General Markets Talk

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SM said:
Curious for thoughts in here with rising interest rates, whether they believe they can get better returns investing in the market than they can offsetting the interest on their mortgage? I'm toying with the idea of pulling my investments out and just sticking in an offset against my mortgage which in theory sees a ~6% 'return'. Or is the view that having multiple investment streams advantageous?
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More of a personal risk tolerance question at this point of the cycle. But for me, I'm proceeding with caution and keeping a balanced approach with cash in the offset to reduce interest and keep dry powder, while still maintaining some exposure in the market. With the S&P up ~20% YTD, NASDAQ ~36%, even the ASX ~7%, I'm not seeing a whole lot of opportunity to generate above average returns from here given the economic outlook.

All that being said, from what little I've seen from reporting season so far, some companies are beating expectations and projecting quite rosy forecasts.
 
Grin said:
I've sitting on quite a bit of cash (about 20% of my portfolio) which has been reassuring but frustrating at the same time because it feels like a waste. I bought 30,000 shares in BBOZ yesterday arvo. My strategy is that I now don't need to hold as much, or really any cash, so I can have most/all of my money working for me rather than sitting in the bank, whilst at the same time taking more risk on the upside.
Does that make sense or is it really dumb?
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Leaving it in BBOZ for more than a couple of days is a bad idea as the returns quickly get disconnected from the market. If you want to take a risk adverse approach with 20% of your funds then I'd look at cash, gold, or a bonds ETF instead.

BBOZ is designed for people hedging against an event within the next ~72 hours, or corporates hedging against risk at certain times. It's not designed as a set and forget anti-ETF and doing so will only lead to horrible outcomes even if the market does tank.
 
Have we not for years now been hearing about sophisticated investors with massive amounts of cash on the sidelines ready for deployment? When are they going to deploy? Or are they never going to deploy?

The concept of keeping excess cash uninvested is odd to me, particularly when I read the statistics about timing the market. Though I'm happy to admit there are many people who make out better than I do in the financial markets.

Regarding investments vs interest on the mortgage, I think that's completely based on the stage in life. Personally, large mortgage + young dependents, I'm parking excess cash (after super contributions) in the mortgage. On either side of that scenario (no children or children about to leave the nest), I'd be investing. I don't think the interest rates matter on this one, though again, my personal take.
 

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sabre_ac said:
Have we not for years now been hearing about sophisticated investors with massive amounts of cash on the sidelines ready for deployment? When are they going to deploy? Or are they never going to deploy?

The concept of keeping excess cash uninvested is odd to me, particularly when I read the statistics about timing the market. Though I'm happy to admit there are many people who make out better than I do in the financial markets.

Regarding investments vs interest on the mortgage, I think that's completely based on the stage in life. Personally, large mortgage + young dependents, I'm parking excess cash (after super contributions) in the mortgage. On either side of that scenario (no children or children about to leave the nest), I'd be investing. I don't think the interest rates matter on this one, though again, my personal take.
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Pretty sure this just means Warren Buffett is sitting on cash waiting for an appealing opportunity.
 
sabre_ac said:
Have we not for years now been hearing about sophisticated investors with massive amounts of cash on the sidelines ready for deployment? When are they going to deploy? Or are they never going to deploy?

The concept of keeping excess cash uninvested is odd to me, particularly when I read the statistics about timing the market. Though I'm happy to admit there are many people who make out better than I do in the financial markets.

Regarding investments vs interest on the mortgage, I think that's completely based on the stage in life. Personally, large mortgage + young dependents, I'm parking excess cash (after super contributions) in the mortgage. On either side of that scenario (no children or children about to leave the nest), I'd be investing. I don't think the interest rates matter on this one, though again, my personal take.
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Ditto. I don't see a lot of value in the markets right now so I've been paying down the margin loan and parking cash in the mortgage offset account.

I do think we're close to the end of the rate cycle though so Q1 in 2024 will be a time to reassess and start accumulating.

I do have DRP active in a bunch of holdings so I can passively accumulate small amounts over time anyway.
 
Mofra said:
Ditto. I don't see a lot of value in the markets right now so I've been paying down the margin loan and parking cash in the mortgage offset account.

I do think we're close to the end of the rate cycle though so Q1 in 2024 will be a time to reassess and start accumulating.

I do have DRP active in a bunch of holdings so I can passively accumulate small amounts over time anyway.
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Yeah close to topping up MQG but it's really hard to see much that's at a reasonable level to buy, especially when you have the option atm to park cash at 4+%.
 
TEG - high risk gas play.
Large producers surrounding them in WA
 

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Kram said:
Tried punting on energy juniors early on but had no luck and I just find them too hard to understand.

Things like gold, nickel, lithium exploration, development and mining isn't overly hard to get an idea of as a layman imo.
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Energy can be a bit more volatile, for sure.
Lithium - only hard rock interests me. The longer lead times for brine just make me nervous.
 
The Aus dollar:

'In the aftermath of the GFC, the Australian dollar soared to post-float highs inflicting some serious damage on the economy. It hit around $US1.10 against the greenback and 0.86 Euros.

Now, it's running the other way. Despite running trade surpluses since 2017 and this year clocking up the first budget surplus in more than a decade, the Aussie is on the slide.

It's a trend that looks likely to become entrenched for two reasons: commodities and interest rates.'
www.abc.net.au

The Australian dollar is on the slide, and no-one knows just how low it will go

Despite years of trade surpluses and a budget surplus to boot, the Australian dollar is on the slide once more — and it's all thanks to commodities and interest rates, writes business editor Ian Verrender.
www.abc.net.au www.abc.net.au
 
glenn2479 said:
CXO taking a bath the last few days. Also RNU getting slammed.
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That CXO cap raise at a 25% discount to SP is awful for holders, even worse when you consider what they were trading at a couple of months ago.

I actually had them on a watchlist from a post ages ago but I avoid buying downtrends. Learned my lesson the hard way many many years ago.

I do think that presents a potential buying opp. but not for a while. I'd want to see proper price support first.
 

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