WEBVTT - What the share market pullback tells every investor 0:00:08.039 --> 0:00:11.039 Hello, and welcome to The Australian's Money Puzzle podcast. I'm 0:00:11.119 --> 0:00:15.080 James Kirby, who was editor at The Australian. Welcome aboard everybody, 0:00:15.160 --> 0:00:18.480 all investors, I expect feeding just a little bit nervous 0:00:19.120 --> 0:00:22.400 this week. It's not every day we have share market 0:00:22.520 --> 0:00:24.880 session to kick off the week where we have the 0:00:24.920 --> 0:00:28.320 worst session in four years, which we had this week 0:00:28.360 --> 0:00:31.840 on Monday, three and a half percent off the market, 0:00:32.560 --> 0:00:37.479 definitely rocky times. We see the NASDAC is already in correction. 0:00:37.760 --> 0:00:40.680 The S and P that's the main US market is 0:00:40.720 --> 0:00:43.919 down about seven and a half percent as we speak 0:00:44.000 --> 0:00:48.240 on Tuesday, and we will see what it does this evening, 0:00:48.280 --> 0:00:51.120 whether it goes into a full blown correction or not. 0:00:51.320 --> 0:00:54.240 Very hard to say. We can see just middle of 0:00:54.280 --> 0:00:58.080 the day Tuesday that the Australian market is stabilizing a little. 0:00:58.120 --> 0:01:00.400 But I can tell you that the slightest answering, I 0:01:00.400 --> 0:01:02.640 should say, in the US features and we will fall 0:01:02.760 --> 0:01:06.080 with them, faithfully, we will fold. Don't you worry. We 0:01:06.240 --> 0:01:08.720 fall lemming like every time we did three and a 0:01:08.760 --> 0:01:12.440 half percent on Monday, and that is barely what happened 0:01:12.480 --> 0:01:17.160 on the US overnight Monday. Perhaps on our market. But 0:01:17.360 --> 0:01:22.280 more broadly, I want to talk about for the diversified investor, 0:01:22.560 --> 0:01:25.360 For the investor who is like most of you, I'm 0:01:25.400 --> 0:01:30.759 sure has shares, probably has property in some fashion, has 0:01:30.880 --> 0:01:33.839 other assets. Then you might have gold, you might have cash, 0:01:33.880 --> 0:01:37.680 you might have alternative assets. How do we handle a 0:01:37.959 --> 0:01:41.200 period of instability which we've seen some of, which we 0:01:41.280 --> 0:01:44.080 may see much more of because the conditions that have 0:01:44.160 --> 0:01:49.280 triggered this selloff are unclear. There is no single trigger, 0:01:49.440 --> 0:01:51.720 and on that basis, it could happen again at any time. 0:01:51.880 --> 0:01:53.720 I was thinking, who could we have as a guest 0:01:53.840 --> 0:01:56.880 on the show to talk about the broader situation. It 0:01:56.920 --> 0:02:00.600 needed someone who was a diversified investor themselves. I thought, Hey, 0:02:00.960 --> 0:02:03.880 Anthony Keane, who has been on the show before. He is, 0:02:03.920 --> 0:02:06.760 of course the personal finance guru and news corporation. He 0:02:06.800 --> 0:02:09.600 operates out of Adelaide. In the end of We're all 0:02:09.639 --> 0:02:13.680 in the same big, happy family, and we finally met 0:02:13.720 --> 0:02:16.840 in person. Irl. Great to have you on board today. 0:02:17.040 --> 0:02:20.040 Tell me we'll talk about all things, not just the 0:02:20.120 --> 0:02:23.760 market downturn, but how that could affect everything, How it 0:02:23.800 --> 0:02:27.160 could affect, for instance, interest rates, how that could in 0:02:27.200 --> 0:02:30.840 turn affect property. I was entertained by the fact that 0:02:30.919 --> 0:02:34.760 you had a piece awfully well timed where you mentioned 0:02:34.760 --> 0:02:38.919 that you had sold all your shares recently. Now that's 0:02:38.960 --> 0:02:40.960 not quite a Warren Buffett like move where you sold 0:02:41.000 --> 0:02:44.280 all your shares just before the downturn. You have lots 0:02:44.320 --> 0:02:47.800 of shares. You just sold all your ordinary shares and 0:02:47.840 --> 0:02:51.839 you've switched entirely to ETFs to exchange traded funds. That's 0:02:51.880 --> 0:02:54.359 a big call, right, tell me? Is that forever? And 0:02:54.680 --> 0:02:55.520 why did you do it? 0:02:56.160 --> 0:03:00.840 Yeah? And I absolutely I have sold every direct share 0:03:01.280 --> 0:03:04.000 that I've built up and owned, but that's been a 0:03:04.000 --> 0:03:06.919 gradual thing over that it started buying maybe twenty five 0:03:07.000 --> 0:03:08.840 years ago. But this is the first time in a 0:03:08.919 --> 0:03:11.480 quarter of a century I do not have one individual share 0:03:11.480 --> 0:03:14.280 to my name. And I'd like to say it was 0:03:14.520 --> 0:03:17.320 timed the share market were out perfectly, but no, it 0:03:17.400 --> 0:03:21.520 was purely a strategic and getting old decision. And unlike you, 0:03:21.800 --> 0:03:25.000 I don't have a self managed super fun but as 0:03:25.040 --> 0:03:29.120 I've got older, my superbalance has grown as everyone's done, 0:03:29.440 --> 0:03:31.200 and that is through a lot of index funds. So 0:03:31.240 --> 0:03:33.799 I invest in a lot of Australian overseas as you said, 0:03:33.800 --> 0:03:37.240 diversified investments through a lot of index funds through super 0:03:37.480 --> 0:03:40.840 but not yet self managed. But that is something I 0:03:40.880 --> 0:03:44.120 am considering for both shares and property in the next 0:03:44.200 --> 0:03:47.800 sort of five to ten years purely. And so the 0:03:47.880 --> 0:03:50.440 reason I've looked to sell out of the direct share 0:03:50.480 --> 0:03:53.800 ownership is purely because if you're holding it this stuff 0:03:53.800 --> 0:03:56.080 in super, the tax benefits that you get from it 0:03:56.120 --> 0:03:59.320 when you do retire from work and switch your money 0:03:59.320 --> 0:04:02.520 to several times about that, I'd like to I've investment 0:04:02.600 --> 0:04:05.360 properties outside of cheaper, but would like to own one 0:04:05.600 --> 0:04:08.920 in the future as well, purely for that capital gains 0:04:09.000 --> 0:04:12.760 tax benefit. It's just you're talking tens of thousands of 0:04:12.800 --> 0:04:15.960 dollars of savings by doing that. So I do love shares, 0:04:16.000 --> 0:04:19.160 I write about shares every day, and I do plan 0:04:19.320 --> 0:04:22.360 to get more in the future. But it's just a 0:04:22.400 --> 0:04:27.280 matter of strategy, age timing. Moving that direct share ownership 0:04:27.320 --> 0:04:31.000 withinside throppernuation. As I get closer to my mid eight 0:04:31.080 --> 0:04:33.799 fifties and sixties, it will work better. 0:04:34.600 --> 0:04:39.120 You don't have to think anymore. You have vtfs. There's 0:04:39.120 --> 0:04:41.280 an element of truth on that, isn't it. You can 0:04:41.320 --> 0:04:43.680 put them. You can say, okay, I've got my sessings. Really, 0:04:43.760 --> 0:04:45.920 I don't really care if come bank ors of fifty 0:04:45.960 --> 0:04:48.800 percent for PHP fours fifty percent anymore? Is am I 0:04:49.440 --> 0:04:50.200 simplifying it? 0:04:50.279 --> 0:04:52.479 I think you're right. I think the one thing that 0:04:52.560 --> 0:04:55.760 will hold me back from going direct shares again in 0:04:55.800 --> 0:04:58.599 the future, through a self managed fund or just through 0:04:58.960 --> 0:05:01.520 a retail or what other the fund that opposite direct 0:05:01.560 --> 0:05:05.320 share investment is do I want do you want the headache? 0:05:05.520 --> 0:05:08.360 Do you just want to trust what the markets are doing? 0:05:08.480 --> 0:05:10.800 Because I've been burnt. I heard you talking, I think 0:05:10.880 --> 0:05:13.960 last week on your podcast about Goodman Group how to 0:05:14.080 --> 0:05:17.320 the star and the market as a real estate investment trust. 0:05:17.360 --> 0:05:19.839 Now I bought them in the GFC and lost ninety 0:05:19.839 --> 0:05:22.279 percent of my money before I sold out and then 0:05:22.480 --> 0:05:25.159 and they've gone gangbusters since. Had I held them, which 0:05:25.160 --> 0:05:28.479 I didn't for various reasons, would have gone great. But 0:05:28.680 --> 0:05:31.120 it's just the damage and that the damage it does 0:05:31.160 --> 0:05:33.960 to your confidence as an investor when you have those 0:05:34.000 --> 0:05:36.279 sorts of losses. I don't know. I'm not sure that 0:05:36.320 --> 0:05:38.039 I want to go through all that again. And it's 0:05:38.040 --> 0:05:40.280 like with the fall we've had in recent days, everyone 0:05:40.360 --> 0:05:42.160 super is going to take a hit, but that's everyone 0:05:42.200 --> 0:05:45.840 super pretty much all those that are invested in share markets. 0:05:45.440 --> 0:05:47.839 So you're comforted by the fact that you won't do 0:05:47.920 --> 0:05:51.800 any worse than everyone else's basicity than the index from 0:05:51.839 --> 0:05:52.799 here on or better. 0:05:54.040 --> 0:05:57.320 That's exactly right. But shares are great and a lot 0:05:57.320 --> 0:06:00.919 of people love that watching it, and I have loved 0:06:00.960 --> 0:06:03.080 it in the past, But is it right for my 0:06:03.160 --> 0:06:05.400 stage of life? And I know you've also spoken about 0:06:05.440 --> 0:06:08.040 as people. Do you get older, it's do you want 0:06:08.080 --> 0:06:10.720 to spend your time watching the moves of individual stocks 0:06:10.720 --> 0:06:12.279 every day? Or do you want to spend your time 0:06:12.400 --> 0:06:15.880 enjoying sort of life and retirement and not having to 0:06:15.920 --> 0:06:19.120 worry about the self managed super fun compliance and all 0:06:19.120 --> 0:06:19.880 that sort of stuff. 0:06:20.040 --> 0:06:23.000 Does your attitude towards property and how much property you have? 0:06:23.720 --> 0:06:26.080 Does it change when you see one of these shock 0:06:27.360 --> 0:06:28.480 share market selloffs? 0:06:29.520 --> 0:06:32.640 You don't see We saw a fifty five percent fall 0:06:32.680 --> 0:06:36.839 in the ASX during the global financial crisis. I've never 0:06:36.880 --> 0:06:39.400 seen anything like that in any of the property markets. 0:06:39.680 --> 0:06:43.039 Makes me relieve that I'm more exposed to real estate. 0:06:43.920 --> 0:06:46.919 But the property market in Australia is sort of a 0:06:47.120 --> 0:06:50.600 real variation in what you get. I'm running a column 0:06:50.600 --> 0:06:53.040 this week. In the past twelve months we've had Perpose 0:06:53.120 --> 0:06:56.840 done plus twenty five percent and Melbourne which is down 0:06:56.880 --> 0:06:59.680 a couple of percent. So that's a massive variation in 0:06:59.720 --> 0:07:03.480 proper as well. But you don't tend to check your 0:07:03.520 --> 0:07:07.120 prices every day. You see it as a long term investment. 0:07:07.200 --> 0:07:10.960 But different people have different preferences as to what they like. 0:07:11.040 --> 0:07:12.680 And I've got a bit of trouble with readers in 0:07:12.680 --> 0:07:16.880 the past writing that I prefer property over shares any day, 0:07:17.160 --> 0:07:21.160 but very happy to own shares and index funds through 0:07:21.160 --> 0:07:23.880 superannuation and have that exposure to the market. 0:07:24.160 --> 0:07:26.680 It's interesting on the share you've gone for the you've 0:07:26.720 --> 0:07:30.520 gone for the indexing and got away from the sort 0:07:30.560 --> 0:07:34.400 of details and the individual variation of shares property. You 0:07:34.440 --> 0:07:38.120 don't really have that choice. I'm just thinking of the 0:07:38.160 --> 0:07:40.520 point you're making that I can stand here and tell 0:07:40.560 --> 0:07:44.040 everyone the property prices are up four percent across Australia 0:07:44.080 --> 0:07:46.920 this year so far. You're laughing at that. If you're 0:07:46.960 --> 0:07:49.440 in Perth, you're saying, hey, we're up twenty percent, and 0:07:49.520 --> 0:07:51.560 if you're in Melbourne you're saying, hang on a second, 0:07:51.960 --> 0:07:54.440 that's not true. In this city, we're down one percent. 0:07:54.520 --> 0:07:57.520 And you live in Adelaide. Adelaide is doing well. If 0:07:57.560 --> 0:07:59.240 Adelette keeps going the way, it's going to have a 0:07:59.320 --> 0:08:03.320 higher average than Melbourne within a matter of weeks. They're 0:08:03.400 --> 0:08:06.840 absolutely light. The average dwelling value is in the high 0:08:06.920 --> 0:08:10.680 seven so maybe seven eighty thereabouts. Its neck and neck 0:08:10.760 --> 0:08:15.520 right now, Do you, as a property investor seek to 0:08:15.760 --> 0:08:19.960 diversey to diversify your risk as you've done with the shares? 0:08:20.320 --> 0:08:22.760 Do you try and basically not have all your eggit 0:08:22.800 --> 0:08:25.440 and basket and have a property that isn't that are 0:08:25.480 --> 0:08:26.200 in different places? 0:08:28.120 --> 0:08:32.160 Yes, most definitely two states. At the moment. I always 0:08:32.160 --> 0:08:34.079 thought that there's no way I would ever be able 0:08:34.160 --> 0:08:37.240 to afford property in Melbourne because of the price is there. 0:08:37.240 --> 0:08:41.480 But having watched that difference, that sort of difference just narrow. 0:08:42.240 --> 0:08:46.760 Looked at Hobart a few years ago, was like soaring 0:08:46.840 --> 0:08:49.959 the prices there, and now that now their medium price 0:08:50.000 --> 0:08:52.000 is one hundred thousand sort of less than any other 0:08:52.320 --> 0:08:56.080 state capital city. So there are cycles in each city 0:08:56.920 --> 0:09:00.880 and diversifying works great as a direct property investor, but 0:09:01.040 --> 0:09:05.760 also great as a property investor from our land tax 0:09:05.800 --> 0:09:09.000 point of view as well, because of the different land 0:09:09.040 --> 0:09:12.199 tax raisings in the different states, so you'll often find 0:09:12.240 --> 0:09:15.000 investors trying to diversify to a different state. So I 0:09:15.000 --> 0:09:17.880 had planned for Perth, but I've missed the boat on 0:09:17.920 --> 0:09:21.960 that one. But Melbourne would potentially be on the radar 0:09:22.120 --> 0:09:24.880 in the next year or two, and you've spoken recently 0:09:24.920 --> 0:09:27.840 about over supply there, so I'll be keeping an eye 0:09:27.880 --> 0:09:30.439 on that, but definitely diversify. 0:09:30.960 --> 0:09:32.680 Okay, very interesting. I want to talk to you about 0:09:32.679 --> 0:09:36.720 a couple of quite topical issues how this market proversivet 0:09:36.720 --> 0:09:39.640 could affect why they're investing. Will be back in a moment. 0:09:54.000 --> 0:09:57.040 Hello and welcome back to the Australians Money Puzzitive podcast. 0:09:57.040 --> 0:10:00.240 I'm James Kirby talking to Anthony Keene today, my Colie 0:10:00.480 --> 0:10:06.480 in News Corporation on the finance section of all the 0:10:06.520 --> 0:10:09.600 papers and digital assets that we have guest on the 0:10:09.640 --> 0:10:13.440 show before. Always happy to have him back, Anthony. I 0:10:13.480 --> 0:10:15.400 was just thinking that one of the things we have 0:10:15.520 --> 0:10:18.320 at the moment is there's a fairly line boble market. 0:10:18.360 --> 0:10:23.040 We've got some softening in the property market, and traditionally, 0:10:23.040 --> 0:10:26.000 if you've got a share market, a serious share market diversity, 0:10:26.200 --> 0:10:28.840 people will move to property. I can give you instances 0:10:28.880 --> 0:10:33.400 back over the years very clear instances where that happened. Now, 0:10:34.120 --> 0:10:36.600 we don't know how bad this will get, but it's 0:10:36.600 --> 0:10:39.400 been a pretty bad week so far on the market. 0:10:39.440 --> 0:10:43.360 That the worst week for four years, And you could 0:10:43.480 --> 0:10:46.360 argue it wouldn't take much more to knock more off 0:10:46.800 --> 0:10:50.880 global markets, particularly the US, because there are always risks 0:10:50.880 --> 0:10:54.559 in the market, but there are distinct risks emerging just now. 0:10:54.559 --> 0:11:00.720 They're geopolitically, particularly US presidency, particularly wars in different parts 0:11:00.760 --> 0:11:03.400 of the world. These are things that can knock a 0:11:03.440 --> 0:11:06.760 market out very easily. It's fragile. I think we could 0:11:06.800 --> 0:11:10.080 say that, and we had a sharp sell off, which 0:11:10.160 --> 0:11:13.960 could extend What I want to draw out from you, 0:11:14.000 --> 0:11:17.880 as someone who invests right across the board in all classes, 0:11:18.440 --> 0:11:24.160 what might happen? What can a share market downturn do 0:11:24.320 --> 0:11:27.240 for broad investments? Apart from the fact that your shares 0:11:27.240 --> 0:11:30.000 have lost value, it takes some energy out of the market, right, 0:11:30.040 --> 0:11:34.280 What might happen with interest rates for all investors if 0:11:34.320 --> 0:11:37.400 we have an extended share market sell off. 0:11:39.320 --> 0:11:42.960 Yeah, that's a really good question, James, because I think 0:11:42.960 --> 0:11:47.679 you're right. If this market sell off continues, and Stephens, 0:11:48.679 --> 0:11:52.360 we saw it during COVID, we saw it before that 0:11:52.440 --> 0:11:56.880 in the GFC when interest rates just drop really sharply, 0:11:57.160 --> 0:12:00.520 that's going to obviously not be good news for the 0:12:00.559 --> 0:12:03.280 people that have been in loving their five percent plus 0:12:03.400 --> 0:12:06.920 returns on cash in the last couple of years, because 0:12:06.960 --> 0:12:10.360 if the Reserve Bank cuts rates quickly, obviously those rates 0:12:10.360 --> 0:12:13.040 will fall. But I think in the past as well, 0:12:13.080 --> 0:12:15.600 it could be great for bonds. Now I've never invested 0:12:15.640 --> 0:12:18.840 directly in bonds. Most people have probably never invested directly 0:12:18.840 --> 0:12:21.200 in bonds, but you might have a portion in your 0:12:21.280 --> 0:12:25.760 super But I remember because as high interest rates, you 0:12:25.800 --> 0:12:28.640 can get great returns from bonds when they're sharp falls 0:12:28.679 --> 0:12:31.640 in central bank interest rates because of that inverse way 0:12:31.720 --> 0:12:35.640 that they work. So might be great for that. Falling 0:12:35.720 --> 0:12:40.120 rates might be beneficial for property if it becomes easier 0:12:40.120 --> 0:12:43.120 to borrow to invest in real estate as well, So 0:12:43.160 --> 0:12:44.080 there's potential there. 0:12:44.160 --> 0:12:46.599 It could be actually easier to finance investments. 0:12:47.000 --> 0:12:48.640 Could be yes, but there's also going to be a 0:12:48.640 --> 0:12:50.079 lot of gloom and a lot of people losing a 0:12:50.120 --> 0:12:52.040 lot of confidence and stuff. And let's hope we don't 0:12:52.080 --> 0:12:54.520 have anywhere near the falls we had in that sort 0:12:54.520 --> 0:12:57.040 of flash crashing COVID. All the huge falls we had 0:12:57.080 --> 0:12:59.319 back at around two thousand and eight, two thousand and nine. 0:12:59.800 --> 0:13:05.040 You with your move to ETFs, if you saw a 0:13:05.080 --> 0:13:08.079 flash crash, a harder crash than we've had. Let's say 0:13:08.080 --> 0:13:10.320 we're down. Let's say that the US market is down 0:13:10.760 --> 0:13:14.000 approximately seven and a half percent is to drop so far, 0:13:14.720 --> 0:13:16.600 but let's say it dropped really sharply and we did 0:13:16.679 --> 0:13:19.680 twenty percent drop or so in the US market. Would 0:13:19.679 --> 0:13:22.840 that disturb your plan about ETFs forever? Would you say, gosh, 0:13:22.920 --> 0:13:25.600 this is there are bargains here. I can't resist it. 0:13:25.840 --> 0:13:28.440 Yeah, it's right, and a lot of them. A lot 0:13:28.480 --> 0:13:31.800 of the brokers and the ches specialists I've been speaking 0:13:31.840 --> 0:13:34.360 to you have literally been waiting for a fall, for 0:13:34.400 --> 0:13:37.240 a breather, whether it's ten or twenty percent. And I've 0:13:37.280 --> 0:13:40.920 had this money sitting on the sidelines. Because market drops 0:13:40.960 --> 0:13:44.600 twenty percent, you're effectively buying at a discount. I've still 0:13:44.640 --> 0:13:46.960 got scars from the GFC. James. I listened to all 0:13:47.000 --> 0:13:48.760 of that and bought it a ten or twenty percent 0:13:48.800 --> 0:13:52.480 discount heavily, very heavily, and then we'll lost another thirty 0:13:52.520 --> 0:13:54.920 five percent on my money and took years and years 0:13:55.000 --> 0:13:55.959 to get That was nice. 0:13:56.040 --> 0:13:58.120 You sound like someone who's been through the war, Anthony, 0:13:58.160 --> 0:14:02.240 that you were you forever. Look, I'm so glad you've 0:14:02.280 --> 0:14:05.160 brought this up because I know a lot of our 0:14:05.240 --> 0:14:11.440 listeners have not really experienced the grueling experience of a 0:14:11.600 --> 0:14:14.360 share market fold. When I say a share market fold, 0:14:14.800 --> 0:14:16.840 what you're talking about was worse. It was much worse 0:14:16.880 --> 0:14:20.800 than the COVID dropped. The GFC was. It rattled confidence 0:14:21.000 --> 0:14:24.840 in the deepest possible way. Banks folks, banks were being 0:14:24.960 --> 0:14:28.720 saved in the UK and the US here and then 0:14:28.880 --> 0:14:33.320 on top of that you had the worst type of market. 0:14:33.440 --> 0:14:37.200 They says, it felt fifty five percent, but it took 0:14:37.360 --> 0:14:40.920 two years to do that. It peaked in late two 0:14:40.960 --> 0:14:43.400 o seven. It was the middle of March two oh 0:14:43.480 --> 0:14:45.240 nine when we hit the bottom, and of course we 0:14:45.280 --> 0:14:46.880 didn't know we'd hit the bottom because it seemed to 0:14:46.920 --> 0:14:49.800 have been going down forever. So it's one thing to 0:14:49.800 --> 0:14:52.240 be an investor goes through the COVID crash, which was 0:14:52.400 --> 0:14:56.240 short and sharp, and the stock markets were flying back 0:14:56.320 --> 0:15:01.040 up within months of the initial downturn. Much harder to 0:15:01.080 --> 0:15:03.640 go through something like the GFC, where there's two solid 0:15:03.680 --> 0:15:07.360 years for people, where the stocks just slowly sink. Child 0:15:07.440 --> 0:15:10.320 child down by fifty percent. That's really difficult. So that'd 0:15:10.320 --> 0:15:12.480 you both, Anthony, and I bet it does shape you. 0:15:12.760 --> 0:15:16.440 Did it push you more towards property investing than it 0:15:16.520 --> 0:15:17.920 might have? Than you might have? 0:15:18.680 --> 0:15:21.200 I think it did. And look there's been I've been 0:15:21.280 --> 0:15:24.560 fortunate being from Adelaide that Adelaide tends not to have 0:15:24.640 --> 0:15:30.200 the heavy downturns in real estate prices that the big 0:15:30.200 --> 0:15:34.080 Eastern capitals do. But that said, before these did, I 0:15:34.120 --> 0:15:37.160 went about eight or nine years before these recent sort 0:15:37.160 --> 0:15:39.520 of run up since around the sort of COVID period 0:15:40.240 --> 0:15:44.120 of zero growth, holding onto a property and getting zero 0:15:44.240 --> 0:15:46.240 growth but still having to pay all the holding costs 0:15:46.280 --> 0:15:49.640 and the fees and things. So but you hold My 0:15:49.760 --> 0:15:51.240 view is if all you've got to do with your 0:15:51.280 --> 0:15:54.240 whole real estate, if you go through two price cycles, 0:15:54.280 --> 0:15:56.960 two price booms, then you're set up for life. Because 0:15:57.080 --> 0:15:59.920 of the magnitude and the size of the money that 0:16:00.120 --> 0:16:05.880 invested in one individual property. Most people would not put 0:16:05.960 --> 0:16:08.560 five one hundred and six seven hundred thousand dollars just 0:16:08.680 --> 0:16:11.400 into one individual share or even a portfolio. A lot 0:16:11.440 --> 0:16:14.480 of people don't do that. Property gives you that leverage. 0:16:14.600 --> 0:16:17.120 So I think you're right they did. I've still owned 0:16:17.120 --> 0:16:20.480 shares for all through the recovery, and Jesus was a 0:16:20.480 --> 0:16:23.440 long recovery as well. We only to the all odds 0:16:23.480 --> 0:16:26.200 in the ASX two hundred only a few years ago. 0:16:26.360 --> 0:16:28.560 It took over ten or twelve years just to get 0:16:28.600 --> 0:16:31.120 back to where they were in November two thousand and seven. 0:16:31.520 --> 0:16:35.920 Whereas steady issue goes, property market just kept plotting higher 0:16:35.920 --> 0:16:38.640 and as I said, flat for a long period while 0:16:38.680 --> 0:16:42.160 I was watching other states go higher. But it's been 0:16:42.440 --> 0:16:46.480 says Tener. Look, I'd be nervous about investing in SA 0:16:46.800 --> 0:16:49.920 or Wa at the moment, even Queensland to a degree 0:16:50.240 --> 0:16:53.200 because of the size of the gains that they've had. 0:16:53.320 --> 0:16:57.520 Nothing keeps going up forever. But you've got that argument. 0:16:57.560 --> 0:17:00.120 You've got various arguments for the under supply of a 0:17:00.200 --> 0:17:03.240 state national aid, the huge population growth. I just think 0:17:03.240 --> 0:17:07.320 the fundamentals are still there. And a roof over your 0:17:07.320 --> 0:17:10.280 head is the best investment you can make, whether it's 0:17:10.280 --> 0:17:13.480 your own home or whether it's an investment property or two. 0:17:13.520 --> 0:17:16.119 I really believe that for a long time because of 0:17:16.800 --> 0:17:18.320 the security that it gives you. 0:17:18.640 --> 0:17:20.720 Okay, terrific, We've take sure break. We're going to have 0:17:20.760 --> 0:17:23.919 some great questions from Alex and Christopher and Margaret and 0:17:24.560 --> 0:17:33.760 if we get to it, orpheus back in a moment. Hello, 0:17:33.840 --> 0:17:37.159 Welcome back to the Australians Money Puzzle podcast. I'm James Kirby. 0:17:37.600 --> 0:17:41.760 I'm talking to Anthony Keene. We have some great questions here. 0:17:42.480 --> 0:17:45.439 Alex says, I'm in my early thirties. I've been contributing 0:17:45.480 --> 0:17:48.119 into super with the goal of starting a SMA super 0:17:48.119 --> 0:17:52.000 fund to buy a house in Sydney. The thirty year 0:17:52.080 --> 0:17:57.000 long price growth for capital cities it's five percent, assuming 0:17:57.080 --> 0:17:59.439 I can even find a house in Sydney. This asset 0:17:59.480 --> 0:18:01.840 with the priests did three million in thirty years time, 0:18:01.840 --> 0:18:04.600 at which point on realize gains and earnings would be 0:18:04.600 --> 0:18:07.679 taxed to thirty percent war Boardly, it seems like the 0:18:07.720 --> 0:18:10.679 two tax hacks of super and negative gearing will be 0:18:10.720 --> 0:18:14.280 phased out in the not too distant future. How is 0:18:14.320 --> 0:18:18.280 this fair? Okay atleast Alex at least has packed an 0:18:18.280 --> 0:18:22.679 awful lot into that question. A couple of things. He says. 0:18:22.720 --> 0:18:26.240 First of all, that negative gearing could go in the 0:18:26.280 --> 0:18:30.000 near future. I don't know about that. Actually, there's absolutely 0:18:30.000 --> 0:18:33.000 no evidence about that, Alex at all. This is never advised. 0:18:33.040 --> 0:18:36.920 This is only information. But you could argue quite strongly 0:18:36.960 --> 0:18:40.120 that the ALP lost the election they might have won 0:18:40.200 --> 0:18:42.359 on the basis that they went near negative gearing and 0:18:42.400 --> 0:18:45.280 had a plan to reform it. Certainly, that and the 0:18:45.280 --> 0:18:50.200 Frank dividend reforms combined was an expensive exercise for them, 0:18:50.200 --> 0:18:52.840 and I don't think there's the political will to go 0:18:52.920 --> 0:18:55.720 near negative gearing for some time. It's not even been discussed, 0:18:55.840 --> 0:18:59.159 not by either party. However, on Super, you make the 0:18:59.200 --> 0:19:02.800 point that he's making the point folks that the new 0:19:02.880 --> 0:19:09.919 supertax which kicks in a three million and then you 0:19:10.000 --> 0:19:14.120 pay fifteen percent new tax over on any earnings over 0:19:14.160 --> 0:19:16.680 three million, that that is going to be it's going 0:19:16.720 --> 0:19:20.280 to hit his property plans in Super over the long 0:19:20.320 --> 0:19:23.440 period of time because it's not indexed, there's no plan 0:19:23.480 --> 0:19:26.000 to index it. I would say to you, Alex, yes, 0:19:26.000 --> 0:19:29.159 it's not fair that that new tax isn't indexed. It 0:19:29.240 --> 0:19:33.200 should be indexed. It also shouldn't be on unrealized gains. 0:19:33.600 --> 0:19:35.480 It should be on realized gains, and if they count 0:19:35.600 --> 0:19:38.840 that it should be deemed. But I would just say 0:19:38.880 --> 0:19:41.080 it's a long you're talking about a long period of 0:19:41.119 --> 0:19:45.639 time and whether a particular supertax was or wasn't indexed 0:19:46.800 --> 0:19:50.360 in thirty years time is unlikely to make a major 0:19:50.560 --> 0:19:56.160 impact on your property returns, he says bravely. But that's 0:19:56.240 --> 0:19:59.560 my view. What do you think, Anthony, I. 0:19:59.520 --> 0:20:02.480 Agree with you on the negative gearing side. I think 0:20:02.520 --> 0:20:06.359 that once bit and twice shy with with the Labor Party, 0:20:06.400 --> 0:20:10.119 but also with these new unfair sort of tax plans. 0:20:10.160 --> 0:20:11.879 I'm a bit of an optimist on that, and I 0:20:11.920 --> 0:20:14.679 figure we are going to have a coalition government at 0:20:14.720 --> 0:20:16.600 some time in the next ten or twenty years, and 0:20:16.640 --> 0:20:20.119 I think that they're going to fight back against some 0:20:20.200 --> 0:20:24.800 of the most unfair parts of that those rules. I 0:20:24.880 --> 0:20:28.560 really think that it's not going to last. So thinking 0:20:28.600 --> 0:20:31.800 of what government's saying today is probably going to be 0:20:31.840 --> 0:20:34.880 completely different sort of ten twenty thirty years from now, 0:20:35.040 --> 0:20:38.159 and I think it eventually everything does revert back to 0:20:38.960 --> 0:20:41.719 fairness as well. It just might take time. And if 0:20:41.760 --> 0:20:43.440 you get your own you're go unlucky enough to get 0:20:43.440 --> 0:20:45.280 caught out at the period where it is unfair. And 0:20:45.320 --> 0:20:48.119 we might see that next year with some several horror 0:20:48.200 --> 0:20:50.120 stories that unfold in the next year or two. Once 0:20:50.160 --> 0:20:53.040 that new tax comes in people being forced to sell stuff. 0:20:53.200 --> 0:20:55.520 Yeah, exactly. I think you might have some farmers that 0:20:55.560 --> 0:20:58.159 go brook or something or have terrible stories, and that 0:20:58.200 --> 0:21:01.040 will be enough to turn the public to actually, first 0:21:01.040 --> 0:21:02.520 of all, have a look at it, see what is 0:21:02.520 --> 0:21:04.960 actually wrong with it. It's hard to feel sorry for 0:21:04.960 --> 0:21:07.080 people who have three millions, super I take that on 0:21:07.119 --> 0:21:11.800 board in two seconds. But also taxes, taxes should have 0:21:11.840 --> 0:21:15.440 a certain shape and they should be broadly equitable, as 0:21:15.480 --> 0:21:17.240 you say, across the board. Okay, do you want to 0:21:17.240 --> 0:21:18.480 read the question from Christopher? 0:21:18.720 --> 0:21:21.919 Yes, So Christopher is wondering what we think will be 0:21:21.960 --> 0:21:25.800 the impact of a Trump presidency on the Australian dollar. 0:21:26.320 --> 0:21:29.639 That's the easier or decent US ATF that focuses on 0:21:29.880 --> 0:21:33.879 US energy stocks because he expects that they're about to 0:21:33.920 --> 0:21:37.240 go gang busters if it's Trump gets in. John may 0:21:37.320 --> 0:21:41.800 to have a thought. Yes, sure, yes, I was. It 0:21:41.840 --> 0:21:43.800 was Yeah, I think he might be on the money 0:21:43.800 --> 0:21:46.560 as far as demand for US energy stock. So I 0:21:46.640 --> 0:21:51.080 heard that Donald Trump and his frenzied crowd chanting at 0:21:51.080 --> 0:21:54.200 one of his rallies or speeches Drill baby drill, Drill 0:21:54.240 --> 0:21:56.480 baby drill. That was what that was calling for. And 0:21:58.359 --> 0:22:01.480 so that does. But as far as the impact on 0:22:01.480 --> 0:22:03.560 the Aussie dollar, some of the stuff that I've read, 0:22:03.600 --> 0:22:05.800 I'm not a currency specialist, but obviously, like you, I 0:22:05.800 --> 0:22:07.680 get a lot of stuff comes across my desk all 0:22:07.720 --> 0:22:10.200