The stock market is a very different animal for those of us who...

The stock market is a very different animal for those of us who still have a home loan. Essentially the tax adjusted risk free rate jumps up to over 5%, whereas for someone who doesn’t have anything else to put their money into the after tax risk free rate is more like 2%.

This needs to be considered. 5% doesn’t sound like much but some fund managers are suggesting that’s what we should expect in equities over the medium term, so is it worth the stress/trouble?

For me it’s an interest (which I’m sure it is for you both) and a learning experience but I certainly wouldn’t be drawing down on my loan to participate any further.

I’ve been looking at seek car brg and arb lately too but am yet to take the bait. I’d love rea to drop back into the 40’s which may sound big but far from impossible. I think we should be going for defensive/non discretionary related earnings (mpl/nhf/hso/maybe even the supermarkets) currently, until the quality stocks like those mentioned above start showing signs of growth dissipating and that’s when the proverbial should hit the fan and we might get a real bargain.