Two weeks ago, APRA told the banks that it no longer expects them to use a benchmark interest rate of 7.25% when testing an applicant’s borrowing capacity. Instead, they must add a buffer of at least 2.50% onto the loan’s interest rate. Given most home loan interest rates are in the 3’s, that could substantially …
The Australian and US share markets reached all-time highs at the end of last week. This is great news for superannuation returns and existing share investors. However, where will the markets go from here? When valuations are high, future returns will be low There is a strong negative correlation between the starting valuation multiple (e.g. …
I say “no” more often than I say “yes”. That is, I decline or defer the opportunity to work with more people than I agree to work with because, ultimately, I think it’s in their best interest. Not everyone is ready for tailored financial advice for lots of reasons as I discuss below. Products are …
Every few years The Economist magazine writes a story about how property in Australia is overvalued compared to other countries – or something to that effect. Comparing Australia with other countries is like comparing apples and oranges. Australia is just so different. But this difference creates opportunities for investors that play the long game. Let …
Over the past two years, I have highlighted how tight the credit (mortgage) market has become a couple of times. In the past, borrowing was simple. The bank would always offer you more than you wanted to borrow. You only had to provide a few documents and the money was yours! Things have changed dramatically. …
The ALP’s proposed ban on negative gearing has been well publicised and debated. However, its proposed changes to Capital Gains Tax (CGT) have received far less attention. I suspect that this is because investors tend to overestimate short-term consequences and underestimate more significant long-term outcomes. But, since most of us are long-term investors, I’d suggest …
Different professionals are able to give advice about a specific field – but who’s taking responsibility for looking at the big picture? How do you know if opportunities are slipping between the gaps? What if you have an issue/problem/question that bleeds over a few different fields? Firstly, it is important to understand the what different …
Understanding how property growth behaves is critical when making buy, hold or sell investment decisions. Unfortunately, I have seen lots of people make terrible decisions based on misinformation or misunderstanding. Therefore, if you are a property investor, you must understand this concept. And if you are an investor with a low asset base, you can …
“First rule of business is never get emotional about stock, clouds the judgment.” Gordon Gekko, from the movie Wall Street The quote above is from the fictional character, Gordon Gekko from the legendary 1987 movie, Wall Street. The challenge he was alluding to is the fact that it’s impossible to have a completely impartial lens …
The ALP announced on Friday (29/3/19) that it will ban negative gearing from 1 January 2020 if it wins the election next month. I wrote an article for The Australian newspaper over the weekend which addresses the steps property investors can take to fortify their investments (which I list below). A number of people have …
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