It’s no secret the mining boom has ended. Across the country, towns that were previously roaring given their proximity to Australia’s in demand natural resources, have ground to a halt. The massive influx of workers that swamped those towns pushing up living costs have now disappeared, leaving businesses struggling and real estate without demand. That lack of demand for real estate has decimated property investors who’d swooped on these previously hot locations. News articles have documented the hundreds of thousands (even millions) of dollars of equity that have been lost on single properties. We’ve previously documented this here for Gladstone,…

Ten years ago, in another country, a man we’ll call Bill, died at 75. He left his wife, a lady we’ll call Betty, $50,000 and a house worth $350,000. Betty was 65, living on a government pension and no longer wanted the hassle of the house. So she sold it, but before leaving she asked her next-door neighbour for advice on investing the proceeds. Her neighbour pointed Betty towards his financial advisor. Soon Betty was set up with a portfolio that paid her rent and offered her income in addition to her pension. Then 2008 happened. Betty’s portfolio fell by…

Economic Overview Divergent policy cycles remained a significant theme in 2015. US authorities responded to improving economic conditions by raising interest rates for the first time in nearly a decade, while central banks elsewhere opted for further stimulus. China continued to add stimulus to an economy whose growth rate in 2015 fell short of the official 7% target. The Central Bank cut interest rates six times in 12 months and, in August, devalued the yuan by 2%.   With conditions subdued in Chinese manufacturing and construction and global industrial production weak, commodity prices declined. Iron ore and base metals were…

Being the end of the year, it’s the time when all the financial and economic predictions for the New Year are flying around. Take your pick, but they’ll mostly be wrong or revised mid-year by those who made them so they don’t look so bad. Or they’ll be mildly conflicted. One of the more interesting predictions out there was printed in the Fairfax papers – The Age, Sydney Morning Herald, Australian Financial Review and likely across their regional network. It was made by real estate group Domain and suggested the following: Predictions of a deflated housing market in 2016 continue…

When a share market has a poor year diversified investors generally have their pain quarantined for various reasons. Investors holding share funds aren’t likely to have their holdings limited to one share market. They’re also not likely to be holding only share based investments. Any portfolio worth its salt would include fixed interest, listed real estate and cash. With global share markets offering differing returns and the various asset classes doing the same, a 5% decline on the ASX this year shouldn’t be an issue for the diversified investor. For the DIY hot share tip merchant, trying to pick the…