Author Topic: Australian Investing Thread  (Read 792232 times)

marty998

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Re: Australian Investing Thread
« Reply #550 on: February 02, 2015, 01:38:57 AM »
Reporting season kicks off this week. Expecting blood on the floor for several miners (BCI, MGX etc).

I hear UGL is in a spot of bother too.

CBA and TLS are the big ones to watch next week.

RBA board meeting tomorrow - I'll be astounded if rates are cut, they are already at 0% adjusted for inflation.

deborah

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Re: Australian Investing Thread
« Reply #551 on: February 02, 2015, 02:08:15 AM »
Thanks Marty!

DrowsyBee

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Re: Australian Investing Thread
« Reply #552 on: February 02, 2015, 08:47:05 PM »
RBA board meeting tomorrow - I'll be astounded if rates are cut, they are already at 0% adjusted for inflation.

Picked your jaw up off the floor yet, marty?

terrier56

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Re: Australian Investing Thread
« Reply #553 on: February 02, 2015, 09:04:16 PM »
RBA board meeting tomorrow - I'll be astounded if rates are cut, they are already at 0% adjusted for inflation.

Picked your jaw up off the floor yet, marty?

He's probably smiling still asx200 on track to hit 5700

DrowsyBee

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Re: Australian Investing Thread
« Reply #554 on: February 02, 2015, 09:10:41 PM »
RBA board meeting tomorrow - I'll be astounded if rates are cut, they are already at 0% adjusted for inflation.

Picked your jaw up off the floor yet, marty?

He's probably smiling still asx200 on track to hit 5700

Haha, and here I was thinking "I'll just see what's good after the Interest Rate decision" like a sucker. That'll teach me for timing the market.

FFA

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Re: Australian Investing Thread
« Reply #555 on: February 02, 2015, 09:17:36 PM »
RBA board meeting tomorrow - I'll be astounded if rates are cut, they are already at 0% adjusted for inflation.

Picked your jaw up off the floor yet, marty?

He's probably smiling still asx200 on track to hit 5700
onwards and upwards for shares and property it seems! but I can't help but feel a bubble is being stoked. hugely stimulative interest rates plus oil prices very low.

Central banks making further cuts to interest rates even because of the oil price fall. this feels a mistake to me, the oil price fall is a one-off temporary deflation effect. just let it pass. the oil price will stabilize and inflation return to norm in the next quarter. the overall economic effect of low oil is expansionary, so it shouldn't need a further monetary boost on top. Anyway let the party roll on for some time yet.

While I don't really "get it", i'm also smiling as it's lucky for me if it continues just a little longer.... I'm relocating back in the coming month and become a tax resident once again after a long time. I'll be most happy for a low AUD and high ASX in the next month, to boost value of money transferred back as well as the price of assets on return (deemed CG acquisition cost)...... fingers crossed !

potm

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Re: Australian Investing Thread
« Reply #556 on: February 02, 2015, 09:47:29 PM »
It's only a bubble if interest rates subsequently go back up, at this stage it doesn't look like that is happening any time soon!
When the music is playing, you have to get up and dance lol.

If the dollar keeps dropping to 60c, it might be time to think of moving overseas to work.

AustralianMustachio

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Re: Australian Investing Thread
« Reply #557 on: February 02, 2015, 09:57:08 PM »
Wow, well my investment account really liked the news. Hold local shares and international. A combination of rising ASX and falling AUD was positive all round.

Oh and still not planning on selling my USD ETF yet. Really liking that trade so far, and guessing it could go a fair bit further.

Thank you RBA?

dungoofed

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Re: Australian Investing Thread
« Reply #558 on: February 02, 2015, 10:33:07 PM »
For another Aussie expat view, VAS's increase is offset by the lower AUD so it makes no difference to me (except for the AUD I had bought in advance to hedge a move in the other direction - d'oh!)

US stocks bought before the US started tapering was the carry trade of the past few years.

FFA

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Re: Australian Investing Thread
« Reply #559 on: February 02, 2015, 10:50:56 PM »
For another Aussie expat view, VAS's increase is offset by the lower AUD so it makes no difference to me (except for the AUD I had bought in advance to hedge a move in the other direction - d'oh!)

US stocks bought before the US started tapering was the carry trade of the past few years.
hi dungoofed, I guess it depends what currency you define your portfolio / net worth in. I always measure in AUD despite living away more than a decade, because I knew i'd always head back one day and live long-term in oz. So the way I tend to look at it is VAS up increases net worth and AUD down helps increase money flow from income earnt overseas transferred back to oz.

hi potm, not necessarily saying we're in a bubble yet, but a bubble being stoked perhaps, agree keep dancing but stay on your toes....  "If the dollar keeps dropping to 60c, it might be time to think of moving overseas to work." -- just the opposite of what i'm doing ha, pls don't get me back into OMY paralysis again hahaha

dungoofed

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Re: Australian Investing Thread
« Reply #560 on: February 02, 2015, 11:10:54 PM »
LOL win-win!

Although if the goal is more dividend income from less investment then we really want VAS to go down in price. Net worth doesn't really mean much if you never plan to sell.

marty998

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Re: Australian Investing Thread
« Reply #561 on: February 03, 2015, 03:11:53 AM »
Blatch. Yes I am still sitting here like a stunned mullet. This is all getting a bit silly.

I kept laughing at the US/Euro dummies in charge of the central banks and their hairbrained wacky ideas behind zero or negative interest rates and printing stupid amounts of money.

Used to think the land of Oz was better than that. Now we are going down the same path.

What was the point of that decision from the RBA? Households have already got an injection into their budgets of the equivalent of 2 interest rate cuts from the falls in the price of petrol and electricity.

If these falls didn't happen over the last few months, it seems the RBA boffins would have you believe they would have cut rates by 75bps today!

As someone who personally benefits from lower rates, I still find it a slightly mad.

Watch for the dollar to collapse below 70, and head towards 60. Rest of the world will be moving to a tightening bias, whereas we are moving to an easing bias.

In some respects the chickens are coming home to roost. Our economy did not undergo the structural changes it needed to in 08/09 to remove the deadwood. It's happening now with falls in commodities back to more reasonable long term price trends, slowdowns in mining, sackings in manufacturing, etc.

Meanwhile, the US economy is abut 5 years ahead, having already gone through this phase.

If Abbott survives this week he will be gone by the end of the year. Budget will have to be tough, people will revolt, economy will get worse before it gets better

He could end up being dumped not because of unpopularity but because he'll be the first PM to preside over a recession in 24 years. How is that for irony for someone who campaigned on being a good economic manager.

my 2c rant fwiw

deborah

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Re: Australian Investing Thread
« Reply #562 on: February 03, 2015, 03:34:53 AM »
The NSW election is next month - what is your prediction for that Marty?

AustralianMustachio

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Re: Australian Investing Thread
« Reply #563 on: February 03, 2015, 08:31:56 AM »
Well on one hand people might say they didn't need to cut because the dollar is lower. But if they didn't cut, then the dollar might well have headed higher after it found support, as bond buyers etc. start becoming interested in our rates which are higher than the rest of the world.

Which is the main point IMO - our rates aren't high, but they are higher compared to the rest of the world, and that's what can have an effect.

On Abbott / the budget - people seem to have this vague idea that "Liberals must be good with the economy" and it is completely baseless. I for one am not surprised at all that Abbott hasn't turned out to be an economic genius. This satirical article pretty much summarises my thoughts whenever someone touts out that tired old cliche:

Quote
"This REACHer constantly rails against, “Labor’s mess” that left Australia the economic envy of the world wreck that it is.  Like a harpy, the REACHer screeches “deficit” up and down the hallowed halls of sandstone universities everywhere, never actually explaining why the deficit’s a bad thing, but ready to sputter, “because we’d end up like Greece” when pressed. “Well, if you put it like that…” you may wonder, “how then do we avoid ending up like a country bankrupted by the government allowing massive corporate tax evasion to happen?”. “By electing a government that allows massive corporate tax evasion to happen” is their chin-raised response. It’s as logical as this REACHer’s announced relationship status on Facebook with a woman far less groomed than he is, followed by the next status update about being about how much he loves, “The Real Housewives of Melbourne”."
http://www.sbs.com.au/comedy/article/2015/01/30/how-aspirational-class-are-voting-wrong-party
« Last Edit: February 03, 2015, 08:36:31 AM by AustralianMustachio »

dungoofed

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Re: Australian Investing Thread
« Reply #564 on: February 03, 2015, 01:41:56 PM »
LOL

Ok this thread is bordering on getting political. I'm fine with that because, well, I'm Australian and love to talk politics as much as the next bloke/sheila but I just thought I'd point it out because I don't want this thread to lose it's status as possibly the best "Australian Investing Thread" on the Internet right now.

With that out of the way, I wanted to talk about two things unique about the Australian economy: deficit = bad, surplus = good mantra, and whether we squandered the biggest resource boom since the 1800s.

(unfortunately I haven't got much time so will just lay it out there and come back later to clean up the mess. I'll try and tie it in with the rate cuts and what the politicians are trying to do here)

So basically, during the 90s we had this budget surplus AND a strong economy. Unfortunately people fallaciously assumed that the budget surplus was the cause of the strong economy and the politicians of the time (happened to be Howard government but could have been anyone) did nothing to dispel this myth. The reality is nothing is confirmed in this regard, and if anything the Keynsians are currently in the lead with their "government deficit spending helps prop up the economy in times of softness." Anyway, what that means is that the Australian public who lived through the 90s, hearing that we now have a budget deficit, are concerned that this means the economy is in the shitter. But even worse are the politicians who are happy to run with this in order to implement their policies, cut budgets, etc.

The reality, as Marty pointed out, is that we are finally consolidating and clearing out the inefficiencies in the Australian markets, something which the US did back in 2008 (banks being the major exception), while Europe and Japan still refuse to go through this process. Even so, lowering rates yesterday is a sign that the government is somewhat committed to propping up certain industries in the short-to-medium term, in particular exporters.

Secondly, as you know we have just come out of a massive resource boom, the likes of which only come around every 200 years or so. I'm trying to find the details of the last one but from memory it was like a wheat or wool boom or something in the 1800s. The rough question I want to ask is "did we squander it?" but a more appropriate question might be "should we have created a sovereign wealth fund from the spoils?"

Lets look at OPEC nations quickly. They realise that they have this finite resource underneath desert. Once that is gone they're basically fucked. But for now the going is good! So they're happily exploiting their natural resources and buying up huge parts of the world economy. So that one day when they run out of oil the country should in theory be able to just live on the dividend cheques for the rest of eternity.

An example more similar to Australia might be Norway, who found massive oil deposits nearby and decided "the spoils of these resources belong not just to us but to all future Norwegians" and set up a similar sovereign wealth fund.

I naively googled "Australia's sovereign wealth funds" recently expecting to find a massive list of different ways we have been putting away money for the future, making sure the natural spoils of our country have been well managed, setting some aside for future generations.

Anyone who has done the same google search knows where this is heading. There are like two - one is a Western Australia-only fund, and the other is this piddly little education fund that I think Howard set up.

Ok so then what happened to the massive windfall that we no doubt received from this resource boom?? Besides making mining magnates into politicians and either fatter (in the case of males) or uglier (in the case of females and Palmer).

Well, we basically propped up the middle class for about eight years. We didn't let swaths of home owners experience default on their loans by keeping unemployment more or less constant (I'm comparing with the US in this case. Bear with me). In the end, this is what we have to show for it. Not a constant stream of dividends from the greatest companies in the world, as we would have had if we directed the cream from the mining boom into a sovereign wealth fund.

Now, whether this was a good use of opportunity will remain a question for the ages, and is academic now. For me, without a home, the thought of home ownership is even more of a far off dream these days than it was 10 years ago. But more importantly, we still have all these inefficient businesses in our economy. Marty mentioned it above, the impending recession is something that the US got over and done with quickly, whereas Australia has chosen to do it a little differently. Is this better or worse? Who knows. What I do know is that my strategy doesn't change - continue to purchase assets classes which are currently undervalued, and assume that in the end it will all revert back to the mean.

AustralianMustachio

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Re: Australian Investing Thread
« Reply #565 on: February 03, 2015, 05:16:56 PM »
On the sovereign wealth fund idea - it sounds cynical, but I think the reality is most Australians either aren't economically savvy enough or forward thinking enough, to have wanted to set something like this up.

http://www.theguardian.com/commentisfree/2014/sep/04/oil-tax-norway-could-teach-australia-a-thing-or-two-about-managing-wealth

AustralianMustachio

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Re: Australian Investing Thread
« Reply #566 on: February 03, 2015, 05:19:02 PM »
But I agree, amusing political points aside, let's not diverge too much from the original excellent thread. My next post will once again be investment related. Come on 6000 on the ASX200!

dungoofed

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Re: Australian Investing Thread
« Reply #567 on: February 03, 2015, 06:04:38 PM »
On the sovereign wealth fund idea - it sounds cynical, but I think the reality is most Australians either aren't economically savvy enough or forward thinking enough, to have wanted to set something like this up.

http://www.theguardian.com/commentisfree/2014/sep/04/oil-tax-norway-could-teach-australia-a-thing-or-two-about-managing-wealth

Thanks for ruining my morning. Seriously feel like crying after reading that.

potm

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Re: Australian Investing Thread
« Reply #568 on: February 03, 2015, 10:16:55 PM »
While we're all celebrating rising wealth from higher asset prices, for the majority of us still in the accumulation phase, lower interest rates and higher asset values will make it hard for us to accumulate wealth as returns on investments will be lower.
Investors have benefited greatly from the reduction in interest rates from highs of 17% on rising asset values. Unfortunately we're approaching a point where it can't go much further (although negative interest rates in the euroland?!) so all the easy gains will be gone when we have reached that point. If interest rates ever reverse their course then it will have the opposite affect on asset prices. Things could go a lot higher first though and who knows how long interest rates will stay low.


FFA

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Re: Australian Investing Thread
« Reply #569 on: February 03, 2015, 10:51:55 PM »
It's getting trickier this year for sure, it's never easy though. I think the market presents a conundrum for all, not just accumulators. I guess many retirees who had hoped to bank on 5% interest rates (as used to be the norm) are pushed to take more risk for their income too.

I'm certainly concerned about complacency, excessive monetary stimulation (globally, not just Australia) and how all this QE will finally resolve. Eurozone and Japan looks as fragile as ever (what's the next step after QE, in case that fails too??). India is a brighter spot these days and China seems to land softly, so far. But really it seems the world is once again riding on the back of the US. Can it keep up the momentum against a rapidly rising USD though?

Anyway for now the trend is certainly onwards and upwards. Don't fight the central banks, as they say!

For my portfolio, i'm glad to have discovered and adopted the boglehead way recently. So am not worrying too much about all of the above, just trying to focus on what i can control and keep my asset allocations at the targeted levels.... A lot less stressful this way :)

pancakes

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Re: Australian Investing Thread
« Reply #570 on: February 04, 2015, 03:54:06 AM »
I'm subscribing because I want to follow along.

I still need to go back and read over from page 1 so maybe this has been covered but I'd love to hear how some of the more experienced posters got started.


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« Reply #571 on: February 04, 2015, 04:04:22 AM »
Quote
"Australia's sovereign wealth funds"
dungoofed, you should have found the Future Fund, which has  $105bn, plus the EIF, BAF, and HHF, making $115bn in total.
http://www.futurefund.gov.au/

dungoofed

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Re: Australian Investing Thread
« Reply #572 on: February 04, 2015, 04:55:27 AM »
That Future Fund is funded by taxes to pay the superannuation obligations of civil servants. Not quite what I was referring to (but probably prudent nonetheless. And I don't know how I missed it).

I hadn't heard of those other three - thanks.

MammaStash

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Re: Australian Investing Thread
« Reply #573 on: February 07, 2015, 06:40:43 PM »
Hi Aussies!
Very happy to find this thread. I have a lot of learning to do. Will be reading from start along with other investing reading over the next couple months.

In theory I'll be receiving a lump sum to invest sometime later this year and I need to get it right.

I take from what I have read so far you are all pretty happy with the Aussi Vanguard eft products? I'll have some specific questions later - have been a little confused about the range of options.

So pleased to see Aussie discussion - our retirement, taxation and fx issues are so diff than US it's good to get some local thoughts and references.

Stash on :-)
Mamma
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FFA

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Re: Australian Investing Thread
« Reply #574 on: February 08, 2015, 07:38:04 PM »
In theory I'll be receiving a lump sum to invest sometime later this year and I need to get it right.

I take from what I have read so far you are all pretty happy with the Aussi Vanguard eft products? I'll have some specific questions later - have been a little confused about the range of options.
Hi MammaStash, i'm only a recent investor in VAS/VTS/VEU etf's, but happy so far. From what I could see vanguard is lowest cost (although blackrock ishares not far behind) and that was a key factor. Liquidity or buy/sell spread could be better, but if you're a buy and hold (possibly forever) investor then it doesn't matter much really, lower cost is more important.

For lump sums, assuming you've decided the desired asset allocation, then the other key consideration is timing, whether you go in all at once, or dollar cost average (DCA) to smooth out purchase level. Which depends on the size of the lump sum relative your overall portfolio, and your risk tolerance/psychology. Based on your comment "need to get right", I suggest you consider DCA approach as a safer option. It's a very tough task to pick a single day when markets are at good value, especially if there's a lot of pressure riding on it...

DrowsyBee

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Re: Australian Investing Thread
« Reply #575 on: February 08, 2015, 07:50:15 PM »
Does anyone here see any benefit in buying both VGS and VTS, or is it just a waste of time to get exposure to the US market twice?

marty998

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Re: Australian Investing Thread
« Reply #576 on: February 08, 2015, 08:22:24 PM »
That Future Fund is funded by taxes to pay the superannuation obligations of civil servants. Not quite what I was referring to (but probably prudent nonetheless. And I don't know how I missed it).

I hadn't heard of those other three - thanks.

Yeah it's not quite a sovereign wealth fund in the conventional sense. It's money set aside to pay for Commonwealth Public Servants's defined benefit obligations.

Most of the money in the future fund was raised from the sale of Telstra.

There are currently 3 other "satellite" funds: Building Australia Fund (BAF), Health and Hospitals Fund (HHF) and Education Investment Fund (EIF). These are funds set aside to pay for major capex requirements. Labor appears to be opposed to BAF, HHF and EIF on the basis that if the money is there it should be spent (think they ran down the capital quite quickly out of those funds when in office). Long term planning is not a strong suit for them.

It's probably about time that capex was removed from the federal budget income statement (surplus/deficit argument), but no, all capex is "expensed" in the year incurred, which always makes the current year look worse than it should.

A Disability Care Fund for the NDIS and Medical Research Fund are in place (or will be in place pending passing of budget measures?)

ASX is having a down day today. After 12 days straight of gains it was probably due. Valuations looking a bit stretched on forward P/E basis.

dungoofed

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Re: Australian Investing Thread
« Reply #577 on: February 08, 2015, 10:46:34 PM »
Does anyone here see any benefit in buying both VGS and VTS, or is it just a waste of time to get exposure to the US market twice?

There are a number of differences between the two - treatment of dividends, MER and global diversification come to mind immediately.

If someone held VTS and were thinking instead that VGS would be better for their international exposure then unless it was in their super I'd tell them not to bother selling their VTS, just start accumulating VGS. But that's me.

Top 10 holdings the only notable omissions from VTS are Nestle and Novartis. Fantastic companies I'm sure but I wouldn't lose any sleep just because I was more exposed to the American versions.


dungoofed

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Re: Australian Investing Thread
« Reply #578 on: February 08, 2015, 10:51:28 PM »
& thanks again Marty. See, why wouldn't the government issue bonds for major capex projects, and use tax money from mining to purchase VGS or equivalent? Anyway, it's got me wanting to watch The Dish again.

MammaStash

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Re: Australian Investing Thread
« Reply #579 on: February 09, 2015, 05:07:25 AM »
Thx FFA. Good point re dca. Rest of portfolio is pathetic! So I need to try to get best start.

I'll be watching this thread as I read up and work out my choices. Thx all :)
Better late than never...

FFA

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Re: Australian Investing Thread
« Reply #580 on: February 09, 2015, 08:14:42 AM »
Does anyone here see any benefit in buying both VGS and VTS, or is it just a waste of time to get exposure to the US market twice?
usually vts is paired with veu to give global shares, in a ratio of 45/55% or thereabouts to roughly match relative mkt caps. There will be a small overlap with your oz shares as veu also includes oz, but it's small.

Since vgs was recently introduced you can have a single etf for global shares ex oz, so it's a neater and more practical solution. However as dungoofed mentioned diversification is less in vgs with approx a quarter of the companies indexed versus vts/veu combined. Vgs mer appears higher on the surface but Im not sure it's that much different after adjusting for withholding taxes.

Hope this helps.

marty998

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Re: Australian Investing Thread
« Reply #581 on: February 09, 2015, 02:24:11 PM »
& thanks again Marty. See, why wouldn't the government issue bonds for major capex projects, and use tax money from mining to purchase VGS or equivalent? Anyway, it's got me wanting to watch The Dish again.

Because Tony Abbott says debt is bad. Labor tried to do that with NBN. They set up a separate company which borrowed to fund most of the capex.

The Liberals screamed blue murder about it and said that all the debt borrowed by NBN should be listed as an expense in the budget and added to total debt on the government books.

They conveniently forgot to mention that whilst NBN Co would have ended up with $40billion debt, it would also have a $40 billion asset, worth even more as more households connected to it.

Of course if Labor had been allowed to complete it, I would have no doubt the Liberals would have privatised it at the earliest opportunity, and claimed the sale proceeds as a "surplus".

MMMaybe

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Re: Australian Investing Thread
« Reply #582 on: February 09, 2015, 08:31:35 PM »
I'm watching the USD/AUD rate closely as I am hoping to transfer money to Aus. What do you think will be the tipping point for the AUD to start heading down to 70 and below? Seems pretty firm at 78c for now.

bigchrisb

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Re: Australian Investing Thread
« Reply #583 on: February 09, 2015, 09:26:59 PM »
I'm watching the USD/AUD rate closely as I am hoping to transfer money to Aus. What do you think will be the tipping point for the AUD to start heading down to 70 and below? Seems pretty firm at 78c for now.

When the moon is full in Sagittarius?

I'm terrible at forecasting currency.  My gut feel is that there has been an awakening in the last couple of months about Australia softening, including from the RBA - hence the rate cut.  However, there is a fair likelihood that its pretty priced in already.

Given that its a whole lot better than it used to be, why not take a dollar cost averaging approach and spread your transfers over a period of time, rather than trying to time the currency market?

FFA

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Re: Australian Investing Thread
« Reply #584 on: February 09, 2015, 09:29:42 PM »
I'm watching the USD/AUD rate closely as I am hoping to transfer money to Aus. What do you think will be the tipping point for the AUD to start heading down to 70 and below? Seems pretty firm at 78c for now.
Hi Francesca, personally I've given up trying to predict FX.... suggest you try not to watch the chart too closely, I find the closer I watch the more I get confused! Please also don't completely discount the possibility that it could go the other way too. Certainly it would be against most forecasts and expectations, but forecasts are not so reliable from what I can tell...

I guess the above is not what you're looking for, so let me add : If I was still trying to predict FX, I would be keeping an eye on the relative interest rates (any hint/speculation of further RBA cut to 2% will greatly help your objective, and if the Fed keeps on track for lift off around mid year, which seems a reasonable bet after the strong jobs number recently), and commodity prices (if they stabilize/rebound it could spur some recovery on the AUD and go against you).

I would second bigchrisb's suggestion to dollar cost average your transfer if possible/practical.

dungoofed

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Re: Australian Investing Thread
« Reply #585 on: February 09, 2015, 10:28:20 PM »
As one of the most qualified people around here to answer this I'm still going to give you the "correct" answer: keep your money in the currency in which you are going to spend it.

The people making money on currency trades are the ones moving 10s of millions each time the market moves (and they're getting squeezed out these days too). You're welcome to keep it in USD and try to time the market but please just recognise it for what it is ie speculating.


AustralianMustachio

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Re: Australian Investing Thread
« Reply #586 on: February 09, 2015, 10:28:49 PM »
To the poster who asked about the vanguard funds and buying VGS and VTS.

I think it's simpler to have VTS with VEU (and these ETFs came out at a similar time), or get VGS/VGAD with VGE (emerging markets). Obviously if you do the latter you need to think about how much you want to allocate to emerging markets and probably weight VGE much lighter.

Second what dungoofed said about if you already have one, just start buying the other, rather than selling

& thanks again Marty. See, why wouldn't the government issue bonds for major capex projects, and use tax money from mining to purchase VGS or equivalent? Anyway, it's got me wanting to watch The Dish again.

Because Tony Abbott says debt is bad. Labor tried to do that with NBN. They set up a separate company which borrowed to fund most of the capex.

The Liberals screamed blue murder about it and said that all the debt borrowed by NBN should be listed as an expense in the budget and added to total debt on the government books.

They conveniently forgot to mention that whilst NBN Co would have ended up with $40billion debt, it would also have a $40 billion asset, worth even more as more households connected to it.

Of course if Labor had been allowed to complete it, I would have no doubt the Liberals would have privatised it at the earliest opportunity, and claimed the sale proceeds as a "surplus".

+1

DrowsyBee

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Re: Australian Investing Thread
« Reply #587 on: February 10, 2015, 12:22:22 AM »
Thanks guys. At the moment I have VGS, VAS and VAP. I was thinking of building on the VGS by having an international portfolio that is made up of VGS, VGAD, VGE and VTS.

I read someone in this thread saying they thought it was a good idea to have a small proportion of the hedged VGAD with a larger proportion of VGS. But I also wanted a bit more exposure to the US market and get a small proportion of VGE in there.

From what I gather, however, this might be a weirdly complex way to have index funds.

AustralianMustachio

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Re: Australian Investing Thread
« Reply #588 on: February 10, 2015, 12:59:55 AM »
If you can keep your ratios clear so you can stick to them easily, and it's not overly complex to you, then go for it

DrowsyBee

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Re: Australian Investing Thread
« Reply #589 on: February 10, 2015, 01:21:17 AM »
Haha, should have known the answer would be the old mustachian belief of "dude, if it works for you, just do it however you want".

FFA

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Re: Australian Investing Thread
« Reply #590 on: February 10, 2015, 01:21:53 AM »
If you can keep your ratios clear so you can stick to them easily, and it's not overly complex to you, then go for it

+1. Definitely strive for simple, practical and consistent

Personally, I like to start with the high-level AA which is to decide what percentage domestic vs global shares. I feel this is the most important thing to get right.

After that, I view it as second order optimization to tweak the global share exposure : US vs non US; developed vs emerging; hedged vs unhedged. I get a sense most people focus on the first two, but I actually am more keen on the hedging component. The logic being most default portfolios are skewed towards domestic market, in part to minimize FX risk. Given the small scale and lack of diversity in the ASX, I would prefer to have a larger weight on global shares (in the first order AA mentioned above). So including a global (hedged) allocation intends to strike a compromise between these issues.

FFA

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Re: Australian Investing Thread
« Reply #591 on: February 10, 2015, 01:27:00 AM »
Haha, should have known the answer would be the old mustachian belief of "dude, if it works for you, just do it however you want".

I also came around to this view that what you do finally is not so critical. The important part is to make sure it's compatible with you (risk tolerance, beliefs, etc) and that you stick to it rigidly (rebalance). The first part (compatibility) greatly improves the chances of the second part (discipline).

Wadiman

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4% SWR for Aus?
« Reply #592 on: February 10, 2015, 04:21:32 AM »
Not sure how many of you have seen/read this but it is brilliant! 

http://www.finsia.com/docs/default-source/Retirement-Risk-Zone/how-safe-are-safe-withdrawal-rates-in-retirement-an-australian-perspective.pdf?sfvrsn=2

Long and short of it - the 4% 'heuristic' is not too bad for Aus.  Interesting data re asset allocation results vs portfolio failure over time.

Got it off the Whirlpool forum which I know some of you check out from time-to-time

deborah

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Re: Australian Investing Thread
« Reply #593 on: February 10, 2015, 04:49:04 AM »
Wadiman you are a ledg!

Ozstache

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Re: Australian Investing Thread
« Reply #594 on: February 10, 2015, 05:49:14 AM »
I read that finsia paper in detail yesterday and was going to post something up about it. Wadiman beat me to it!

I agree that it starts out giving the 4% rule a good run for its money in an Australian context, but gee it gets pessimistic in the final few pages of the report. I was half expecting finsia to finish it up with how finsia financial advisors can help you navigate the stormy 4% waters, but it peters out before it gets to that. Still, some pretty good guff in there for us Aussies (and New Zealanders, Japanese, Italians and the Dutch).


« Last Edit: February 10, 2015, 05:51:14 AM by Ozstache »

Minion

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Re: 4% SWR for Aus?
« Reply #595 on: February 10, 2015, 03:02:43 PM »
Not sure how many of you have seen/read this but it is brilliant! 

http://www.finsia.com/docs/default-source/Retirement-Risk-Zone/how-safe-are-safe-withdrawal-rates-in-retirement-an-australian-perspective.pdf?sfvrsn=2

Long and short of it - the 4% 'heuristic' is not too bad for Aus.  Interesting data re asset allocation results vs portfolio failure over time.

Got it off the Whirlpool forum which I know some of you check out from time-to-time

Thanks for this. Can you add the Whirlpool thread link too please?

Wadiman

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Re: Australian Investing Thread
« Reply #596 on: February 10, 2015, 07:02:11 PM »
Here you go:

http://forums.whirlpool.net.au/forum/150

The discussions range from very insightful to humorous!

MsRichLife

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Re: Australian Investing Thread
« Reply #597 on: February 10, 2015, 11:13:51 PM »
Thanks for the link to that report Wadiman. Certainly some food for thought. Other members of the broader forum may well benefit from reading this, especially given the view that the 4% rule is sacrosanct.

Wadiman

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Re: Australian Investing Thread
« Reply #598 on: February 11, 2015, 02:26:41 AM »
Good suggestion - will post seperately in this category

dungoofed

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Re: Australian Investing Thread
« Reply #599 on: February 12, 2015, 03:23:18 PM »
Looks like Betashares' QUS slipped under my radar among all the Medibank IPO hysteria (congratulations anyone who speculated on that btw, it has increased nicely since float). Basically a US version of their QOZ ie weightings based on RAFI instead of market cap.

http://betashares.com.au/products/name/ftse-rafi-u-s-1000-etf/

0.30% MER, also it's not a cross-listed ETF so no US tax forms. Nothing in the holdings that gives me heart burn (ok, maybe 1.5% in Apple heh).