Abolish Negative Gearing

[drsmith]

One would think that after the disasters of Timbercorp and Great Southern that deductions for dodgy agricultural schemes would be plugged once and for all, but it appears not.

http://www.smh.com.au/business/macquarie-linked-to-forestry-investment-scheme-20100707-zzv4.html

 

[drsmith]

One would think that after the disasters of Timbercorp and Great Southern that deductions for dodgy agricultural schemes would be plugged once and for all, but it appears not.

http://www.smh.com.au/business/macquarie-linked-to-forestry-investment-scheme-20100707-zzv4.html

The PDS from Mac Bank bangs on about fees, but the most interesting part is the assumed net sale proceeds from the timber at harvest. From the most optimistic assumption their fine forestry projects offer a return of $19500 for your $10000 investment after 11.5 years.

That's 6% pa if all goes well.

http://www.macquarie.com.au/au/mfg/acrobat/macquarie_forestry_pds.pdf (p57)

Macquarie offer loans to finance the investment (being the kind hearted souls that they are) at about 10% pa.

 

[Julia]

Julia my dear,

I would not for a minute suggest that companies can't fall over or indeed cut dividends in a downturn. In fact that further exemplifies my point about property. You can lose a tenant and indeed you can have a profit downgrade resulting in a reduced dividend.

I ask you the question though, despite capital movements, how do NAB or WOW or TLS dividends stack up against the current interest rates available. Yes there is capital risk bu that is why we invest in shares and property.

BTW I own NAB shares and a property leased to woolies for the next 15 yrs by way of disclosure. Oh yeah, i also have a telephone and internet connection.

I am off now to replenish my glass of pepperjack 01 and to see if GG is online somewhere. I have a meeting in the morning that requires my best.

Irish Joe (I'll forgo the 'my dear'), I posted the following on another thread yesterday:

Yes, of course markets function on sentiment, so if gloom is flavour of the times, markets will fall. All very well to say that if someone is selling, someone is buying but that's a bit simplistic. The falling market shows that the sellers have the upper hand.

Whether one holds, or buys in at such times, is surely influenced to some extent by one's stage in life, whether there is other income available.

If you're 20 and looking to invest for the long haul, then of course it makes sense to buy in gloom.

But if you're a retiree, living off what your capital can generate, imo you're substantially better off selling when the downturn starts, going to cash (interests rates up to 8%) and preserving your capital. Then when a real uptrend resumes, buy back in.

And no, I doubt too many time this to perfection. But I'd rather give back a little profit at the top and at the bottom for the security of keeping my capital intact.

In another few months it will be three years since the Nov 07 peak of around 6500 and the XAO finished today at under 4300. So to all those people who say "ah, but prices will come back" or "I'm almost back to where I was in November 07" just consider (a) you could have re-entered after the March low, buying more shares than you held before, with consequently increased dividends, and (b) you could have continued to show a capital gain from interest in the meantime.

1. Re the comparison of dividends from TLS, WOW, NAB, last time I looked neither WOW nor NAB had a yield of more than 8%. They may now given their falling SP's. TLS is probably more, but I wouldn't have wanted that in my p/f over the last while, thanks.

2. Re property: yep, agree with you completely. And I've had very profitable IP's in the past. But I no longer want the concerns of maintenance, tenants etc.

We will all have our own investment styles. That's not to say any of them are 100% right or wrong.

Disclosure: I have been all in cash for the last several weeks.

 

[irish joe]

Irish Joe (I'll forgo the 'my dear'), I posted the following on another thread yesterday:


1. Re the comparison of dividends from TLS, WOW, NAB, last time I looked neither WOW nor NAB had a yield of more than 8%. They may now given their falling SP's. TLS is probably more, but I wouldn't have wanted that in my p/f over the last while, thanks.

2. Re property: yep, agree with you completely. And I've had very profitable IP's in the past. But I no longer want the concerns of maintenance, tenants etc.

We will all have our own investment styles. That's not to say any of them are 100% right or wrong.

Disclosure: I have been all in cash for the last several weeks.

See pm. re nab and wow ,factor in fanking credit.

Re property, my point was really to highlight that 1. good assets be they property or shares will deliver ayield that justifies holding them. If you bought CBA in the float and held them until now would you sell. NO. If you owned apropety for the same period and prices in the area fell would you sell,NO.

I am big on sustainable income because yield is what ultimately drives growth in property and equity investments.However you should invest in whatever floats your boat, allows you to sleep comfortably and delivers the outcomes you are looking for. personally, I believe in diversification and as such would never be in 100% in any one asset class but that is my choice.

 

[sptrawler]

What better time to resurect this thread,
Abolish negative gearing, the government saves $5b, all the overgeared investors bail out.
All the retirees, getting $hit returns bail in.
Win win for the government, watch this space.lol

 

[Aussiejeff]

What better time to resurect this thread,
Abolish negative gearing, the government saves $5b, all the overgeared investors bail out.
All the retirees, getting $hit returns bail in.
Win win for the government, watch this space.lol

What?

You mean the poor will get richer and the rich will get poorer?

Are you stark raving??

May the Farce be with you......