April 28, 2016

The volatility trap

The degree of sharemarket volatility during the first three months of the year will regrettably have thrown some investors off their long-term course. Let’s briefly recap by looking at the broad S&P/ASX 300. The index opened at 5249.10 on the first trading day of the calendar year but within three days had fallen below the much-watched 5000-point level. The see-sawing index managed to finish the quarter above the 5000 mark at 5043.63 after a spurt on the last day of March. It was down 3.91 per cent for the quarter. Investors who allow such abrupt short-term movements on the markets […]
April 21, 2016

A different “End of Financial Year Sale”

As June 30 fast approaches, there is still time to consider the strategies available to you this financial year to build your wealth, some of which are discussed below. Paying interest in advance Borrowing to invest is a tax-effective means of wealth accumulation – investors borrow for investment purposes, and claim the interest on the borrowed funds as a tax deduction. This strategy is consistent with many investors’ objectives as it allows you to purchase property, shares, or any other asset that generates assessable income. It also enables you to bring forward and pay next year’s interest cost and claim […]
April 14, 2016

Do investment principles stand test of time?

Time travel is a skill that would dramatically transform the world of the investor. Sadly, despite all the technological advances of the past two decades, the ability to go back or forward in time remains the realm of science fiction novels, not a killer app on an investor’s smartphone. While time travel may still be the domain of TV and film producers the passage of time is a real-world test for investment ideas even if – as we are constantly reminded – history is not a great predictor of future returns. Twenty years ago the movie Shine with Australia’s Geoffrey […]