometimes they are in vogue, other times they are out of fashion. This month, they appear out of style. According to the comparison site Mozo, more than 40 providers slashed their term deposit rates in September. While TD holders benefitted from rising cash rates in the past couple of years, rates have taken a downwards turn in the past two months. Latest data shows them hovering around 4.7% to 5% depending on the bank and the time period (six months to three years). Still, they are perfect for those who don’t want to second-guess what the rates are going to be during the lockin period. Most people use TDs to stash their savings in between big expenses: a wedding celebration, a…

Last financial year was another successful 12 months for super funds. The MySuper/default options ended 2023-24 with an annual average return of 9.4%. Even though this was only 1% more than the 2022-23 result, it is the consistency of positive returns year on year that helps build a nest egg. Over the longer term, MySuper products on average returned 7.1%pa over the 10 years to June 2024, while balanced super products delivered an average return of 6.5%pa. This was also the first year when all MySuper products passed the Australian Prudential Regulation Authority (APRA) performance test. Comparing it with the opening performance test in 2021, when 13 MySuper products failed, assures super members that things are on right track. In the choice section, although the number of failing products is…

Michael French (not his real name) had been working for Salesforce for four years when an invitation came through to join a company-wide call. It was early 2023, with staff having just returned to work after the Christmas break. “Every region in the world was asked to join this call. I think it was around 6pm Sydney time,” he recalls. “And the CEO was late. So, you’ve got around 100,000 people on that call, waiting to hear what it was about and it’s running late by about 30 minutes.” When the CEO eventually did turn up, it was to announce redundancies: the software company was reducing staff by 10% across its global workforce. A month later, French was told his position was gone. “I was upset,” he says. “The first…

Australian parents deserve a pat on the back. The vast majority (85%) say education is extremely or very important to their child thriving in life, according to Futurity Investment. But as household budgets are squeezed, some families are rethinking what a ‘good’ education involves. The majority (64%) of Aussie kids attend a public school. And those numbers could swell. According to research by the comparison site Finder, almost 20% of parents with primaryage children are contemplating moving their children from a private school to the public system to reduce their expenses, with 10% having already switched to a public school as living costs skyrocket. It’s not surprising. Futurity, which issues education bonds, says families can pay $195,000 to put one child through 13 years of K-12 schooling in the Catholic…

ANNETTE SAMPSON WHAT IF? WHY WOULD WE DO THAT? In Australia, most properties are sold through real estate agents who charge the seller a commission for their services. Fair enough. It’s that agent’s job to find a buyer at the maximum possible price. But if you are a buyer, that job is in direct conflict with what you want. While the real estate agent selling the property may seem helpful and friendly, they are not acting in your best interests. In fact, it would be a breach of their obligations to the seller if they were. Buyers, in the main, go through the demanding process of acquiring a property on their own, with assistance from a conveyancer only after the purchase has been made. Does this sound like an uneven…

ANTHONY O'BRIEN SMALL BUSINESS The small business community may be facing economic headwinds, but many owners are taking the view that ‘when the going gets tough, the tough get going’ by investing for future growth. NAB research shows that six out of 10 small and medium enterprises (SMEs) plan to invest more in the next 12 months. People, new products and technology top the lists. Krissie Jones, NAB executive for small business, says the research highlights Australia’s dual-speed economy, where many businesses continue to make considered investments to grow while others look to manage their way through higher costs and constrained consumer spending. “With higher interest rates and stubborn inflation, what we’re seeing is SMEs making smart investments in goods that help reduce their operating costs – important in the…

PAM WALKLEY REAL ESTATE When Australians think of buying an investment property, we automatically think of the residential sector: a house or an apartment. But there is another property universe, namely the commercial sector. And commercial real estate has many attractions, including higher rental returns, longer leases, regular rental increases and, in many instances, outgoings paid by the tenant – advantages not found in residential. Without doubt, a lot of commercial real estate is beyond the means of individual investors – think multi-storey office towers, big shopping malls and major warehouse complexes. If you want exposure to these, you need to either invest through a listed real estate investment trust (REIT) or an unlisted property fund. But individuals can access small commercial investments, such as storage units, car parking spaces…

ZACH RIAZ MANAGED FUNDS At the start of the year, we wrote to clients highlighting that a key investment theme for calendar 2024 would again revolve around gold. In 2023, the ASX-listed Gold ETF Global X Physical Gold was up 12.6% and at the time of writing it is up 28.2% year-to-date. The key theme driving this magnificent run is strong support from global central bank purchases and elevated global geopolitical tensions. Competition with crypto There was speculation in the market that as Bitcoin exchange traded funds (ETFs) started to emerge, gold might lose some of its demand as a safe haven as investors piled into cryptocurrency. However, the demand for gold, as reflected in its share price, has not abated. Additionally, the ASX-listed Global X Bitcoin ETF has been…

The bungled CHESS upgrade has caught the eye of regulators, with the Australian Securities and Investments Commission (ASIC) suing the ASX for allegedly making misleading statements about the progress of its project to replace its clearing and settlement system. In documents filed in the Federal Court in August, ASIC claims the ASX made misleading statements in February 2022 when it said its technology project remained “on-track for go-live” in April 2023 and was “progressing well”. ASIC also alleges those representations were misleading and deceptive because, at the time of the announcements, the project was not tracking to plan and ASX did not have any reasonable basis to imply the project was on track to meet future milestones. “ASX’s statements go to the heart of trust in the integrity of our…

SCOTT PHILLIPS BEST IN BREED SECTOR US STOCKS The past 12 months has been a very profitable time to be a stockmarket investor. Indeed, at the time of writing, the one-year return from the S&P/ASX 200, even before dividends and franking credits, was more than 18% – around double the average market total return. But if you’d been investing in the US? Well, the most-followed American index, the S&P 500, though admittedly lighter on dividends and without the benefit of franking, was up more than 33% in that same time. Both are extraordinary numbers. They are also, of course, unsustainable. Company profits are not growing anywhere near that quickly – here or there – meaning ongoing compounding at those rates would require rapidly expanding valuations… and that’s not going to happen…

NICOLA FIELD Contributor Our household recently welcomed Mimi, a six-week-old puppy, and while she is adorable, all efforts at toilet training are falling well short of the mark. To be fair, Mimi is a chihuahua, so her ‘accidents’ are small (thank goodness we didn’t get a mastiff). Even so, some days I’d be delighted to outsource the job of cleaning up after her. It wouldn’t be sh*t pay either, if you’re interested. Read Nicola’s story on getting a good education, page 50. CHRISTOPHER NIESCHE Contributor I outsource any job involving a hammer or a power drill to my teenage son or to a handyperson. This has saved me many trips to Bunnings. On the face of it, this might seem extravagant, but it’s actually a saving because it’s cheaper than…

The Australian Taxation Office’s recent tax determination on the deductibility of financial advice fees is a big win for financial advisers and investors. The ATO now recognises financial advisers as qualified tax relevant providers (QTRPs), which in turn supports the deductibility of upfront financial advice as it relates to tax advice. It is a game-changer for people looking for affordable financial advice. The previous ATO guidance on advice fee deductibility was almost 30 years old and it is pleasing that the ATO has made a number of other changes to update its examples and terminology, recognising the many changes that have occurred in the financial advice profession since 1995. This is a great result for financial advisers and their clients, and will help make financial advice more affordable for the…

MORE MONEY STORIES ON P46-60 Use of genetic testing results to be banned The Federal government will ban the use of predictive genetic test results in life insurance underwriting. Predictive genetic testing can be used to help identify the risk of individuals developing particular diseases or genetic conditions, including cancers. But because insurers assess the health of individuals to determine the premiums they pay – and whether they’re insurable at all – there was concern that predictive testing data could be used to discriminate against those seeking life insurance, total and permanent disability insurance, income protection insurance or trauma insurance cover. However, Stephen Jones, the Federal minister for financial services, says the government’s decision will ensure that people aren’t discouraged from seeking what can be life-saving support. “This change will…

With housing affordability at record lows, the Federal government’s Home Guarantee Scheme (HGS) is becoming key for first-time buyers. The Home Guarantee Scheme Trends and Insights Report from Housing Australia reveals that roughly one in three first home buyers were backed by the scheme in the past financial year. This represents a jump of more than a third (34%) compared with the previous year. The HGS comprises three schemes: the First Home Guarantee (FHBG), the Family Home Guarantee (FHG) and the Regional First Home Buyer Guarantee (RFHBG). Overall, it helps eligible buyers purchase with low deposits and without the need for expensive lenders mortgage insurance. Last financial year, the scheme helped 43,800 buyers, including 11,300 key workers, such as nurses and teachers, and more than 18,000 regional Australians. The assistance…

PAUL CLITHEROE Q&A Need Paul's help? Send your questions to: Ask Paul, Money magazine, Level 7, 55 Clarence Street, Sydney NSW 2000 or money@moneymag.com.au. Sorry, but Paul can’t personally answer your questions other than in the Q&A column. By submitting your question to Money, you consent to having your question and the response you receive from Paul published in the print and digital edition of Money. Sally wants to update the way her family investments are held. Tax is the big issue when splitting shares with siblings Q My two siblings have 30-year-old shares in one company which are meant to be split among the three of us. We would like to arrange this but are unsure what the best way forward would be. What would be the pros and…

STASH AWAY What is it? The Foldie Crossbody bag It’s designed for keeping valuables close at hand when you’re on the go, whether walking to the gate at the airport or struggling up the steps to a Greek villa. There are multiple pockets for cards and cash in the main compartment, plus a smaller pocket at the back for easy access. Card slots are lined with RFID protection to prevent microchips from being read by skimming devices, and the zipper on the main pocket can be secured with an anti-theft mechanism. Made out of a water-repellent twill polyester blend and weighing just 180g, the Crossbody can be easily folded and stored in a suitcase when it’s not in use. Cost: From $99.95 the-foldie.com.au ZONE OUT What is it? Sonos Ace…

Well, Andrew, I grew up in Griffith, so it’s always good to hear from people in the Riverina. I love your question as you’ve given me quite a lot of detail, meaning I can give you a better answer. I also enjoyed your sense of humour regarding one of the most awful financial assets, a car. First, I want to congratulate you on how you have articulated your financial position. It might work better if I send you my details and you can advise me! Seriously, though, you’ve done a great job. I particularly like the important finetuning, such as insurance to protect your girls and yourself, as well as the smaller things such as the Raiz account. You are all over the big stuff: maxing super contributions, a $1000…

The property market continues to defy expectations. With higherfor-longer interest rates, a challenging cost-of-living environment and constrained affordability, national housing values have hit fresh highs each month since November 2023. Ultimately, this has been driven by simple supply-and-demand economics; more demand for housing than available supply means upward pressure on prices. Despite the broad economic headwinds – interest rate increases may have tempered buyer enthusiasm, but they’ve done little to halt demand – almost two years of consecutive growth have been helped by migration patterns since the pandemic, a tight jobs market, which has buoyed mortgage serviceability, and the housing supply shortage. The expectation is that the national housing market will continue to see modest increases to the end of the year. And while there’s been a gradual slowdown in…

The legendary US investor Warren Buffett once said, “It’s only when the tide goes out, do you realise who’s been swimming naked”. Now that the US central bank, the Federal Reserve, has changed the investment tide by cutting interest rates for the first time in four years, it’s time for us all to reassess our investments, just as the professionals are doing. After the Fed cut rates by 0.5% on September 19 and mapped out plans to cut by another 2%, Australia’s sharemarket, measured by the S&P/ ASX 200, and the US market, tracked by the S&P 500, hit all-time highs. So, too, did the gold price, as these markets stand to benefit from lower borrowing costs. Lower interest rates not only reduce repayments but can also drive innovation and…

Long derided as a ‘barbarous relic’, gold bullion has been the quiet achiever among investment assets over recent years. Gold is often seen as a hedge against inflation and enjoyed a period of rising popularity during the sustained high-inflation era of the 1970s. It is also seen as a safe haven in times of geopolitical tension, rising when the drumbeats of war are heard in various hotspots around the world. So far this year, the precious metal has been rising despite an easing in global inflation. Having moved broadly sideways in the first few years of the Covid crisis, gold broke above $US2000 ($2924) an ounce late last year and by early September 2024 had reached $US2500 ($3654). Persistent geopolitical tensions in Europe, the Asia-Pacific and the Middle East is…

A few years back, I had a neighbour called Ben. Conservative, quiet, considered and generally warm and friendly, he also loved a nice vino. One night, Ben and I were solving the world’s problems over a bottle of the Granite Belt’s finest tempranillo, a wine so robust it could probably solve most of those problems on its own if we’d just let it. At one point, he leaned back and announced, “I’m thinking of investing $10,000 to $15,000 in the market somehow.” I nodded sagely and gave him my thoughts, which he dismissed almost as quickly as I voiced them. This was prudent given the context; mixing financial decisions with fermented grape juice isn’t always a solid strategy. I followed his journey over the next few months, partly out of…

VITA PALESTRANT SUPER What is the service at your super fund like? Does it follow your instructions and address any issues you may have in a timely manner? Mounting complaints – and growing member frustration – suggest otherwise, highlighting the need for super funds to lift their game. The Australian Financial Complaints Authority (AFCA) reports that fund members are increasingly approaching it directly rather than trying to resolve their complaints through their fund’s internal dispute resolution, suggesting members are either unaware of it or can’t get hold of the fund’s complaints team. Or it may indicate a complete breakdown in trust. The complaints that AFCA receives cover a wide range of problems, such as delays with rollovers and withdrawals, difficulty accessing online accounts or services, cancelled insurance, funds miscalculating fees…

Global X Physical Gold ETF (ASX: GOLD) A simple way to invest in physical gold, this is the largest and most liquid gold-backed exchange traded product in Australia and delivers investors returns mirroring the growth in the Australian dollar gold price. Perennial Strategic Natural Resources Trust The actively managed fund invests in listed and unlisted companies exposed to the resources industry. It can also invest in global shares (up to 20%) and unlisted shares (up to 20%), with most of the portfolio in Australian listed shares. It has exposure to commodities such as oil, gas, gold, uranium, lithium, rare earths and copper. Global X Bloomberg Commodity ETF (BCOM) This fund provides exposure to a liquid, well-diversified basket of hard and soft commodities that are significant for the world economy and…

MARCUS PADLEY THIS MONTH When a market goes up, almost every investment approach will work, and people like me can safely sell almost any old theory on how to make money in the stockmarket without being wrong. When the market goes up, there is room for all, for both value investors to set and forget and technical traders to trade because every theory works, no matter how deficient. A bull market will hide a lot of sins, and in boom times it will hide all sins, from black-box theories to mail-order DVD courses, to leveraged contracts for difference over forex, to active exchange traded funds that buy stocks going ex-dividend every month and present that as a value add while they return your capital in the background. A bull market…

Keep that 33% gain in US shares in mind, as I run through a selected list. Facebook owner Meta is up 90% over that same timeframe. Netflix has gained 87%. Amazon is up 43%, while shares in last year’s US Best in Breed, Berkshire Hathaway, are up 32%. Apple has gained 29% in that same 12 months. And don’t get me wrong; these are all wonderful businesses. I own Amazon and Berkshire, and I’m very happy to keep holding them. I wouldn’t argue with anyone who wanted to buy them today, either. But one notable omission from that list, up only 22% over the year, is search giant Google, these days known as Alphabet, which also sports a priceearnings ratio lower than the US market average. It’s not without its…

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