Ok, I understand now. By investing in USD, the probability of upside is two folds: (1) AUD value would come back, and (2) Lower US cost of debt.
Thanks, IV
Aussie dollar at parity right now
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Ok, I understand now. By investing in USD, the probability of upside is two folds: (1) AUD value would come back, and (2) Lower US cost of debt.
Thanks, IV
Ok, I understand now. By investing in USD, the probability of upside is two folds: (1) AUD value would come back, and (2) Lower US cost of debt.
Thanks, IV
actually hopefully three fold:
(a) appreciation of the underlying investment.
However its not as easy as it sounds, with QEII, overseas equity markets are also going up (including the US), this makes it harder to create investment positions. Especially as AU$ seems to be correlated to the performance of overseas equity markets.
Anyone who could not understand parity was a given and who feels "We'll soon back to 80c where we belong." should be day-trading, not making long term investments.
Stick to your original statement all you like, this is a 'democratic' forum, everyone is entitled to an opinion, that doesnt make the opinion right.
I might not trade, but thats because i invest, and dont want to barstadize the two (and be successful at neither).
Anyone who is 'day trading' to a position of 80c will be constantly incurring the red stuff.
By the way beautiful attempt at diverting the comment, by then mentioning my own investment style.
That's my current plan minus the borrowings. Have reactivated my international account (been a while since I bought any US stocks) and will start dripping some small cash in each month while our $A is high. Only going for relative blue chips and not using any leverage so it's not going to be a big play, but I'd like to get some exposure.
I reckon $1.20 is more likely than 80c but that's IMHO. But the big international blue chips look an attractive option for writing covered calls, if your broker can do those trades for you. Think Microsoft, Coke, J&J, Cat not Starbucks and Krispy Kreme.
Currency revaluation CAN take the gloss of a good trade though. The A$ has also appreciated 20% against the loonie and I just put the old fx rate of $1.25 into my spreadsheet and I have lost $70k in paper profit in the few years that this revaluation has taken.
What about some mid tier miners? An American (producing) gold miner's returns will continue to increase as the US$ POG rises and I would rather 80% of a healthy and rising profit than 100% of a shrinking one.
Currency revaluation CAN take the gloss of a good trade though. The A$ has also appreciated 20% against the loonie and I just put the old fx rate of $1.25 into my spreadsheet and I have lost $70k in paper profit in the few years that this revaluation has taken.
What about some mid tier miners? An American (producing) gold miner's returns will continue to increase as the US$ POG rises and I would rather 80% of a healthy and rising profit than 100% of a shrinking one.
Wouldn't be talking enough money invested to be writing covered calls.
Would definitely be interested in smaller stocks with good growth prospects (eg. mid tier miners like you mention) however that would involve a lot more in depth research into many hundreds of companies. At this stage I'm just thinking of dipping my toe into the water with some blue chips. If I come across smaller co's then would definitely give them a look as well.
While I recognise that the US economy is sick and may remain so for some time, the co's that I'm looking at (not necessarily buying yet/at all) are definitely global co's with global revenues (and increasingly larger proportion of those revenues from outside US).
I am however aware that the companies I'm looking at are BIG. So I don't expect explosive growth. One of the main reasons I wouldn't want to leverage into US stocks. I have (I hope!) plenty of Aussie stocks that are offering large growth expectations. This is more a play on diversification, a partial play on the exchange rate (baring in mind I'm going in slowly, not all guns blazing with a trigger point of US$1.01) and to be honest something I quite enjoy.
Would definitely be interested in smaller stocks with good growth prospects (eg. mid tier miners like you mention) however that would involve a lot more in depth research into many hundreds of companies. At this stage I'm just thinking of dipping my toe into the water with some blue chips. If I come across smaller co's then would definitely give them a look as well.
While I recognise that the US economy is sick and may remain so for some time, the co's that I'm looking at (not necessarily buying yet/at all) are definitely global co's with global revenues (and increasingly larger proportion of those revenues from outside US).
I am however aware that the companies I'm looking at are BIG. So I don't expect explosive growth. One of the main reasons I wouldn't want to leverage into US stocks. I have (I hope!
) plenty of Aussie stocks that are offering large growth expectations. This is more a play on diversification, a partial play on the exchange rate (baring in mind I'm going in slowly, not all guns blazing with a trigger point of US$1.01) and to be honest something I quite enjoy.Wouldn't be talking enough money invested to be writing covered calls.
Check it out. A "contract" there is only on 100 shares and there are thousands of shares and indices liquid enough to trade. A steady rising market is the right environment to use that strategy. IMHO of course.
this trend is worrying.
we're getting a lot of bond buying on the backs of these rate rises and we're going to have to pay these bonds back with real money.
but we're runnign a $52bil deficit?
what?
we're getting a lot of bond buying on the backs of these rate rises and we're going to have to pay these bonds back with real money.
but we're runnign a $52bil deficit?
what?
Going to live like it up in Shanghai next week. !!!
well, latest figures say it is a 56b deficit.
Aussie bonds are being bought because risk is on.....thx to lack of credit, cheap property mx coming on stream, and QE2. GO FIGURE.........
worry needs company
The responsible thing would be to quote the figure you mention ie $56billion as a percentage of GDP. Suddenly, its not as scary as you might want it to be.
WW, do you see the deficit as yet another conspiracy? Is this reason enough for us to bunker down or head for the hills? *giggle* Crikey mate, why is it the bulk of your posts are gloomy in nature? Have you ever seen blue sky?
The responsible thing would be to quote the figure you mention ie $56billion as a percentage of GDP. Suddenly, its not as scary as you might want it to be.
WW, do you see the deficit as yet another conspiracy? Is this reason enough for us to bunker down or head for the hills? *giggle* Crikey mate, why is it the bulk of your posts are gloomy in nature? Have you ever seen blue sky?
Ease up Mec, people will be thinking you're running chicken, trying to unload property into a falling market by talking your book.
Sounds like a build up for another crash and burn,that 52 billion will have another 10 billion added on very quickly now because did Labor do the numbers on the Australian Dollar being at 85 cents or 90 or even 95 in their pre elections numbers they sold too the public,just wait till "OIL"
breaks into the above 95 dollars a barrel range..
Plus it would be wise to study the total after tax dollar returns on the US Bonds some have zero returns over the past ten years,..
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Gj voting independents, unions and greens in.
Oh well at least it means, taking each political party in order (independent, union, green) you'll get that $1bn hospital in Tasmania (must be world's most expensive hospital), get to work 1 day a week and still be paid 5 (but your employer will soon go out of business leaving you jobless anyway), and get to pay some inheritance tax on all your assets when you die (what else can you tax when people are jobless, oh yea their assets hohoho).
Oh well at least it means, taking each political party in order (independent, union, green) you'll get that $1bn hospital in Tasmania (must be world's most expensive hospital), get to work 1 day a week and still be paid 5 (but your employer will soon go out of business leaving you jobless anyway), and get to pay some inheritance tax on all your assets when you die (what else can you tax when people are jobless, oh yea their assets hohoho).
What is this place? Greece?
In the making. I think it's called Australia though just let me check on the atlas
just chuck another $4bil on, no one will know i'm sure - just ridiculous.
i reckon we're going to see a global currency quicker than i previously thought - the only way to get out of debt like this is to print print print and devalue the debt that the dollar is tied to, through inflation. ZBW printed like wildfire to erode their debt and pay back the IMF, and now their currency is so worthless that you can only buy things in grams of gold - ie a kilo of mealy-meal is 0.3g, a litre of milk is 0.1g, loaf of bread is 0.2g etc.
i'm out of 'growth' property. sorry - but the writing is on the wall - growth is subjective, cashflow is not.
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can you connect some dots here for me please BC.... what is the link between inflation and being out of growth property? Won't the personal debt deflation be your friend?
yes absolutely - but not if IRs are hiked to match and contain. i know growth + high IRs = good, but not so good if your wage isn't moving to compensate.
and no, i'm not using govt stats - just what i see every day talking to people.
the key is the trifecta - inflation, IRs and wage growth.
wages haven't moved in real terms in a good 3-4 years. inflation is running, IRs are running.
that means that prices go up, cost of your debt goes up, but your ability to service said debt does not. if your wages aren;t moving then your debt effectively doesn't, either, because your money buys no more than it did previously.
from your cashflow scenario, that sounds like the same effects that deflation would have. but assets are gorwing, so where's the problem, right?
if no one can afford the rising costs, land prices fall but house construction prices go up because of inflation.
i'm not a bear, but just being realistic. property is still an amazing wealth vehicle, but play your cards close to your chest.
and it just something i've seen playing out. growth in this country will be hard to contain so here's a scenario that stops it.
