Archive for November, 2018

Investor Angie Ellis reveals the secret of her Shares Race success

13/11/2018

The Sunday Age,Money. Angie Ellis is the reigning champion for the 2017 Shares Race, pictured with her dog cushion Charlie.Pic Simon Schluter 10 November 2017.
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Angie Ellis has won more of the four-week shares races this year than any other competitor, including the professional tipsters.

Not only has she won more four-week competitions, she was leading the one-year race all year and was just pipped to the post in the final results published last week.

So what are her secrets for success?

It all started when Ellis seeded her family share portfolio from the proceeds of investment properties about four years ago.

The 46-year-old from Melbourne has an investment style best described as “growth”.

She prefers to invest for capital gains rather than holding the local market’s big dividend payers like the big banks.

Her family portfolio is separate from her superannuation, which allows Ellis, a trained accountant, to take more risks knowing her retirement savings are protected. Speculative

Ellis is much more speculative for the four-week Shares Race than she is with the one-year game and her family portfolio.

For the four-week race, in which eight competitors select 10 stocks with a hypothetical $10,000 in each, she likes to see strong share price gains with no down days before the race starts.

“It has to be an easy-to-understand business that is also a ‘hot’ share,” Ellis says. “I pick shares in sectors that are trending up and that are receiving a lot of media attention.”

Ellis also likes to see the directors of the company themselves as well as fund managers buying shares in the company.

With her star pick Digitalx, a facilitator of overseas money transfers using digital currencies, Ellis ended the last four-week race of the year, which she won, with her original $10,000 worth $31,250.

“I like companies that have a global outlook and a lot of my shares are not just Australian based,” she says.

Ellis has done very well from A2 Milk Company in her family portfolio, whose products include infant formula.

“There were a lot of articles in the Australian Financial Review about A2 Milk and about milk formula generally in China,” she says.

“I went to the supermarkets and you could see that it was flying off the shelves and I spent the whole week looking at A2 Milk.Then, I was helping a girlfriend out who had broken her knee and I opened her fridge and there were half-a-dozen bottles of A2 Milk in her fridge and I started buying A2 Milk at about 80c.”

A2 Milk’s shares are now worth almost 10 times that.

Of course, just like any share investor, Ellis has had her fair share of disappointments.

For her family portfolio she bought Buddy Platform, a platform for monitoring and reducing consumption of electricity, water and gas, among other things.

She bought the shares for about 13c in May last year and sold out a year later for 5c.

Almost immediately after selling the shares, they rocketed to about 35c.

“I’ve learnt that sometimes it takes a while for the market to catch-up on why these businesses are amazing,” Ellis says. Year-long race

For the one-year shares race and for her family portfolio she puts more emphasis on companies with strong revenue and profit growth and good “tailwinds” for the business.

She wants to know how a company is going to generate cash, grow its business and strengthen its economic “moat”, the barrier to entry for new competitors.

Ellis’ pick of Big Un, the parent company of Big Review TV, helped to finish in the long race as well as helping her to win many of the four-week races.

She bought shares in the company in late January this year for 42 cents and they are now trading at about $3.50.

The Big Review TV platform integrates multimedia to provide a hub for people to search, view and review businesses, events and destinations.

It has a global focus and strong revenue growth. She took the time to understand the business model and contacted a few of its customers to see if they were happy and would be likely to resubscribe to the service.

Ellis took the opportunity to realise her huge gains from Big Review TV to plough 80 per cent of the sale proceeds in jewellery retailer Lovisa, which became her largest holding in her year-long portfolio.

The company is rapidly expanding overseas and recently opened a “pilot” store in Los Angeles.

Ellis has a contact in Los Angeles who sent Ellis some photos of inside the store showing it bustling with customers.

Last year, Ellis visited a QVB store in Sydney with her daughter and after seeing the store doing a brisk trade, bought more of the company’s shares.

Ellis attends the company AGMs to make a point of meeting the chief executive and the board. Offshore holdings

Ellis has 30 per cent of her family portfolio invested in global markets with much of her international exposure held in Australian-listed exchange traded funds (ETFs).

These are funds that track not only sharemarket indices, but a variety of markets such as the gold and oil prices.

One of her ETFs tracks the share prices of the biggest companies listed on Asian sharemarkets.

She has further exposure to emerging markets through a managed fund with a focus on the Indian sharemarket.

Ellis holds only two overseas-listed shares directly; Amazon and Twitter, which are listed on Wall Street.

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The secret to happiness? Why giving feels so good

13/11/2018

Is having wealth the secret of happiness? The fact that millions of Australians buy lottery tickets every week, even though they have less than one in a million chance of winning, suggests that the majority think it is. But the evidence is very much to the contrary.
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Many lottery winners end up broke after less than two years, and the papers are full of stories about rich families fighting over the family fortune. One well-known book, Navigating the Dark Side of Wealth: A Life Guide for Inheritors by Thayer Cheatham Willis, tells about the challenges faced by those who have been “unlucky” enough to be left huge sums of money by billionaire relatives.

There is no doubt that nothing can take the place of money in the areas where money works. Margaret Thatcher put it succinctly, “the good Samaritan needed more than good intentions – he needed money as well”. The problem is that money of itself cannot give meaning to our lives.

This leads us to the big question – how can we arrange our finances so that we enjoy our money and are not burdened by it? If we can believe Elizabeth Dunn and Michael Norton, the authors of the new book Happy Money: The New Science of Smarter Spending, it might be time for a radical rethink on the ways we spend our money.

They point out that, for most people, experiences turn out to be far better value for money than purchases. Certainly, a new car gives you quite a buzz the day you drive it home, but after a few weeks you become accustomed to it and it becomes simply another thing you own. In contrast, money spent on a holiday that has long been on your bucket list gives you wonderful memories for years to come.

But the big surprise was their recommendation to invest in others. They discuss an experiment in which participants told the researcher how happy they were, provided their phone number for follow-up, and then received a mysterious envelope.

Many envelopes contained a $5 note with the instruction to spend it before 5pm on a gift for themselves, or for expenses such as rent or food. Other envelopes carried a $5 note with a different instruction: to spend the money before 5pm on a gift for someone else, or a donation to charity.

Just to broaden the experiment, some of each type of envelope contained a $20 note instead of a $5 one.

After 5pm, all the participants were phoned and asked to report their level of happiness now that the day had passed. Overwhelmingly, individuals who had spent money on others were happier than those who spent money on themselves – even though there had been no differences between the two groups at the beginning of the day.

The twist in the tale was that the amount of money in the envelope made no difference to their feelings. How the money was spent mattered far more than the amount they were given.

I asked my wife, who was a psychologist, why giving money away has such a positive effect on our well-being. She explained that it is because the person who makes the gift feels they are contributing to society and benefiting future generations, while enjoying the feeling that they have made a contribution without any thought of benefit to themselves.

Did you know that many retirees die with more money left in their superannuation than they had when they retired? This is because they tend to live more frugally after they retire because they don’t know how many years they have left. For them, making donations to worthy causes is a wonderful way to add meaning to their lives, as well as gaining the happiness of seeing what a huge difference their generosity has made to other people’s lives.

Let me conclude with a quote from American poet Rod McKuen: “The gifts that one receives from giving are so immeasurable that it is almost an injustice to accept them.” I reckon that sums it up.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: [email protected]南京夜网419论坛

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How a property slump would affect homeowners

13/11/2018

Recent headlines have flagged a fall in Australian capital city house prices. But does it mean anything for you?
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CoreLogic’s November Hedonic Home Value Index showed that in November there was a -0.1 per cent fall in capital city dwelling values. This was, however, offset by a 0.2 per cent rise in regional values.

During the quarter ending in November, house values went backwards in Sydney (-1.3 per cent) and Darwin (-2.7 per cent). Sydney is crucial in national housing data: it holds one-third of the country’s housing value. But if you look at the big picture, there is no need to panic.

Firstly, capital cities are coming off very strong growth trends – the types of price rises we’ve seen so far are hard to sustain long term. It’s no surprise the market needs to take a breather.

But if property values do fall, what effect does it really have on you?

A few tips:

Don’t panic: property value is influenced by market sentiment, interest rates and economic data. You can do nothing about these factors, but you can control your investment timeline: view property in 10-year windows, and try to buy well. Take the panic out of it.

Two-way traffic: Australian house prices don’t always rise: they fell in the early 1950s, the early 1990s, in 2008 and 2010. Realise that the market will always have ups and downs – it’s the nature of it.

Realised losses: value indices are theoretical until you sell and realise a loss or gain. As long as you meet repayments, the bank doesn’t call in a loan just because the value drops. You can still live there and wait until prices rise.

Renovations and investments: this is where a slump can become real. If you want to access equity to fund a renovation or buy an investment property, a lower house value could crimp your borrowing power.

Short term: given the time and costs of buying and selling property, a short-term “flipping” strategy could be uneconomic if values trend down. Fix this by thinking long term.

Giant pool: don’t be fooled by terms such as “Sydney property” or “Australian housing”. They’re vast markets and an “average” or even a “median” may not mean much to you. Lenders are very specific, using a valuer’s assessment right down to the street and house.

Budget: only when you’re forced to sell do low property values become an issue. So, take control of your household budget, ensuring you can meet repayments and retain your house through a price slump. This is crucial when interest rates start to rise.

Protection: along with household finances, ensure you have adequate insurances to cover repayments in case you can’t work. Don’t be forced to sell when the market is down – that’s when you lose money.

Advice: if you’re worried about values, stay close to experts such as mortgage brokers and real estate agents. Don’t be panicked – be informed.

The family home is most people’s largest asset, and it’s normal to be concerned about its value. But always base your decisions on real information and expert advice.

Mark Bouris is executive chairman of Yellow Brick Road.

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Best of the best: Don’t wait until the new year to find a better deal

13/11/2018

Why wait until the new year to make resolutions for your finances? Money asked researchers to nominate their best picks for several types of financial products and investments. Use the holiday season to shop around for a better deal. Saving for retirement
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Industry super funds dominate the table of the best-performing funds of past 10 years that are open to anyone.

Rest Super’s Core Strategy investment option tops the table with an average annual compound return of 6.1 per cent, followed closely by another industry fund, CareSuper’s Balanced investment option, with a return of 6 per cent over the decade.

All funds listed in the table comfortably exceed SuperRatings’ industry benchmark of 4.7 per cent, the median return of the largest 50 funds.

There are a few key areas to consider when assessing whether a super fund is a quality provider, says Camille Schmidt, market insights analyst at SuperRatings.

The investment performance may be strong, but is it consistent or will the up and downs of the returns keep you awake at night, Dr Schmidt says.

It is also important to look at the fees and whether they are reasonable. By comparing the overall fee to equivalent products, you can determine whether a fund is relatively cheap or expensive, she says.

And consider whether the fund meets your needs in terms of product flexibility and other services, she says.

For example, can you change investment options easily, does it have a mobile phone application, if that is important to you, and can you access relevant investment seminars and financial advice, Dr Schmidt says.

Australian share funds

Perpetual’s Wholesale Ethical SRI has an average annual compound return over the past 10 year of almost 8 per cent to make it the best-performing Australian shares fund.

Another Perpetual fund, the Wholesale Share Plus L/S, is in second spot with a return of 7.3 per cent. Investors Mutual’s All Industrials Share fund is in third with a return of 6.6 per cent.

Chris Douglas, director of research ratings at Morningstar Australasia, says it is important to assess a fund’s performance over the long term so they can see how a manager has performed over various market conditions.

“And the 10-year performance numbers in the table comprise a wide range of market conditions, including the dramatic sell-off during the 2008 GFC when the local Australian equity market was sold off by almost 40 per cent and 2012-13 when the market was up by more than 20 per cent,” Douglas says.

“All the funds displayed in the table have steered investors through some tricky conditions,” he says.

However, investors need to be careful about extrapolating past performance into the future, Douglas says.

Managers make changes to how the money is managed and key investment staff responsible for the good performance can leave, he says.

And choosing a fund will depend a range of factors to do with your personal circumstances, such as whether you are investing mainly for capital growth or for income. Home loans

Mitchell Watson, the research manager at Canstar, says despite the Reserve Bank keeping the cash rate on hold since August 2016, there’s been plenty of changes in lenders’ interest rates.

That is why it is important for home owners and investors to be consider whether their loan interest rate is still competitive, he says.

“It’s important to not only consider the interest rate but also the fees and the features of the loan meet your needs,” Watson says.

The table also shows the “comparison rate”, which helps consumers identify the true cost of a loan.

It factors in the interest rate, most fees and charges and displays a single percentage rate that can be used to compare various loans from different lenders.

Low-rate cards

In the lead up to the festive season, a no-frills credit card can support your spending while keeping your interest costs to a minimum, says Bessie Hassan, money expert at comparison site Finder.

“Low rate doesn’t mean these products come without fees,” she says.

“You can still incur fees, like an annual fee, which could set you back a hundred dollars or so per year, and late payment fees, so you’ll need to factor this into your budgeting,” she says.

For those looking for a really low purchase rate, there are a limited number of cards offering zero percent interest rates on purchases for a year or more.

However, it is important to pay-off the balance that was transferred within the zero interest rate period and to make sure that subsequent debt racked-up on the card is paid off, in full, each month, Hassan says.

These cards can often revert to a particularly high purchase interest rates at the end of the zero-interest period, she says.

Amex cards with frequent flyer points

Frequent flyer credit cards offer you points on your everyday spend that can be redeemed for a number of items like flights and accommodation.

There are a number of frequent flyer programs and Money has chosen to ranks cards that provide points for Qantas, the largest frequent flyer program.

When it comes to frequent flyer cards, the most important features are the “earn rate” (the number of points earned per dollar spent on the card) and the “burn rate” (how many points you need to spend to redeem a reward). The number of sign-up bonus points and the annual fee are also important.

Finder’s Bessie Hassan says as all of these cards have purchase interest rates of 20 per cent or more, these are only worth considering if you’re sure you can pay off your balance in full at the end of each month.

MasterCard/Visa cards with frequent flyer points

The interchange regulations, enforced in July this year, have seen frequent flyer programs devalued across the board.

Providers have dropped earn rates and there are tighter caps, where, once you exceed a certain spending threshold no more points or fewer points are earned.

“But don’t be blinded by the rewards alone,” Hassan says.

“These products typically come with higher annual fees and high interest rates so it’s essential to weigh up your options to see if the benefits outweigh the costs,” Hassan says.

Correction: The annual free (apart from the discounted first year fee) is $299 rather than $200 on the Qantas Premier Platinum card. Online accounts

There are two types of higher-earning savings accounts on the market – those with an introductory high rate (relatively speaking, given cash rate is at historic lows) and those with a ongoing high rate.

Introductory rates tend to only last for a few months, and after that the earning rate drops sharply – down to as low as 0.8 per cent.

The table shows the best accounts with ongoing interest rates.

Those with an introductory rate will have a bonus interest rate that is paid provided the saver meets certain conditions.

For example, often this simply involves getting your wages paid into a linked current account, making a minimum deposit into the account regularly, or using a debit card a few times a month, Finder’s Hassan says.

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From snail mail to SMS: the HSC wait is almost over

13/11/2018

It was 1967 and about 18,300 students who had sat the first HSC exams were anxiously waiting for their results to arrive – by post.
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Another 30 years later, in 1997, students could call a phone number and have a recorded message read their results to them.

This year, exactly 50 years after the first HSC, nearly 78,000 HSC students will wake up to text messages at 6am on Thursday with their marks for each subject and the bands they achieved.

Students now wait nearly a month less than students did 20 years ago to get their HSC results, and will get their Australian Tertiary Admissions Rank (ATAR) the next day.

And the way results are delivered is not the only thing that has changed.

Students in 1967 had a choice of only 28 subjects, compared to the 140 subjects available to this year’s cohort.

In 1967, about 90 per cent of students did maths, another 80 per cent were studying a science subject and a massive 37 per cent were studying French, the most popular language.

Now, about 83 per cent of students are studying maths, 52 per cent are doing science and French is no longer the most popular language, with only 1.8 per cent of students choosing it this year.

Instead, Japanese has been the most popular language for more than 20 years, with 1446 students, or 2.1 per cent of the cohort, electing it this year. In 1967, just five students did Japanese.

The ATAR which was introduced in 2008, has also evolved over the years.

The current ATAR is based on a student’s 10 best HSC units, with a maximum possible ATAR of 99.95, and used by many universities to assess applicants.

The very first rank was based on a student’s five best HSC courses and was replaced by the Tertiary Entrance Score (TES), in 1976.

The TES, which was based on a student’s 10 best units and had a maximum possible score of 500, was replaced in 1990 by the Tertiary Entrance Rank (TER), with a maximum rank of 100.

The Universities Admission Index (UAI),was adopted in 1998 to bring in a common scale across all states. In NSW, the maximum UAI was 100, and it was administered by the Universities Admissions Centre (UAC), which is now responsible for the ATAR.

Harsha Kumar, 18, from Rooty Hill High School, said the wait for results has been difficult.

“I’m extremely nervous, I’m scared I’ve gotten out of exams going ‘it was great’ and I’ve actually done really terribly,” Harsha said.

She has already had offers from two universities but is hoping to get an ATAR over 85 to get into media and international relations at UNSW.

Jayden Hicks, 18, Sabrina Zamaan, 17, and Braydon Hurley, 18, from Rooty Hill High, are also waiting for their results before they decide what to do next year.

“It’s finally good to sit back and relax after the HSC, although it’s an anxious wait for results,” said Braydon, who is hoping to study law or criminology next year and eventually wants to start his own law firm.

Sabrina, who wants to become a dentist, said she has received a conditional early offer for oral health at the University of Sydney, but still needs to get an ATAR of 78.

Jayden, who has been accepted into the Australian Film Television and Radio School, said he will apply to do a bachelor of arts at Western Sydney University if he gets an ATAR above 80.

“I’ll get very close to that but I’m not too nervous about it because I have a back up plan in case I don’t get what I want,” he said.

Follow the HSC results live on smh南京夜网419论坛 from 6.30am on Thursday.

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