Where to Invest Once Interest Rates Start Going down? (2025-2030?)

James Tabby on 20/08/2024 - 15:59

This time it is not as clear as the last boom-bust cycle because China is slowing and is basically on the brink of collapse with many people being made to repay their government salaries (are you shocked?). The Australian economy is vulnerable with the mining sector being in a precarious position which has been noted by the RBA.

Australian Housing seems quite bubblish compared to previous cycles but risks remain as a lot of low cost steel is being dumped from China and if the Ukraine conflict ends there could be additional shocks as Russian wooden engineering beams could come flooding the market.

Ultimately, there are concerns that apartment prices could collapse significantly as temporary migrants disappear and construction costs come down sharply. My preference is to avoid further investment in housing unless you are doing property development, but what are your insights?

Which sectors are best suited for investing in light of the current upcoming conditions? Of course leaving it in the bank at 2% rates is not acceptable if ANZ's actions hint where the bottom will be. Let's assume we have a reasonable amount to invest such as $800k to cover a broad range of strategies and a 5 year time horizon before the next possible round of interest rate hikes.

Since 2030 is coming up, are there any other unusual investments that could pay off, i.e. sustainable investments?

I am skeptical of whether Australia can come out of this next crash unscathed, and the next one might be so severe that it will put the US recession to a shame because of our excessive dependence on China. China is building more coal power stations, but they are burning less coal, with even less coal consumption to follow as more manufacturing is leaving the country. That production is being moved to more renewable friendly countries in south/south east Asia and the whole region is building out their renewables infrastructure collectively at a faster rate than China by itself could. This is because of the larger amount of space available across the Asian continent which means more solar/wind projects overall as every country in Asia joined onto the 2030 Agenda. Many other countries like Vietnam have pledged not to build additional coal plants after 2030.

This is good for the environment. But…

Ultimately that is a problem for the Australian economy with the climate goals of 2030 edging closer and closer.

Where are you considering investing for the next 5 years?

It is no good to see a pump in mining stock prices for 2-3 years for it to all come crashing down as we approach the year 2030. Maybe that is what will happen. I don't know.

Financial

Comments

  • Hybroid on 20/08/2024 - 16:02
    +59

    The best time to buy property is always 5-20 years ago. The second best time is today.

    • DingoBilly on 20/08/2024 - 16:51
      -5

      Well unless it crashes in which case it's better to buy after the crash. But as others point out, it's impossible to tell what will happen. It is impossible for housing prices to go up infinitely though so at some point they must go down.

      • Hybroid on 20/08/2024 - 17:15
        +20

        House prices do go up infinitely. In fact they double every ~10-15 years. There may be temporary dips in specific markets and periods, but they always go up, up and up.

        • cloudy on 20/08/2024 - 22:36
          +24

          but they always go up, up and up.

          Found the RE agent…?

          • Hybroid on 20/08/2024 - 22:44
            +12

            @cloudy: Nope. The complete other side of the fence. Been trying to purchase a property for years now… It's not been easy nor fun.

          • Some Human on 21/08/2024 - 00:04
            +10

            @cloudy: Found the REalist

            Ftfy

        • DingoBilly on 21/08/2024 - 09:10
          +6

          I always hate this view as it's just logically incorrect.

          Nothing can go up infinitely. Even if it's the heat death of the universe causing the stop, it has to stop eventually.

          But disregarding that - we don't know if it will go up and up forever. It's pretty trivial for government to implement changes that would effectively kill the market. As to whether they do or not is another matter though.

          • Hybroid on 21/08/2024 - 10:19
            +10

            @DingoBilly: There is no reality where house prices in 2030 are lower than today. Thinking otherwise is kidding yourself and ignoring all of history.

            • Poor Ass on 21/08/2024 - 13:12
              +5

              @Hybroid: not in Australia anyway

            • JakeyJooJoo on 21/08/2024 - 14:57
              +6

              @Hybroid: I think it's silly to make such strong assumptions. We are blinded by our recent history in Australia. Look over the ditch out how other countries faired in 2008. Iceland, Ireland, US. Their housing prices all got rickety wrecked in the GFC. Just because ours didn't then, doesn't mean it won't this time, for some of the reasons OP outlined.

              I'd agree with a sentiment of "There is no reality where house prices in 2045 are lower than today."
              But, as for 2030, time will tell. I think it's a bit more likely than not that house prices will be higher in general. And I think it's a bit more likely than not, that apartment prices will be lower in general.

              A good post, it's smart to be diversifying your investments at the moment.

              • justworld on 22/08/2024 - 17:17
                +1

                @JakeyJooJoo: Can't see apartment prices getting any lower. Can already get a 2BR for $500k in Melbourne which is cheap as chips.

                Diversifying investments means having a mix of shares and property, and with property, buying investment properties in different states to spread out the land tax burden.

                • whyisave on 23/08/2024 - 07:53

                  @justworld:

                  different states to spread out the land tax burden.

                  I didn't know about the different states' "land tax" differences.
                  Could you please elaborate?

                  • justworld on 23/08/2024 - 10:58
                    +2

                    @whyisave: Land tax is progressive so you are better off owning 5 properties in 5 states than 5 properties in one state. Imagine with income tax - five people on $60k will pay a lot less tax than one person on $300k. That's how land tax works, also.

          • JIMB0 on 21/08/2024 - 11:28
            +7

            @DingoBilly: It's more a case of the value of money going down rather than the value of houses going up. Combined with interest rates always being lower than inflation makes it pretty much guaranteed that houses prices will continue to rise. This also applies to other assets such as shares.

          • OzzyOzbourne on 21/08/2024 - 22:26
            +2

            @DingoBilly: Yeah but Australia and Albo…. He can keep demand high and supply low indefinitely along with the next government

          • gromit on 22/08/2024 - 19:38

            @DingoBilly: Given we live in a system that requires at least some inflation, even a completely stable market will be inching up each year. So the trend will always be up in this sort of system. regardless property is outperformed by shares or gold anyway.

        • AaronRain on 21/08/2024 - 13:17

          This is realistic and if you look at it from an interest point of view this is really just around 7% pa (the rule of 72), the reason people make a lot of money from it is because it's easy to sink a large of amount of money into it as it is considered relatively safe.

          • scotty on 21/08/2024 - 17:53
            +4

            @AaronRain:

            the reason people make a lot of money from it

            Or because it's just something that people can easily leverage. Many investors are borrowing the 80% to buy a property, and the banks are more than happy to lend. A lot less people are getting a margin loan to buy shares or ETF.

        • besttechadvisor on 22/08/2024 - 19:29
          +2

          It might seem that house prices increase infinitely in Australia because demand has been growing since 1788, because the population has been growing.

          But demand will stop at some point, because population growth won't be infinite.

          Just look at the countries where population is in decline.

          Demand is also kept artificially high while simultaneously keeping supply artificially low. To grossly oversimplify, build affordable housing, like Singapore, and/or lower the mass importation of people and house prices won't continue going up, up, and up.

          • virhlpool on 01/09/2024 - 00:59

            @besttechadvisor:

            But demand will stop at some point, because population growth won't be infinite.

            This depends a lot on the strategic vision of the country. If they intend to keep growing its population with immigration (of course to grow the country's economy), then it can keep growing for decades. It's not that we have shortage of land or resources, like some of the very tiny countries. However, they don't necessarily need to rely on immigration as much. Most non-English speaking countries have very conservative immigration policies and they still have large economies. On the other hand, English-speaking countries have traditional relies heavily on immigration.

            • besttechadvisor on 03/09/2024 - 15:41

              @virhlpool: Even theoretically, there's a limit to population - it can't be truly infinite. Even if we converted the entire country into skyscrapers.

              Pragmatically, there's still a limit to population.

              Like you've pointed out, the idea that population = economic growth has been debunked. Now that we've largely decoupled growth from labour, especially in places like Japan ("Most non-English speaking countries have very conservative immigration policies and they still have large economies"), I highly doubt Australians are going to put up with politicians continually importing people under the guise of "economic growth" when what they really mean is "cheap labour, because we don't want to invest in anything other than land value… oh yeah, and demand to drive up that land we've invested in".

              Either way, sooner or later, house prices will stop increasing. At that point, they'll probably altogether implode as people pull their money out of huge investments with zero (or, more likely, negative) returns. It's happened in many places before…

              • virhlpool on 03/09/2024 - 16:10

                @besttechadvisor:

                I highly doubt Australians are going to put up with politicians continually importing people under the guise of "economic growth" when what they really mean is "cheap labour, because we don't want to invest in anything other than land value… oh yeah, and demand to drive up that land we've invested in".

                I agree. We have been thinking so for more than 15 years but the pollies still have managed to continue this, so who knows.

        • m0tyrider on 23/08/2024 - 12:27
          +1

          They do not go up infinitely. There are properties (not specifically Australia) that have not gone past their previous all time high's.

        • furyou on 23/08/2024 - 22:37

          Most everything prices do go up infinitely. Still manage to lose in all my investments tho..

      • Sinnerator on 21/08/2024 - 08:47
        +2

        they will just cram more and more families into a single family home, which is whats happening

      • supersabroso on 22/08/2024 - 00:08
        -1

        The good news is that it can't crash if you buy in the right location like Sydney or Melbourne as the population goes up but housing stock doesn't really ever increase as there is only so much land. Waiting for prices to jump 80% and then say, I told you so when it crashes 30% before it goes up another 40% doesn't mean it crashed at all. Just stay away from apartments as they can always build more apartments.

    • HeWhoKnows on 21/08/2024 - 20:04
      +1

      Property trusts as well are a good option and do very well at times of dropping interest rates.
      Especially if you dont have the funds and borrowing capacity to invest in residential property.

  • coffeeinmyveins on 20/08/2024 - 16:07
    +17

    let me consult the ozbargain crystal ball

  • JIMB0 on 20/08/2024 - 16:11
    +12

    A house to live in is a good investment. If our interest rates go down relative to other countries the dollar will drop. Then you'll see property go up in value as it's cheaper for international people to buy. After that an unhedged index fund of overseas stocks.

    • derrida derider on 21/08/2024 - 14:54
      +1

      Porque no los dos? Putting your money in Australian assets but offsetting it with unhedged money in a foreign asset is a good way to lay off your bet - if Oz does well relative to foreigners then your Australian asset will do well, if we do poorly relative to them your loss is offset by the falling value of the Aussie.

      Its part of the economists' argument that the optimal tradeoff between risk and reward comes from a portfolio spread amongst assets with low or (better) negative cross-correlation between them (ie they don't go up and down together much).

    • virhlpool on 01/09/2024 - 01:08

      Given strong USD to AUD coversion for last many years and relatively good absolte salary/income amounts in the US, many Americans should have been able to buy (and interested in) properties here, but they aren't. Are you referring to only Chinese when you say 'international people'?

  • Jimothy Wongingtons on 20/08/2024 - 16:13
    +10

    Maybe that is what will happen. I don't know.

    You had me till the end, op.

    Also im waiting for that lego investment guy to chime in with their expert opinion on which sets to ape out on.

  • Drakesy on 20/08/2024 - 16:23
    +12

    I don't think the rates are going to drop as much as we think. They're lower than much of the rest of the western world and our economy isn't cooling as quickly as intended.

    There's a lot of money out there with those that bought a house for a pittance and paid it off within 15 years.

    • pharkurnell on 20/08/2024 - 17:23
      +7

      High interest rates hurt those with little money and those struggling….

      Those with lots of cash will continue to spend and live it up…

      • Drakesy on 20/08/2024 - 17:53
        +7

        Good time to be a boomer.

        If only i started investing in property when i was 8

        • pharkurnell on 20/08/2024 - 20:09
          +3

          yea things appeared easier 50yrs ago

          • donga100 on 20/08/2024 - 23:30
            -7

            @pharkurnell:

            Rates exceeded 10% for the first time in 1974 and pretty much remained above 10% until 1995. In just 4 years, interest rates dropped from the high of 17% (January 1990) to the low of 8.75% (June 1994).

            Source

            • Boioioioi on 21/08/2024 - 08:32
              +9

              @donga100: Rates alone are irrelevant, it is the rate multiplied by the overall price which matters. 17% of $100k is 17k. 6% of $1m is $60k.

              • souljah on 21/08/2024 - 18:09
                +6

                @Boioioioi: Should also factor in value of money at that point in time vs now. Still more expensive now but closes the gap somewhat.

                • ssfps on 22/08/2024 - 03:20
                  +5

                  @souljah: Barely.
                  50 years ago a family home, including interest, was around ~4 years salary. Now a similar home is two people's salary and more like ~6 years.

                  • gromit on 22/08/2024 - 19:57

                    @ssfps: yep, but tax was also significantly higher so you kept far less of your salary, and those repayments made up a massive part of the household budget. definitely is harder today but so many are clueless when they suggest it was easy back then.

                    • ssfps on 23/08/2024 - 01:14

                      @gromit: I haven't seen any numbers supporting that idea.
                      In fact, in general, we are taxed higher as time goes on due to 'bracket creep' i.e. inflation and wage growth cause us to pay more tax, until the government decides to give us a break.
                      https://www.pbo.gov.au/sites/default/files/2023-03/Bracket%2…

                      With Australia’s net debt expected to peak at
                      40.9 per cent of GDP ($981 billion) by the end of 2024-25, personal income tax receipts, driven by bracket
                      creep, are likely to be a major driver in reducing the debt-to-GDP ratio over the medium and long term.

                      Outside periods of budget repair, governments have periodically increased tax thresholds or lowered tax
                      rates, with the effect of reducing or even reversing the impact of bracket creep – this is referred to as
                      ‘returning’ bracket creep. These regular changes have kept the overall average personal income tax rate
                      varying between 22 and 25 per cent of income for most of the past forty years

                      In fact, the marginal tax rate on an average salary for somebody in a capital city in aus is more like 30-35%, not 22-25% as they state the 40 year historical average is.

                      This also applies to taxes like stamp duty and gst, which aren't indexed. If the price of goods is inflated higher than wage growth (which is the case), we're effectively taxed at a higher rate.

                      If we go further back, according to pbo, income tax was significantly lower 60 years ago

                      Bracket creep has been the major driver of increases in the average personal income tax rate
                      The average tax rate on personal income has increased significantly over the last 60 years, from around
                      12.5 per cent in 1959-60 to 23.5 per cent in 2021-22, though it has been relatively stable at between 22 and
                      25 per cent for most of the past forty years.25

                    • ssfps on 23/08/2024 - 01:24
                      +2

                      @gromit:

                      but so many are clueless when they suggest it was easy back then.

                      It may have been hard, but it was far, far easier.
                      50 years ago in most parts of the western world you could be hired into unskilled labor working full time and pay off a family home on a 1/4 acre block.
                      They were also still giving away large tracts of land, basically for free, as recently as 70 years ago to anybody who was willing to farm it. Yeah, it was hard work cultivating that land, but i've been a farm hand doing 14 hours days before and I didn't get 100 Ha of land out of the deal, i got minimum wage and double time after 8h.

    • Bdawg on 29/08/2024 - 14:42
      +1

      I bought a house for a pittance 7 years ago and paid it off in about 3 years. Can't really do that where I live anymore but I'm sure there are places still like this - gotta look further afield than the capital cities.

  • Ghost47 on 20/08/2024 - 16:34

    The only thing people need to invest in, especially in Australia, is property.

    • Thenarrator on 21/08/2024 - 21:26
      +6

      it makes sense for HK or singapore property price to go up because they literally have very little land. Even for HK, the property prices are highest in the world but have fallen 30% in the last few years.

      Imagine a world with headlines saying "Aus property fell, its no surprise because we have so much land. who would've thought?". Its quite plausible yet we laugh at it now but imagine it really did happen, what could we learn from it then?

      Dont think theres such a thing as up up and up forever, especially in aus with abundant land.

      • donga100 on 21/08/2024 - 22:09
        +7

        But we also have very little land in the inner suburbs of capital cities which is where >90% of the population insists on living.

      • ssfps on 23/08/2024 - 01:32
        +2

        Australia has very little enjoyable, arable land left undeveloped.

        Have you noticed the major cities have all formed giant metropolises spanning 100s of kilometers along the coasts anywhere there is green growth and it doesn't average above 40C all Feb?

        We were able to keep giving people the "australian dream" of a home on a lot for 70 years of pop growth because we kept expanding those towns and cities, but most of it ran out decades ago. Since then we've been building into farmland and what little remnant bush/forest remains.

        You can say people can go live in the sparsely inhabited regions, but would you want to live in an arid climate where you get ~40-50C summers and your a/c bill is >$1k per month? I've lived there and it's not easy - physically it's hard, and it's expensive.

        Personally, i'd rather not turn Australia into one giant metropolis in the name of infinite growth.

        • Thenarrator on 23/08/2024 - 10:31
          +1

          we having urban sprawl right now. all these new house and land packages, subdivisions happening in badgerys creek, edmundson park. All of those houses are being taken up and brand new shops and entertainment are being set up there. We have this option of expanding inland and its livable tolerable. Now compare to hong kong, there are literally no land, yet prices fell 30%. Why did HK property fall? you may say its because of political instability. What happens if aus have political instability? is it plausible? if so, is it too late to then say "i should've known not to believe aus property is infinitely going up" ?

        • drfuzzy on 23/08/2024 - 13:38
          -1

          This is nonsense. There is plenty of arable land undeveloped. The limitation is urban sprawl, specifically the infrastructure - roads, plumbing, electricity, schools, hospitals, libraries, and the rest. We need density to keep these costs down.

          • valuer on 23/08/2024 - 17:19
            +2

            @drfuzzy:

            We need density to keep these costs down.

            People above were noting that property prices were, relatively, much lower going back in time. That was when the population was less and density was very much lower.

  • Dollar General on 20/08/2024 - 16:54
    +13

    A high yielding BMW

    • Sinnerator on 21/08/2024 - 08:47
      +13

      you can sleep in your car but you can't drive your house around

      • valuer on 23/08/2024 - 17:22

        If you could you would have a vehicle that could garage itself!

    • Poor Ass on 21/08/2024 - 13:13
      +2

      I thought it was a high yielding Merc

    • valuer on 23/08/2024 - 17:20

      Is the next (investment) step from a BMW a BMX?

  • BoltThrower on 20/08/2024 - 16:55

    Outside of real-estate?
    You have an interest in renewable energy, what's the next technological advancement in batteries after Lithium-ion? Perhaps there's opportunities there in the mining sector or in the battery production itself.

    • Bdawg on 29/08/2024 - 14:46

      Well if you could pick that you'd be $$$ in, eventually… but who knows?

  • mskeggs on 20/08/2024 - 17:10
    +26

    I love these speculations as if people have the faintest clue.
    Come back in 2030 and tell us how much was correct.

    In 2012 it was an absolute certainty to everyone that interest rates would have to rise sharply to counter the recent massive debt expansion that would drive inflation. Oops, a decade plus of all time lows.

    The assurance that China will crash, as if the leaders will sit idly by and have no reaction.

    This is Facebook uncle level analysis.

    • Crow K on 20/08/2024 - 17:37
      +4

      I'd almost agree with what you said, but straight out the gates OP used the phrase "boom-bust cycle" which confirms it's an easily measurable and quantifiable pattern.

      We're just waiting for the next part of the cycle, it's simples!

      • James Tabby on 21/08/2024 - 07:53
        -3

        It is measurable to some extent, but it isn't perfect as some types of investments can appear to keep going up regardless of the cycle.

        I am just waiting for that next part of the interest rate cycle to take effect, and to have an idea beforehand of where the funds will flow from lower interest rates.

        I doubt people are still going to leave their money at 2% in the bank. That is the effect I'm trying to predict. Ultimately that money has to go somewhere even with the uncertainties in the economy.

        • Crow K on 21/08/2024 - 09:18

          It is measurable to some extent, but it isn't perfect as some types of investments can appear to keep going up regardless of the cycle

          Can appear to keep going up? What, an optical illusion that makes that investment's line look like it's going up, but it's actually not?

          Or is it the fact that the "cycle" is just a comment on a general trend and it's not a reliable way of picking any particular investment to gauge its direction?

          I doubt people are still going to leave their money at 2% in the bank. That is the effect I'm trying to predict

          If you're so keen on charts and cycles, why don't you just look up what people did with their money the last time interest rates were 2% and copy that. It's a cycle after all, why would it be any different?

    • James Tabby on 21/08/2024 - 07:49
      -5

      They have set idly by because they cannot take on any more debt. They cannot intervene and will ultimately have a lost decade like Japan did.

      The only tool China really has is to start monetising their own debt, e.g. Abenomics, to prevent deflation but it is unclear what they want to do because they also have the USD-CNY peg that they want to maintain. They are taking a different approach.

      • mskeggs on 21/08/2024 - 09:38
        +4

        It must be wonderful to have such a clear view of the future, and certainty about what will happen. Best of luck.

    • BigBirdy on 21/08/2024 - 09:11
      -2

      The assurance that China will crash, as if the leaders will sit idly by and have no reaction.

      The only tool China really has is to start monetising their own debt

      War?

      • mskeggs on 21/08/2024 - 09:39
        +2

        Can't possibly happen, it isn't one of the scenarios OP has planned out.

    • Bdawg on 29/08/2024 - 14:47
      +2

      "The markets can remain irrational longer than you can remain solvent…"

  • Nugs on 20/08/2024 - 17:38
    +8

    bitcoin, to the moon….;/
    .

  • Trying2SaveABuck on 20/08/2024 - 19:24
    +6

    IVV
    QUAL/QHAL
    VGS

    Any of the above and sleep easy

  • RobBoss on 20/08/2024 - 20:27

    Throw your money in blue chip stocks and wait 20 years

  • screensaver on 21/08/2024 - 00:06

    Definately property, not an apartment or anything with strata, it doesnt have to be a free standing house. There are townhouse type things. one to live in and one to rent out, or a house with a granny flat type deal

    • valuer on 23/08/2024 - 17:23
      +1

      Yes. sage advice. Definitely avoid strata.

    • Bdawg on 29/08/2024 - 14:49

      People don't realise that if you're buying a unit with high strata costs the 'real' cost of that unit is perhaps $200k more than the price you are paying. Aside from the stated cost and future increases strata comes with some very serious risks too.

  • p1 ama on 21/08/2024 - 00:28
    +4

    Timing the market is a fool's game, overwhelming evidence suggests that, in the long run, active investing (i.e. timing the market, or picking individual investments) does not generate alpha (above market risk-adjusted returns). Everyone who actively invests are either (i) trying to find different diversified streams (e.g. hedge funds, alternatives) which are uncorrelated to traditional assets, (ii) market making or providing liquidity to markets, or (iii) investing based on a thesis or mandate (e.g. a values-driven superannuation fund). There are limited cases of funds which have "beaten the market" over the long run, but this is a broader discussion that has nothing to do with small-scale individual investing.

    Anybody who is trying to sell you investment tips is scamming you, anybody giving you macroeconomic analysis of investment returns is either doing ex-post analysis, or are forecasting things which are already baked into market expectations.

    Investment is not a "one-off" decision, you should not invest lump sums. If you want to invest your savings, you need to decide what percentage of your income you want to invest, then invest in a recurring manner over time as to average your buy-in (i.e. "dollar cost averaging"). The percentage of your income you invest should depend on your risk profile. Then you should invest in a diversified portfolio of various ETFs, good ones to start with are ones which track the ASX200 index and S&P500. You can then start to look at a NASDAQ or emerging markets fund once you have more capital / comfort around investing.

    FWIW, you might want to get your analysis / facts right as well - not sure why you are talking about thermal coal for electricity in Asia and the Australian mining industry. What China / SEA decides to burn in their coal generators for electricity is irrelevant because most of Australia's major miners no longer mine and export thermal coal. They are mostly mining iron ore, precious metals (particularly copper and nickel), and metallurgical coal, which is used in the production of steel, not electricity.

    • James Tabby on 21/08/2024 - 07:57

      Interesting, but it is possible China must have been burning steel production coking coal for electricity due to supply constraints whilst it was growing. That seems to have stopped now.

      China has been importing less coal from Australia overall, so that trend is still there.

      Anything else explain it?

      Sure Australia exports other types of minerals but those are also exposed, notably iron ore because of the glut of housing in China, recycling of copper as countries move to fibre, and others. Nickel is the only winner as we start to see cheaper battery technology. There is also bauxite, aluminum but I cannot see any pros and cons in the future for it.

      • mskeggs on 21/08/2024 - 09:48
        +1

        Who is the largest thermal coal producer in the world? How confident are you in their figures?

      • p1 ama on 21/08/2024 - 14:38
        +1

        China has been importing less coal from Australia overall, so that trend is still there.

        Are you talking about thermal coal or met coal? Very different assets.

        Sure Australia exports other types of minerals but those are also exposed, notably iron ore because of the glut of housing in China, recycling of copper as countries move to fibre, and others. Nickel is the only winner as we start to see cheaper battery technology. There is also bauxite, aluminum but I cannot see any pros and cons in the future for it.

        Sure, but what makes you think that you can see these things but the broader market can't and haven't been able to factor into forward expectations?

      • md333 on 21/08/2024 - 16:57

        Nickel is the only winner as we start to see cheaper battery technology

        I'm just working on a closure plan for a Nickel Mine today, very little chance of reopening due to low prices. Might be your chance to move in and make a killing.

      • Dogsrule on 26/08/2024 - 08:29

        Nickel is the only winner as we start to see cheaper battery technology.

        I think you've got your wires crossed there, Australian Nickel is on the downswing as it is being replaced with Iron and Phosphate in the cheaper LFP battery technology and Indonesia has radically ramped supply capacity of Nickel:

        https://www.mining.com/blade-runners-how-lfp-batteries-broug…

        https://www.abc.net.au/news/2024-07-11/bhp-to-close-nickel-w…

  • ForkSnorter on 21/08/2024 - 07:41
    -4

    If I had $800k, I would spend it renovating my current house into my dream house. Or I would sell my current house and use the extra cash to buy my dream house and continue to improve it. Beautiful houses are worth investing in and working on, and it is very rewarding to turn an ordinary house into a beautiful one. Not really interested in just using money to make more money. What a boring thing to do. Only got one life. Want to create things, not just suck money out of the economy.

    • koalabargains on 23/08/2024 - 08:37

      Grow up.

      Handing over 800k to monkeys to make your 'dream house' is childish. Houses are just machines (made of wood, stone, glass) that we live in. '

      Plus an 800k reno? lol, thats 6 years of your life you'll never get back.

      • ForkSnorter on 23/08/2024 - 08:53

        Renovating is fun. You can do some of it yourself, especially the designing. Perhaps you have never experienced the joy of creating things yourself, and just prefer to pay others to do it. I admit, $800k is a bit much for a renovation, but I guess I would upgrade my house first and use the leftover cash to improve the house to my taste. Keeping the leftover money in the bank over that time would also help pay for a lot of it from the interest.

        Houses are just machines (made of wood, stone, glass) that we live in.

        You only get one life. Your immediate environment has a big impact on your mood and your lifestyle. May as well live in the nicest house possible. I enjoy living in beautiful, well-designed places that suit my lifestyle.

        • koalabargains on 23/08/2024 - 09:25
          +2

          Renovating in Australia is not fun.

          It is one of the stupidest ways people pass their time, improving terrible houses to make strange and terrible houses.

          You only get one life. Your immediate environment has a big impact on your mood and your lifestyle. May as well live in the nicest house possible. I enjoy living in beautiful, well-designed places that suit my lifestyle.

          Then youd best use that 800k to move to any other developed country. The build environment of Australia is awful, and as you say - you only have one life. Banging your head on renovating an Aussie built hovel is a terrible way to waste one's life. For 800k aud, overseas, you can buy a house better than Kirribilli House - which only got insulation in 2013.

          • ForkSnorter on 23/08/2024 - 09:33

            @koalabargains:

            For 800k aud, overseas, you can buy a house better than Kirribilli House - which only got insulation in 2013.

            Serious? If I could buy a house better than Kirribilli house for $800k in a nice area on the water in a nice European city, I would do it tomorrow. Keep in mind, Kirribilli house is a Harbourside house on an enormous block in the most beautiful city in the world. I haven't been inside, but I imagine it would be pretty good.

            • koalabargains on 23/08/2024 - 10:03

              @ForkSnorter:

              Serious? If I could buy a house better than Kirribilli house for $800k

              You can anywhere in the western world. We are talking about the house itself. The size, dimensions, materials.

              in a nice area on the water in a nice European city, I would do it tomorrow.

              Again, easily attainable. Half of Italy. Southern France. All of Greece.

              Keep in mind, Kirribilli house is a Harbourside house on an enormous block in the most beautiful city in the world.

              Youre not talking about a house now. Youre talking land value in a real estate bubble in Sydney.

  • Lurk Hartog on 21/08/2024 - 08:57

    VDHG and chill

    • Thenarrator on 21/08/2024 - 21:32
      +2

      VDHG in 2017 $50
      VDHG in 2024 $65
      This is 30% return over 7 years. or 4.2% pa. Not very high for 7 years of investment considering inflation has been 7-9% last year, 4% this year and 2-3 % before that.

      • donga100 on 21/08/2024 - 22:12
        +3

        That's not a very accurate comparison because VDHG also pays dividends.

        • Thenarrator on 21/08/2024 - 22:14
          +6

          3.5% dividend + 4.2% = 7.7% :)
          the 4.2% is an overestimation considering i havent accounted for compounding. in reality, less than that.

      • drfuzzy on 23/08/2024 - 13:44
        +4

        VDHG and chill

        Chill is correct.
        With an investment return below inflation, it is hard to afford heating.

        • Thenarrator on 23/08/2024 - 14:44

          yep its no where near what tiktok experts claim asx is averaging as 11%

          • mac2403 on 23/08/2024 - 17:01

            @Thenarrator: last 12 months return is 15.3%, i understand you're averaging out the returns over the years in your analysis but don't you also have to account for the DCA during that time? Not an expert actually wondering…

            • Thenarrator on 23/08/2024 - 20:35

              @mac2403: return is return. the return over last 7 years is 4.2% ex dividend MAX. Dollar cost averaging doesnt magically give you more return, it only gives you less return.
              you cant look at purely last year's result and say asx gives 15.3% return because this would mean youre actually trying to "time the market" to last year. We all know its not to time the market but rather time in the market.

              • mac2403 on 23/08/2024 - 22:08

                @Thenarrator: Sorry not sure if I was clear but I meant vdhg was 15.3 and off top of my head was like 9-10 PC over last 3 years and similar for 5 years. Although I am looking at the index fund not the etf… although don't think thar should make a difference. Thanks for the reply though will start reading up some more in this area.

                • Thenarrator on 29/08/2024 - 15:11

                  @mac2403: every blogger vlogger says etf averages 10%+ pa but thats simply not true and they dont bother to go in the price 10 years ago and compare it today and work out actual return. its more or less similar to what you get in a high interest savings account really. I know some banks right now give 5.7% pa interest right now.

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