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Most liked posts in thread: Bonds vs. HISA: some new insights

  1. Zaxon

    Zaxon The voice of reason

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    I was doing a search on Google about bonds, clicked on a link that sounded interesting to me, and low and behold, I ended up here...on my own thread. lol. See @Joe Blow, our posts are discoverable and making a difference.
     
  2. Value Collector

    Value Collector Have courage, and be kind.

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    Given the huge amount of pages that Ben Graham dedicated to analysis of corporate bonds in his books security analysis and the intelligent investor, I think he lent towards a large chunk of the bond allocation going towards corporate bonds.

    But as Buffett says, you should never own debt in a company you wouldn’t be willing to hold the equity of.

    So going down the bond route doesn’t mean you have less security analysis work to do, it just means you are accepting a slightly different risk/reward ratio, you still have to have a good understanding of the business, unless you are going for a diversified etf type shot gun approach to your bond portfolio.
     
    aus_trader and Zaxon like this.
  3. aus_trader

    aus_trader

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    I think for a US citizen either would provide a safe yield.

    I thought I'd never see the day that RBA would surpass the US interest rate cuts in race to the bottom to see who could get to zero first. Testing times ahead... I think even the most conservative of investors would be fed up of getting nothing on their cash. Just wandering if there are other safe assets that can provide a good yield without the volatility of shares. If it could stay flat or go up in recessions that would be a bonus. The reason for asking is I'm not sure how secure the 250k bank deposit guarantee is, so I am happy to spread my bank cash into different safe asset classes in case the Govt don't honour it in a banking crisis type scenario.
     
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  4. Value Collector

    Value Collector Have courage, and be kind.

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    I have said it a few times, but the rate setter platform is a decent place to store a portion of your cash.

    In my opinion, it is safer than low interest government backed deposits, which are guaranteed to lose over time due to taxes and inflation.

    —————-
    Buffetts number one rule is “don’t lose money” and that has become a cliche that is thrown around, in my opinion it is a very miss understood quote.

    It leads people astray because they think they should be avoiding risk, when in reality it means preserve and grow your buying power.

    In today’s climate, it’s impossible to preserve your buying power using government backed deposits, and silly to think you can grow your buying power using them.

    You must take on some risk to achieve a satisfactory return, the key is to build a portfolio of assets, with varying attributes that as a group provide as steady return of growth and income through the cycle.

    I believe platforms like rate setter can be part of such a balanced portfolio,
     
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  5. Value Collector

    Value Collector Have courage, and be kind.

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    If we are talking about managing capital over a long time frame Eg 10+ years, good low/no debt income generating property can operate as a quasi inflation hedged bond.

    Yes property prices can fluctuate, but so do bond prices.

    Over time a good piece of debt free real estate will provide regular income over and above its outgoings, that will grow with inflation over time, and more than likely out perform any government bond at today’s rates.
     
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  6. Joe Blow

    Joe Blow Administrator Staff Member

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    Yes, we do get a fair bit of search engine traffic. Currently around 850-900 visitors on an average weekday, which results in approximately 200 or so new member registrations each month.

    It's really the only thing that's keeping us alive.
     
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  7. Zaxon

    Zaxon The voice of reason

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    Property certainly can be a good investment. I feel, however, that buying an investment property is like having kids. It's a massive commitment. You need to have it tenanted, you're bound to get bad tenants at times, and then there's all those repair costs. Then you go to the tribunal to fight over the bond, and then you go grey...prematurely.

    The civilized version of holding property is via a REIT. They're mostly office, warehouse, and retail, they're not really a drop in replacement for residential property. And REITs did badly in 2008. Mind you, physical property in the US did terribly in 2008. But I feel that REITs are more aligned with the share market than physical residential, so I don't know how much diversification they really add.
     
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  8. SirRumpole

    SirRumpole

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    AirBnB, short term tennants less likely to wreck the joint.
     
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