Search Results for: bubble
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3 REITs to watch out for
Roger Montgomery
May 24, 2017
A REIT, or Real Estate Investment Trust, is an entity that owns income-producing real estate. Think of a managed fund that concentrates on property rather than stocks and you have the idea for a REIT. REITs offer investors a partial interest in the rental income, capital appreciation and/or development profits of a variety of property classes from residential to industrial.
Continue…by Roger Montgomery Posted in Investing Education.
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Index funds lack checks on stocks they buy
Roger Montgomery
May 15, 2017
If you’re an educated investor, should you be investing in index funds? We don’t believe so. And the reason is simple: index funds are not selective in their approach to buying and selling stocks, and ignore the long-term drivers of returns, such as ‘value’ and ‘quality’.
Continue…by Roger Montgomery Posted in Editor's Pick, Investing Education.
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Why residential real estate is a poor investment right now
Roger Montgomery
May 2, 2017
Have you ever wondered why Australia has no listed residential REITs (real estate investment trusts)? The simple answer is that they would offer poor returns. And, these days, the returns would be worse than ever. But the good news for would-be buyers is that the property price bubble could be about to end. Continue…
by Roger Montgomery Posted in Editor's Pick, Property.
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Investors in index funds should be very cautious
Roger Montgomery
April 27, 2017
In December 2014, I wrote an article for The Australian titled ‘Beware the lure of the ‘cheap’ index fund: it’s full of junk’. Today, I’d like to repeat that warning. Investors who think ETFs give them safety through diversification are no more protected than those who invested in mortgage backed collateralized debt obligations (CDOs) before the GFC. Continue…
by Roger Montgomery Posted in Investing Education.
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Do our pollies have a vested interest in keeping the property bubble inflating?
Andreas Lundberg
April 21, 2017
In the last month or so, we’ve seen a big surge in news articles and commentary about Sydney and Melbourne’s housing bubbles. But to the consternation of many people, there has been a reluctance by our politicians to introduce meaningful reforms. Could the reason be that they are among the nation’s most aggressive property investors? Continue…
by Andreas Lundberg Posted in Property.
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ABC Nightlife radio featuring David Buckland
David Buckland
April 19, 2017
Australia is often described as ‘The Lucky Country’ – we have natural resources, good weather and distance from problems elsewhere in the world. Financially we were relatively untouched by the global financial crises – it might seem we are in good stead but you never know what the future holds. David Buckland joined Philip Clark on ABC Nightlife and here is a summary of some of his points: Continue…
by David Buckland Posted in Market commentary.
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We could be wrong about the property bubble (but we don’t think we are)
Roger Montgomery
April 6, 2017
There’s an unfortunate trait amongst the broader population of investors that a rising price reaffirms their investment thesis. Take, for example, ever-rising house prices. Continue…
by Roger Montgomery Posted in Property.
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Banks and property investors should brace for increased capital requirements
Stuart Jackson
March 31, 2017
One of the drivers behind the recent bank rally has been a perception we are over the worst of the risks around increasing regulatory capital requirements. But are we? A report card from the Basel Committee on Banking Supervision indicates this view might be a little premature. If so, there could be ramifications for banks and property investors alike. Continue…
by Stuart Jackson Posted in Editor's Pick, Financial Services.
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Could the Government’s lending restrictions backfire?
Stuart Jackson
March 28, 2017
The law of unintended consequences states that actions – particularly by government – can have adverse effects that are unanticipated or unintended. This law could soon play out as a result of lending restrictions placed on the major banks by the Australian Prudential Regulation Authority (APRA). Continue…
by Stuart Jackson Posted in Market commentary.
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Are we “wrong” on property?
Roger Montgomery
March 21, 2017
Before we begin, thank you all sincerely for your engaging comments and your feedback here on the blog. And the thanks even extend to those whose disagreement is so vitriolic that their comments cannot be published. Fortunately, as investors we are used to disagreement; every time we buy a share, the seller has the completely opposite view. So, keep the comments coming – we may not publish your expletives but we always enjoy the process of investigating and understanding the divergent views. Continue…
by Roger Montgomery Posted in Editor's Pick, Property.
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Listen carefully … that’s the sound of the property market tipping over
Roger Montgomery
March 20, 2017
In this article published in The Australian, Roger talks about the end of the property bubble and explains why the boom in prices has little to do with anything other than historic low interest rates. Read here.
by Roger Montgomery Posted in In the Press.
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Hold on tight: the great property sell-off has begun
Roger Montgomery
March 17, 2017
The much derided prediction of a sell-off in Australian property prices has finally started. Prices in some cities are starting to fall. Rental yields are becoming unsustainably low. And many property buyers are now at the point of ‘no return’ (yes, the pun is intended). Continue…
by Roger Montgomery Posted in Editor's Pick, Property.
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The Australian apartment market – will the luck run out?
David Buckland
March 9, 2017
An article by Duncan Hughes in today’s Australian Financial Review entitled “Off the plan apartments prone to 30 per cent falls” discusses the need for buyer caution. Continue…
by David Buckland Posted in Property.
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ETFs inevitably boost the value of fewer outperformers
Lisa Fedorenko
March 3, 2017
Across the investment world, ETFs are on the rise. And for good reason – as Tim recently noted, ETFs outperform many actively managed funds. But the growing popularity of ETFs is having another consequence – it is making outperforming managed funds even more valuable, and pushing underperforming funds out faster. Continue…
by Lisa Fedorenko Posted in Investing Education.
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How ‘hot’ Chinese money is fuelling our property bubble
Roger Montgomery
February 8, 2017
Lately, we’ve seen an increasing number of media articles about how Chinese ‘investors’ are snapping up our real estate assets – and, in so doing, pushing prices beyond the reach of many Australians. How do they do it? Here’s the answer, direct from the South China Morning Post… Continue…
by Roger Montgomery Posted in Editor's Pick, Property.
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Investing in 2017 and beyond
Roger Montgomery
December 17, 2016
If you are concerned about your returns, you should brace for an end of the residential construction boom. You should also be very cautious about the excessive prices of high-yielding stocks (those paying dividends that are unlikely to grow), and you should be most enthusiastic about high-quality mid cap and small cap stocks that have been punished recently with share price declines of up to 50%.
Continue…by Roger Montgomery Posted in Property.
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Warning to property investors: you’re trapped in a bubble
Roger Montgomery
December 1, 2016
In this article for Professional Planner, Roger discusses the key ingredients of a property bubble. Read here.
by Roger Montgomery Posted in Editor's Pick, On the Internet.
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So bond rates are not ‘lower for longer’
Roger Montgomery
November 28, 2016
For most of 2016, we have warned investors about the dangers of accepting historically low bond rates as the ‘new normal’. The reality is that US 10-year rates lower than at any time since George Washington was sworn in as the first President of the United States is anything but normal.
Continue…by Roger Montgomery Posted in Market commentary.
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I am calling a short sell on Australian residential apartments
Roger Montgomery
November 4, 2016
If you wait for the swallow to sing, spring will already be over. In other words, waiting for the data to prove a trend has changed may be more expensive than you’d like. And while there is plenty of mounting data to suggest that property prices are heading for a big fall, there are also less obvious signals. Continue…
by Roger Montgomery Posted in Editor's Pick, Property.
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Warning lights flashing for economy
Roger Montgomery
October 31, 2016
I have previously explained how, in an environment of low interest rates (that will eventually rise), and record high asset prices (that will eventually decline), now is the time to instruct to your adviser to investigate alternative strategies such as market neutral funds. After reading today’s blog you may be asking your adviser or the team at the family office team to ‘speed it up’.
Continue…by Roger Montgomery Posted in Market commentary.
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