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Interest Rates, Local interest rate discussions
mullokintyre
post Posted: Aug 12 2019, 10:25 PM
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In Reply To: nipper's post @ Aug 12 2019, 09:16 PM

As both the missus and myself are in pension phase in our SMSF, we don't pay tax of any kind.
Seems a bit ridiculous, maybe even unfair, but there it is.
My accountant pointed me to this URL Capital Gains Tax
Buying and selling like there is no tomorrow.


Mick



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sent from my Olivetti Typewriter.
 
nipper
post Posted: Aug 12 2019, 09:20 PM
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In Reply To: nipper's post @ Aug 12 2019, 09:16 PM

There's a lot of shouting from the rooftops
QUOTE
Brace yourself for a global downturn and stock market crash

You cannot solve the problems of debt with more debt. And central bankers, well-meaning and desperate as they might be to offset the damage caused by an erratic US president, can’t create real growth; they can only move money around. At some point, the markets and the real economy must converge.

https://www.afr.com/markets/equity-markets/...20190812-p52g4o
..... or
QUOTE
In the Alice in Wonderland world of relative return and negative yielding bonds, a zero yield is very attractive.

I can’t believe I just wrote that, but I did.

For a long time global institutional managers have not entertained the prospect of buying gold because it has a zero yield.

It has no coupon and offers no dividend.

Today, a zero yield is ravishingly attractive, relatively speaking!
it might even go up



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Aug 12 2019, 09:16 PM
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In Reply To: mullokintyre's post @ Aug 12 2019, 09:10 PM

So, Mick, you sold some, triggering CG. And then back in.

(and I picked up some PMGOLD and GDX today. Couldn't work out which was better, so I went in for both. )



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Aug 12 2019, 09:10 PM
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In Reply To: nipper's post @ Aug 12 2019, 07:47 PM

QUOTE
so, what're you going to do?


Buy more gold.
Mick



--------------------
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nipper
post Posted: Aug 12 2019, 07:47 PM
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QUOTE
Consternation rippled through the global client list of the Swiss-based UBS private bank in recent days as the world’s biggest wealth manager ruefully explained that getting nothing in the way of interest was no longer the worst of it … the bank would now be charging its clients for storing their fortunes.

Bizarre, but eminently logical, the Swiss private banks are facing negative interest rates from their own central bank and under that scenario non-interest income is suddenly the only revenue earner in town.

Institutional investors such as insurance companies have been enduring the losing proposition of negative interest bonds for years now, but the Swiss development is the first time individual investors (admittedly at the top end) are grappling with the stark reality of zero rates.

“It’s remarkable, but it is the outcome of central bank settings and it is absolutely possible it will spread further through the banking system,” says Steve Mickenbecker, of Canstar. “Look at our own market, we have online cash rates among the major banks of 0.15 per cent: There is no more room there to cut again, yet the predictions are that more official cuts are coming down the line."

... so, what're you going to do?



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
early birds
post Posted: Jul 5 2019, 10:01 AM
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https://www.afr.com/markets/equity-markets/...y_Sent=05072019


They also claimed low rates are simply unfair. As of Tuesday, the Australian cash rate is at a record low 1 per cent and the Reserve Bank has agreed it could keep cutting "if needed".

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does it make sense ???? YES !! would RBA listen to him??? NO!!

IT IS A FASHION AROUND WORLD CENTRAL BANKS THESE DAYS!!!!!



 


nipper
post Posted: Jul 2 2019, 02:57 PM
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QUOTE
Reserve Bank has cut official interest rates by 0.25 percentage points to a new record low of 1 per cent, in the second consecutive cut in a month.
- we're in trouble



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: early birds  
 
early birds
post Posted: Jun 18 2019, 10:59 PM
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https://www.cnbc.com/2019/06/18/ecb-preside...a-portugal.html

on Tuesday, saying that it could cut interest rates again or provide further asset purchases if inflation doesn’t reach its target.
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WYF ...soon all of them will run out of bullets i guess..
""" do whatever it takes""" ehhh?? lmaosmiley.gif

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https://www.cnbc.com/2019/06/18/trump-rips-...-for-years.html
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“They have been getting away with this for years, along with China and others,” Trump said in a tweet, noting a weaker euro would make it “unfairly easier for them to compete against the USA.”
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but market still rallying , they are not scared anymore from drump's tweets???? lmaosmiley.gif


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nipper
post Posted: Jun 18 2019, 07:23 PM
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QUOTE
The Reserve Bank says further interest rate cuts are likely, with minutes from the bank's last board meeting revealing a more dovish tone in monetary policy. The bank said the spare capacity in the economy meant that stronger wage growth and increased inflation were still some way off and that further rate cuts from the current low of 1.25 per cent would be needed to stimulate the economy and employment.

In the wake of the RBA minutes from the first rate cut in almost three years, the Australian dollar immediately lost ground, falling 0.2 per cent and with some economists suggesting the chance of a rate cut next month was still "live". "Given the amount of spare capacity in the labour market and the economy more broadly, members agreed that it was more likely than not that a further easing in monetary policy would be appropriate in the period ahead," the minutes said.

The board minutes also reveal the bank is less concerned with how lower interest rates could fuel more borrowing and higher risk taking. "A decline in interest rates was unlikely to encourage a material pick-up in borrowing by households that would add to medium-term risks in the economy."
- weaker until implosion time



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jun 14 2019, 11:40 AM
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In Reply To: mullokintyre's post @ Jun 11 2019, 05:48 PM

QUOTE
...the big question is, to what exactly do we put our millions into??
Already got enough illiquid property.
It really only leaves the share market left.
I wonder how many other folk in a similar situation will take the same route?
and jacsar said
QUOTE
my approach..

Here's mine (in for a penny, in for a farthing): Without knowing too much, and making a few assumptions....... I've notice everyone pays the same at the supermarket, the petrol pump, the coffee shop. In other words we all need a fixed amount to get by on, a basic wage, a pension amount, and then the rest is discretionary. Investments, a roof over my head, play money, Maslovian aspirations. The issue you raise, about a return on cash, is only going to get worse. I mean, for a Million Bucks, this will, if invested with absolute surety, generate under $20K pa, which is less than Centrelink. Better returns are elsewhere, where the risk lies.
Based on the mantra of not wanting to find myself in a position of not wanting to sell good assets at bad times, I have looked to generate as much as possible as safely as possible, by putting 25% in Bonds and the rest in the market. Not just any bonds, but Indexed Annuity Bonds (JEM, Civic Nexus, Novacare, PJS, ANU), etc. As a rule, these are Investment Grade, long term and throwing off about 8-9%pa. How, you may ask? An IAB usually pays quarterly, a mix of coupon (interest) and capital. The coupon is generally expressed as CPI + margin, and I'm getting 3-4% there; the capital depends on the duration. Most IABs mature 2030-2035 so over the life of each, capital is returned over the years such that at maturity, there is $0 residual. IE it has paid down, and this has the added benefit of reducing exposure (derisking) over the life of the IAB.

Then, apart from the family home, it's all shares. No managed funds but, like balance says, diversification where fees are low, spread approx equally Domestic and International. No more than 10% in any one holding. And a risk bucket of 10-15% exposure in the pointy end, more actively traded (in SMSF, which helps with CGT considerations).

And gearing doesn't work IMO. All those projections, they miss one essential element that interest paid is cash foregone and thus investment opportunity lost.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: mullokintyre  tombeet  early birds  
 
 


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