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From the Land down under, here is the 87th Edition of the Festival of Stock
2008-05-05 04:01:00
G'day and welcome to the 87th edition of the Festival of Stock s at Finance ViewPoint. This festival highlights the best stock-market related posts in the Blogosphere. If you are new to this site, I am an expat Aussie living in America using this blog as a medium to write about personal finance and investing from a local and global perspective. This is the first time I have hosted a blog festival (or carnival as it is called elsewhere) and was pleasantly surprised at the number of submissions I received - despite some blog carnival technical issues over the weekend. Through this process I really enjoyed discovering a number of great articles written by some inspiring bloggers. I have added a little bit of Aussie slang and some pictures from back home to the various categories to show off a bit of local pride. Enjoy.These are beauties mate (Editors Picks):- GBlogger presents Allocate 50% to Non-U.S. Stocks, According to Wharton Professor posted at CAN I GET RICH ON A SALARY. An insig...
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COMPETITION TIME - Win the Seeds of Wealth DVD Set
2008-05-04 16:55:00
I will be running my first give away competition at Finance ViewPoint this week. Courtesy of Wealth Within, I have got 2 Seeds of Wealth DVD sets. I am keeping one for my reference and giving away the other DVD set -valued at $79 (pictured here). In the DVD, Dale Gillham talks you through why including shares in your investment portfolio is key to your financial future, and demonstrates how you can out perform most other asset classes, including property. Through his logical, practical and down to earth style he gives you easy to follow trading strategies, that incorporate money management rules and simple trading plansEntering the competition is easy - just enter a comment over the next couple of weeks on any post you read on this site and I will randomly select a winner of the DVD set from the various comments. You can submit upto 3 comments for inclusion in the competition, but each relevant comment must be against a seperate post. The competition closes on April 18 2008 and I wi...
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Weekly Market Report - How should you play T3
2008-05-03 05:25:00
Investors in Telstra 3 will have to decide this month if they will pay the final installment of $1.60 per share. Given that investors have already paid $2.00 for the first installment, the second installment due by 29 May will bring the total investment to $3.60. The question, however, is should investors pay the second installment or take their money and run?Currently T3 shares are trading at $3.02 and based on an initial purchase price of $2.00 this represents a gain of 66.26% excluding dividends. When the second installment is paid the T3 shares convert to ordinary Telstra shares which are currently trading at $4.62, therefore the investors profit in T3 will drop to around 28.33% excluding dividends.Given that investors may be sitting on some tax losses due to the recent market pull back, it may be wise tax planning for investors to realise their profits in T3 to offset these losses. Of course investors also need to take into account the effect of receiving the bonus offer of 1 e...
More About: Market , Play , Report , Weekly

A century, American taxes and Allocating $100,000+
2008-05-02 04:51:00
This is a jam packed post covering a few items. Firstly I would like to proudly announce that I have passed the 100 subscriber mark (hence the century reference in the title) as you can see from the subscriber counter in top right corner of the site. This was one of my mid year goals I was fortunate to achieve a few months early - so thanks to everyone who subscribed and if you haven't joined the 100+ other subscribers you can do so by clicking here. Now back to work. Here are 2 pertinent reader questions I received in the last few weeks. Sorry for the delay in getting back to the readers who submitted this, but my day job has been keeping me busy.Question 1: I wanted to ask if you could do something on choosing shares in a super funds. We have over $100,000 invested in super with 70% in shares. 75% in is the Aussie market and 25% in emerging global market funds. I have long term view with this super, it will be there for another 15 years or so. What factors should we consider when...
More About: Taxes , American , Century

Tips on Teaching Kids to Save and Invest
2008-04-30 22:37:00
How many times have you looked back on life and wished that you had started investing earlier? Teaching your children, or grandchildren, a few simple lessons about saving and investing can start them off in the right direction toward a secure financial future, and can be as easy as 1, 2, 3.Step 1: The value of savingsTeaching your children about saving money for a specific purpose is key to instilling good investment habits for the future. The lesson is a simple one -- if you want something, you have to save your money for it. Talk to your children to find out what it is that they want (chances are they've already told you this during your last trip to the toy store). Once you know what it is and how much it will cost, work with your children on how they can save for it by using their allowance. Give your children options for reaching their goals, such as saving all of their allowance for a certain number of weeks vs. saving half of their allowance for twice as long. This teaches y...
More About: Kids , Tips , Invest , Save

What MBA students really want
2008-04-30 03:53:00
The NY times recently reported on a survey of M.B.A. students at 15 major business schools in the US, where respondents listed the factors most important to them in choosing a job. The No. 1 factor was not money as most would expect, but ?challenging and diverse job responsibilities." Given an average MBA costs around $100,000 I was also surprised at the the fourth-most-important factor which was ?potential to make a contribution to society.? However, I am glad that money is not the be-all and end-all for these leaders of the future. Here is full list of responses. Source : NY TimesRelated post : Cost Comparison ? Top Australian MBA Programs versus US MBA Programs
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Centro (CNP) and Insurance Australia Group
2008-04-28 03:51:00
Two stocks I have recently talked about had some newsworthy information today that I thought I would briefly talk about in this post.Centro (CNP) ? Decision timeFollowing my previous posts on this stock, it has been very volatile and I?m sure a lot of day traders have made and lost a lot of money on it. With D-day now approaching (Wednesday) Centro must get approval from the banks to extend its $4.2 billion debt repayment, or face receivership. There are a number of potential suitors lining up to buy parts of or the whole group, but the key question for existing shareholders is at what price. Also, it is more than likely the banks will consider extending the due date for the debt if there are some serious offers on the table. However, I think after Wednesday the Centro share price will stabilise based on the offer details being made publicity available in the media. This will put a firm floor on the stock price and should reduce the overall volatility.In a recent note to clients, Ma...
More About: Insurance , Australia , Group

Repeating past investing mistakes and market outlook
2008-04-27 03:36:00
This week it was announced that Chartwell Enterprises had joined the list of investment companies that have gone into administration in the past year. While it appears that corporate greed is a major contributor to the company?s downfall, whether there is any legal action taken against Chartwell either by ASIC or clients is yet to be determined.What concerns me is that investors are failing to learn from the past given that we hear the same stories every decade. Any company promoting returns of 70% p.a. needs serious investigation by prospective investors simply because high returns normally means high risk. As with any good investment strategy however, it is important to diversify your assets and to never place all your eggs in one basket. While every asset carries risk, it is important that investors educate themselves to ensure they understand the level of risk they are taking before they invest. So what can we expect in the market?Last week I indicated that for the market ...
More About: Market , Outlook , Investing , Past

My Journey to Successfully buying a Home
2008-04-24 16:09:00
A good friend of mine recently bought a house in Sydney, after a long and ardorous search. In talking with him I thought his journey to buying a house would make a great post. He was kind enough to agree to write something for Finance ViewPoint and here is his story with real numbers. Thanks for taking the time to do this EH. There are some great learning points here when or if you are already looking to buy a place in today's tough housing market.Recently my wife and I got married, and for us this was an easy decision. A harder decision was working out where we were going to live and how we wanted to go about becoming financially secure. I have jotted down some of the experiences that we went through recently that may enlighten and assist you in the process of buying a houseFirstly we had to decide where we wanted to live. For me I didn?t care too much but my wife certainly did. She had an area picked out near her parents and family and friends. While it was not a deal breaker for...
More About: Buying , Real Estate , Journey , Home , My Journey

Lame way to tackle Fuel Prices
2008-04-22 22:47:00
The Australian Competition and Consumer Commission (ACCC) announced yesterday that motorists would get at least 15 hours notice to buy petrol before prices increased under a government fuel monitoring scheme.Some points of note from the announcement were:- The ACCC will operate the scheme, which is expected to start by the end of the year and will give consumers information about the next day's petrol prices via text messages, email or website.- Consumers will know when the price is going to increase or decrease and they can therefore defer their buying until they (fuel prices) get to their lowest points."- Every petrol station that was part of the scheme would be required to lodge with the ACCC their proposed fuel price for the following day. The ACCC would then publish those prices within one hour of the information being lodged. The price would apply from 6am the following day for 24 hours.- "More importantly through SMS services, through email and through our website, you will ...
More About: Fuel , Lame , Prices

Winner of SOW DVD competition and Weekly market report
2008-04-19 21:07:00
Firstly I would like to announce that louise is the winner of the SOW DVD competition thanks to her comment on the Investing 101 : Selling Shares post. Congratulations. Louse - click here to contact me via email so that I can get your address details for sending the DVD set to. Thanks to everyone how left a comment over the past 2 weeks while the competition was running.With that, here is the latest installment of Dale Gillham's weekly market report:Everyone enjoys the market when it is bullish because it is generally easier to generate positive returns without too much effort. It is not until we experience the events of the past 9 months that we really regain our respect for the share market because we tend to fall into a false sense of security believing the bull run will last forever.In the past 4 months, many shares have fallen heavily including Centro, ABC Learning Centres, Allco, Tattersals and Tabcorp to name a few, falling as much as 50% or more. Unfortunately many investo...
More About: Market , Competition , Report , Winner , Weekly

Buy into QBE
2008-04-17 00:09:00
With the recent proposed and rejected merger/takeover the game is on between Insurance Australia Group (IAG) and QBE. The first offer was a salvo by QBE to see the reaction of investors and regulators. It was never meant to be the final offer and I think they will pay more to takeover QBE. I have written a number of times on both stocks and my preference is still QBE. I say this despite owning IAG shares, which have had a nice rise over the last week. IAG's stock closed at $4.38 yesterday compared with the $3.99 value of QBE's stock and cash takeover offer. So the market clearly expects a higher offer. I wouldn't be surprised if other local and overseas suitors are re-running the numbers over IAG, now that QBE has made its interest in the stock official.Here's what the analysts are saying:- QBE could pay as much as A$5 a share for Insurance Australia, Credit Suisse Group analyst Arjan van Veen said in a note to clients today. Citigroup Inc.'s Nigel Pittaway estimated a price of...

Save time - 3 Free sources to get your Australian dividend and tax informat
2008-04-15 22:24:00
Recently, a close family member was finalising his taxes and one the challenges he encountered was getting his stock dividend information for the past financial year. For many of us who own dividend paying stocks, we generally get 2 dividend payments in the year. Normally you get an online or mailed notice when each of these payments are made (you can make this election when you initially buy the stock). But, like a lot of us, you normally read these notices and forget about them. Then when tax time comes around, you are desperately running around to find the dividend notices and more often than not you can't find one or more of them. Trying to calculate the dividend payments and associated taxes manually can be a frustrating, complex and time consuming exercise as every payment is different based on the number of stocks owned, franking credits, franking percentage and other information you need for your tax return. Fear not though, I have the answer to make this task simple.A litt...
More About: Time , Free , Australian , Save , Sources

Top Income and Dividend Stocks
2008-04-14 03:23:00
High yield cash savings accounts in Australia (like ING Direct, Bank West) are currently providing an 8% or so pre-tax return. Not bad when you consider that the stock market is down more than 20% this year. Why would you even think about investing in the stock market, when getting an 8% return is so easy and risk free? Well, because the after tax returns of stocks are going to be much higher than the cash savings account over the medium to long term. A stock provides two sources of return ? capital growth and more importantly in this climate, dividend income. I agree that the capital growth aspect is pretty lousy at the moment, but there are some solid dividend paying stocks to look for that pay a better than 8% return over the next couple of years. Also, if you include franking credits from dividend payments, the dividend income can be substantially higher when compared to the equivalent after tax return from high yield savings account. An 8% pre-tax return on a high yield cash ac...
More About: Stocks , Income , Dividend

Statistical World Clock
2008-04-14 02:20:00
Here is a really cool widget I was sent via email. It is a statistical world clock that shows medical,social and science related figures. Some very interesting numbers.Return to Home Page
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Investors need to be better informed
2008-04-12 17:57:00
Here is the latest installment of Dale Gillham's weekly market report:The collapse of Opes Prime last week once again highlights the need for investors to be better informed and better educated. It seems that all too often we hear stories of consumers losing money because of companies going bust. Some of the blame needs to be placed squarely in the hands of the regulators who need to ensure consumers are properly informed before they invest, but consumers also need to take responsibility to ensure they understand what they are investing in.Investors tend to focus considerable attention on returns and costs, and while these are important, consumers need to look beyond this to ensure they are fully informed and educated about the investment they are undertaking. As an educator and fund manager I see many investment opportunities come across my desk and on the surface they generally look pretty good but once I read the fine print, most end up in the bin. It seems that only after these...

Investing 101 : Selling Shares
2008-04-10 21:19:00
I am starting a new series of posts called "Investing 101 : <Topic Name>", where I talk about some basic, yet overlooked aspects of investing. In this post I talk about knowing when to sell a share or stock - often much harder than the process you go through when buying it. Knowing when to sell a stock, and actually doing it, is tough and that is why most people like to buy and hold stocks. What is especially tough is selling a stock on which you are losing money. Rather than cut ones losses, most people - including me - hold onto losing stocks when we really should have sold. A lot of this is driven by emotion - when you sell when a stock is down, you feel like you're giving up. When a stock's price is soaring, people are less reluctant to sell because they don't want to miss any upside, enjoy seeing the share price rise every other day and/or feel that it will keep rising forever, especially in a bull market -  even though that can be the best time to sell....
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Is Dubai the place to be? A review.
2008-04-08 18:55:00
Dubai, the shining light of the Middle East, is going gangbusters. It has enjoyed two decades of rapid growth, going from a small desert city to a western society representation of the riches the Arab world has to offer. The economic growth has fueled strong demand for foreign workers and they have been coming in troves to this Desert oasis in the pursuit of (tax free) wealth and a pampered lifestyle. Professional white collar and executive level expats have mainly come from the UK (who controlled the region until 1971) and Europe. However of late there has been a strong influx of Australian and American citizens drawn to regions high paying jobs. Most jobs come with perks like housing allowances, international schools for the kids and home help. However, like all things that look too good to be true there are also various drawbacks to living and working Dubai. Here I examine both sides of the argument - the pro-Dubai side and why the place may be over rated. Feel free to share your...
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Interesting Reading - The Clinton's Tax Returns, 2000-2006
2008-04-07 22:05:00
Want to know what a US president or Senator earns? Then check out the Clinton's tax returns for the last few years, available via the link below from slate.com. For the year 2000, Hillary Clinton (occupation: attorney) and her husband, Bill Clinton (occupation: U.S. president) paid close to $50,000 in federal income taxes on their adjusted gross income of $357,000. For 2006, Hillary (occupation now: US Senator) and Bill (occupation now: Speaking & Writing) had upped their adjusted gross income to more than $16 million and paid $4.6 million in annual federal taxes. The way their income has grown, you can definitely conclude that politics has been great for them and see why Hilary now wants to be president.read more digg story
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Weekly Market Report - How prepared are we for retirement?
2008-04-05 02:33:00
Here is the latest installment of Dale Gillham's weekly market report:A common question that is often asked is how prepared are we for retirement? According to statistics, approximately 1 in 5 people are not sure they can afford to retire and one third don’t know how much money they need in retirement, while the remaining believe they can comfortably retire at age 65. The concern for many investors nearing retirement right now, however, is whether they will have sufficient income given that the volatility in the share market in the past nine months has had a significant impact on superannuation funds. Add to this the fact that we are living longer and you can start to see why there is continuing concern that many may not have enough to sustain themselves in retirement.Given this, when it comes to investing it pays to ensure you spread your risk across various asset classes so as to minimise your exposure to the downside risk in any one asset class. In other words, building up a d...
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Update on Centro (CNP) - Up 60% since my review 2 weeks ago
2008-04-03 17:34:00
Centro Properties Group (CNP) jumped 71% yesterday on news from the Australian Financial Review (AFR) that it was believed to have received six offers, including from private equity firm Blackstone Group, Citadel Investment Group, Macquarie Group Ltd (MQG) and investment management group Lighthouse Partners. The offers were at up to around A$0.90 a share, the paper said. Responding to a query from the stock exchange, Centro said in a statement it was unaware of any reason for the sharp move in its shares. It said it remained in talks with a number of parties and lender groups in relation to its recapitalization process, but the talks remained incomplete. "At this time, there is no certainty or assurance that these discussions will lead to a transaction, what form such transaction may take, or what value might arise out of a transaction, if any," it addedI had done a detailed review of the stock a few weeks ago, when it was at $A0.35. My final comment was "....the stock is worth a p...
More About: Update , Centro , Weeks

Lower Air Fares with the Australia/US open-skies agreement?
2008-04-01 17:04:00
Australia and the USA have signed an open-skies agreement, eliminating air travel limits between the two countries. The accord will now allow more US and Australian based carriers to fly on this route, increasing competition and hopefully lead to lower fares.  This agreement breaks the long-standing monopoly of the direct route enjoyed by US carrier United Airlines and Australia's Qantas. Officials who signed the agreement said, "Eliminating restrictions on US-Australia air services means lower fares, more convenient service and more opportunity for travellers, commerce and carriers to thrive," Currently an adult fare from Sydney to Los Angeles direct costs between $A2100 and $A2300. United Airlines is generally 3-8% cheaper than Qantas, but it is one of the worst airlines (in my opinion anyway) due to the lack of passenger amenities, onboard service and older planes. Qantas, relatively speaking, is the better airline. But if you are not flying from/to either N...
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Market Volatility
2008-03-31 02:26:00
Here is an insightful quote from Thomas Friedman in a recent New York Times speech..."When we were young kids growing up in America , we wereTold to eat our vegetables at dinner and not leave them.Mothers said, think of the starving children in India and finish the dinner.'And now I tell my children: 'Finish your homework. Think of the children in IndiaWho would make you starve, if you don't.'?" With that, here is the latest installement of Dale Gillham's weekly market report:Given that the volatility in our market has continued to unfold in recent months, many are beginning to question whether the share market is really a good investment. However, as many of you would know with every pull back there are always opportunities that present when the volatility settles. Over the past few months many of the top shares on our market have fallen as much as 30% to 50% in price and while this presents some great opportunities for those who are patient, the question that a lot of investo...
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Proposed 2008-2009 tax cuts - Are they fair?
2008-03-28 21:19:00
From News Limited media reports, here are the expected tax cuts (on average) for next financial year:- Workers earning $15,000 or less will have their tax rates cut by 75 per cent, to just $150 a year- Those earning $35,000 a year will get a tax cut of $20.19 a week, equivalent to 3 per cent of their salary- Those on an average wage of $55,000 are in line for an extra $15.86 a week; and those on $60,000, $11.53.- At the higher end, those on $150,000 or more a year will get the equivalent to just 0.7% of their pay or about $20 a week.Australia's lowest-paid workers will be the big winners when $31 billion in federal tax cuts come into effect on July 1. I guess this confirms that the Labour party is back to its roots in helping the low and middle class income families per their election promises. Treasurer Wayne Swan said the previous federal government had turned its back on battlers - "For too long under the Liberal Party, low and middle income earners missed out on genuine relief ...
More About: Fair , Cuts , 2008

Stock Roundup - BHP, RIO, Babcock and Brown (BNB), Worley Pasrons (WOR) and
2008-03-27 19:36:00
One stock that I have written about a number of times is Babcock and Brown (BNB) - Australia's second largest investment bank behind Macquarie Bank (MQG). I own this stock (bought @ $27) and even thought it is trading around $15, I am still holding on to it because I believe it is a solid company, well financed and a good long term growth stock. It has been caught up in the global maelstrom of the credit crisis and because it's model uses a lot of debt to fund projects (which is repaid via the steady stream of income these projects generate). I really do believe it is going to be a $40 - $50 stock in 3-5 years time. This was demonstrated by recent news that 25 banks have backed increasing Babcock debt facility by 19 percent to A$2.8 billion. The firm said the renewal, foreshadowed in its 2007 results, reinforced the strength and flexibility of its balance sheet. ``That 20 basis point increase in cost looks to be a pretty good result for them given the tension in markets is clear...
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Australian Stock Market Newsletter Reviews - Part 1 of 2
2008-03-27 06:58:00
This is a 2-part post looking at some of the leading Australian stock market newsletters, or stock reports as some are called. In these volatile market times it is more important than ever to spend more time researching market trends and related stocks before buying or even selling. Having a detailed review and recommendation done by professionals that provides in-depth objective analysis on the facts and figures is very useful. Also, it provides a way to stay in touch with some of the smaller and up and coming stocks which have strong growth potential. These reasons are what got me to start looking at some of the leading newsletter and reports covering the Australian stock market. This article provides a summary of my findings and basis for my future subscription decision. So how did I find the “leading” stock market newsletter and reports? I already knew of a few from being an active investor for a number of years and also did various Google searches around the keywords “Aus...
More About: Reviews , Stock Market , Market , Stock , Newsletter

The big banks are at it again - more interest rate rises!
2008-03-25 14:46:00
The National Australia Bank (NAB) has broken ranks with major banks and lifted its standard variable home loan by another nine basis points (0.09%). From Wednesday, NAB's standard home loans will attract a 9.36 per cent interest as the bank seeks to cover the increased costs it is paying for wholesale funds.The move equates to about an extra $15 a month on an average $200,000 mortgage for NAB customers. It is a worry for the RBA (Reserve Bank of Australia), in terms on monetary policy control, when the big retail banks act independently of the RBA. The RBA sets the official interest rates, but it is the banks who execute the actual rate changes from a consumers perspective. So if the banks start going out on their own and changing interest rates, the RBA's influence over monetary policy is greatly diminished. NAB Australian head Ahmed Fahour said the latest rate hike reflected "sustained increases to short and long term wholesale funding costs". The reason behind this ...
More About: Banks , Interest , Rate , Interest Rate

Tax Rebate checks won't get spent
2008-03-25 14:01:00
The majority of Americans say they plan to put their $300-$600 tax rebate checks in the bank or use it to pay off debt, according to a recent CNN poll. Perhaps, the IRS/Government should send out gift cards instead of cash checks, so that consumer spend the rebates and pump up the economy? $50 gift cards for each of the major retailers could be the go.Also, the rebate is not really free money. Apparently it will be added to your taxable income next year (in 2009) - a fact not publicized too much. The rebate is just a band aid solution by politicians in an attempt to buy votes and show that they are doing something to save the economy!read more at CNN.
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Recovery Stocks worth looking into
2008-03-22 23:30:00
From the latest Aegis equity newsletter, here are the stocks that they think have potential to recover (potential buys). I have covered two of them on this site before - Centro Property group(CNP), Babcock and Brown (BNB), which I would still say are risky for now. BNB is one that I do own and like for the longer term. Do you fancy any from the list?Click on the picture to expand.Per some of my previous posts, I am still staying away from buying right now. However, I always am on the lookout for quality stocks that could be great buys when the markets stabilizes in a few months.
More About: Stocks , Recovery , Worth

Want to know more about Australia?
2008-03-21 17:11:00
Happy Easter everyone. Unfortunately here in the states, there is no long weekend with Friday and Monday being working days. So while my friends and family in Australia are relaxing in the southern hemisphere sunshine, I thought I would take this opportunity to provide some historical background and facts about Australia to my American, European and Asian readers. If you have any questions about Australia, just leave a comment on this post and I will try and get you an answer.Historical background : Aborigines probably first settled in Australia around 40,000 years ago, having moved down from South-east Asia. A British settlement was established at Port Jackson (now Sydney) in 1788. Initially, the settlement was intended to be a penal colony only, but free settlers soon began arriving in substantial numbers. The transportation of convicts from Britain to New South Wales continued until 1840. Sustained UK investment in urban development, farming and mining resulted in rapid economic ...