Innholdsfortegnelse for July 2024 i Money Magazine

EDITOR’S WELCOME EDITOR’S NOTE A quarter of a century ago, a young(ish) buck named Paul Clitheroe parlayed his success with the TV show Money (three million regular viewers!) into print. Money, the magazine you now hold in your hands, was born in July 1999. This month we celebrate our silver milestone with a personal piece by Paul on his own financial and life journey. After all, for 25 years he has dispensed Paul’s Verdict – we thought it was timely to turn the spotlight on him. It’s a beautiful appraisal of a life well lived, demonstrating the importance of understanding personal finance to prosper financially, emotionally and physically. Our beloved Family Money columnist, Susan Hely, shares the hard-won money lessons she wants to have with her children (if only they listened).…

IVAN COLHOUN OUTLOOK In recent weeks, both sides of politics have proposed policy changes that, if implemented, would significantly impact immigration rates, population growth, international student numbers, housing construction and overall economic growth in coming years. At the heart of these decisions is the housing crisis. In the 2024 Federal budget, the government signalled an increase in: funding for new housing construction; rental assistance; regulation to increase student accommodation and fee-free TAFE places for those studying trades; and it anticipates an easing in net overseas migration in the next financial year. The Opposition went further, committing to cut the permanent migration intake by 25% for the next two years and to ban foreign investors and temporary residents from buying established housing for the next two years. Are these policy decisions…

As more people retire, super scams are increasing. They tend to come in three varieties. Here’s what you need to know. Phishing: Often a scammer will pretend to be from a financial services company such as a bank or super fund. They request your personal details, often through an email with a link. When you click on that link, they will be able to access your computer. They create a super account in your name with another fund, then transfer funds to this account before withdrawing the money. Open an SMSF: A scammer may have created a trusting relationship with you. They encourage you to transfer your super into a self-managed fund or bank account run by them so they can make your money ‘grow’. They then withdraw your money.…

MORE MONEY STORIES ON P42-53 Households reluctant to seek help As households continue to struggle with cost-of-living pressures, new research by ASIC’s Moneysmart reveals that nearly half (47%) of Australians with personal loans or other debts have struggled to make their repayments over the past year. ASIC also found that a majority of people aren’t aware of the support that lenders are required to provide customers who are experiencing financial hardship. For example, lenders may be able to temporarily alter a customer’s loan repayments or set up a payment plan. Even with that knowledge, 30% of Australians say they wouldn’t reach out for hardship support, citing concerns about the potential long-term cost of seeking help and impact on their credit score. “It is concerning that people would rather sell their…

Australia has typically looked to the fringes of its cities to build new homes, but as housing supply shortfalls have intensified that focus has turned towards infilling existing suburbs with higher-density properties, such as townhouses and smaller unit blocks. Could part of the solution be creating more rooftop homes by way of ‘airspace development’ on top of existing buildings? According to Warren Livesey, founder of the Association of Rooftop and Airspace Development, there are roughly 100 million square metres on top of strata and commercial buildings that could be used for dwellings – space that cities such as London, New York and Toronto have been utilising for years. “The present housing solution is to knock buildings down and rebuild bigger to create density. Airspace development is typically only one or…

PAUL CLITHEROE Q&A Need Paul's help? Send your questions to: Ask Paul, Money magazine, Level 7, 55 Clarence Street, Sydney NSW 2000 or money@moneymag.com.au. Sorry, but Paul can’t personally answer your questions other than in the Q&A column. By submitting your question to Money, you consent to having your question and the response you receive from Paul published in the print and digital edition of Money. At 32, Nick wants to retire early with an income from his investments. How to be debt free in 10 years Q I am 32 and chasing a debt-free future ASAP. My goal is to be debt free by my early 40s. I own a house worth $675,000 with $330,000 owing (this is my only debt), $116,000 in cash (mortgage offset), a $85,000 share…

Your car’s vehicle identification number, or VIN, is an important identifier. You may from time to time need to provide it to authorities, lenders or insurers. Finding a VIN is not hard – you just need to know where to look. Australia adopted the International Standards Organisation 17-character VIN more than 30 years ago. All cars sold here since that time have it. Typically, each car’s VIN is displayed in a small metal plaque that can be viewed from the outside through the windscreen at the bottom corner near the front passenger door. If the VIN cannot be found there, open the driver’s door and look at the door post (where the door latches when it is closed). It is likely that the VIN will also be displayed in this…

MICHELLE BALTAZAR BANKING After I tapped my credit card at the ticket booth at Taronga Zoo in Sydney on a recent visit, the dreaded beep-beep-beep of the machine made my heart skip a beat. Last time I checked, I was pretty sure I had funds in my account, but knowing what I know about banking scams – more than $3 billion lost through scams in 2022 – my mind went straight to the worst-case scenario: my bank account has been emptied out by some nefarious organised crime ring in Russia. Not quite. As it turned out, my bank had blocked my account after I missed its text message asking me to confirm whether it was really me – I hadn’t been to a zoo for a couple of decades –…

Cryptocurrency scams are an unfortunate reality, which is why Crypto.com’s Karl Mohan says it’s important for holders to understand the consequences involved and the basic steps they can take to avoid scams. 1 Practise good online hygiene “The first part is getting the basics right. It’s critical to never, ever share security details like your password with others or to click on links from unknown parties. And if someone contacts you directly purporting to be from an exchange or somewhere else, ignore it and reach out to the organisation directly if you have concerns.” 2 Be wary of unrealistic returns “When it comes to investments scams, it goes back to the basic premise: there’s no such thing as easy, fast returns. If someone’s promising you returns of 50%, 100%, 200%,…

If you are keen to get a pet – or add to your brood of fur kids – there are ways to enjoy their company without spending a fortune: 1 BUY A SHELTER PET Buying a purebred or ‘designer’ dog will cost you. Golden Retriever pups can cost about $3500. Purebred cats can be just as expensive. A Maine Coon kitten can set you back $4000. Buying from a shelter, such as the RSPCA or Animal Welfare League, is vastly cheaper. You could pay less than $500, which usually includes desexing, microchipping and vaccinations. But the best thing about getting your new pet from a shelter is saving their life and giving them a loving, safe home. 2 CONSIDER REGULAR MAINTENANCE COSTS As the table (right) shows, poodle crosses are popular…

ANNETTE SAMPSON WHAT IT? The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade. But as then Labor leader Bill Shorten discovered in the 2019 election, cuts to property tax concessions are electoral poison. (Labor also took the property investment changes to the 2016 election.) In 2021, Labor officially dropped the investment property changes from its policies, and it would seem unlikely they will be resurrected. THE CONCESSIONS IN SHORT The arguments centre around two key tax benefits: negative gearing and…

As you dive into this year’s Consumer Finance Awards, you’ll spot a clear trend: customers are reshaping the financial landscape. From banking apps that hide emergency savings to curb impulse spending to lightning-fast turnarounds on home loan applications, savvy customers are in a stronger position today to save time and earn more from their banking accounts. Fees are also sharper. No-frills banking comes with zero to negligible fees, while those with bells and whistles have lower fees, on average. In some cases, banks waive the charges when certain conditions are met. Besides better features and lower fees, this year’s winners also stand out for their competitive rates, from high savings rates to low home loan rates. We’d like to thank readers who participated in the Money banking preferences survey conducted…

ZACH RIAZ MANAGED FUNDS It appears global investors are waking up and suddenly realising – who is going to power the artificial intelligence (AI) demand boom? We know the software and chipmaker companies who will benefit from the AI boom, as reflected in their share prices. However, attention has, rightly, also turned to how we are going to provide the electricity to power this structural growth story given how energy-intensive AI is. The utilities sector is now catching investors’ attention and we believe it will be an important theme over the medium term. Utilities find a new life The usually uneventful and boring utilities sector is getting some attention of late because of these types of questions. So much so that even rising long-term bond yields in the US have…

Anna Broinowski Author, filmmaker and academic, Anna Broinowski’s new book, Datsun Angel, is a rollicking memoir based on her travels as a hitchhiker through outback Australia in the 1980s. Here, she talks about her life, loves, and learning. Tell us about your early years. My childhood was peripatetic. I was born in Tokyo and went to nine schools in Burma [now Myanmar], Iran, the Philippines, Canberra and Japan. I liked humanities subjects and loved theatre – I still remember being Rat 4 in a play about a pumpkin on the icy roof of my British kindergarten in Tehran, playing Eliza Doolittle in My Fair Lady in middle school in Manila, narrating Joseph’s Amazing Technicolour Dreamcoat in my rough-as-guts public high school in Canberra, and playing a mosquito in an ancient…

Association of Superannuation Funds of Australia (ASFA) 1800 812 798 (outside Sydney) 9264 9300 (Sydney) superannuation.asn.au Australian Communications and Media Authority 1300 850 115 acma.gov.au Australian Competition and Consumer Commission 1300 302 502 accc.gov.au Australian Energy Regulator aer.gov.au/consumers/making-a-complaint Australian Financial Complaints Authority 1800 931 678 afca.org.au Australian Securities and Investments Commission (ASIC) 1300 300 630 asic.gov.au Australian Securities Exchange (ASX) 131 279 asx.com.au CPA Australia 1300 737 373 (within Australia) +61 3 9606 9677 (outside Australia) cpaaustralia.com.au Do Not Call Register To reduce telemarketing calls 1300 792 958 donotcall.gov.au/contact-us/contact-details Fair Trading/Consumer Affairs ACT: 132 281 NSW: 133 220 NT: 1800 019 319 QLD: 137 468 SA: 131 882 TAS: 1300 654 499 VIC: 1300 558 181 WA: 1300 304 054 Financial Counselling Australia National Debt Helpline: 1800 007 007 financialcounsellingaustralia.org.au/contact…

CALENDAR OF EVENTS Tuesday, July 2 RBA meeting minutes Thursday, July 4 Balance of trade Thursday, July 11 Westpac consumer confidence NAB business confidence Friday, July 18 Unemployment rate Buy now, pay later users to be given greater protection Whether you want to call them innovators, disruptors or something else, there’s no doubt that buy now, pay later (BNPL) players have shaken up the payments landscape with their short-term, instalment-based finance, which particularly appeals to younger Australians. But almost 10 years on from the founding of what is without a doubt Australia’s most well-known BNPL provider, Afterpay, the industry is finally being ushered under the credit umbrella. In early June, the Federal government introduced legislation that will see BNPL services such as Afterpay, Klarna and Zip regulated as a form…

MARK CHAPMAN TAX TIP One of the success stories of the sharing economy has been Airbnb, the organisation that matches private accommodation to potential renters. But letting part of your home through Airbnb (or Stayz, or any similar platform) can deliver a nasty, and little understood, sting in the tail when it comes to tax. Broadly, if you own an investment property, you will pay capital gains tax (CGT) when you dispose of it based on the profit you make on sale. This, in simple terms, is the difference between the amount you sold it for and the amount you paid for it. With property prices having risen rapidly in recent years, it is easy to make substantial profits on sale and equally easy to forget that the tax office…

Just how rewarding are loyalty programs? It’s a question that many inquisitive consumers will have asked and, according to new research by ING, there’s an answer. After crunching the numbers, the bank found that loyalty program members had saved a collective $7.1 billion over the past 12 months. That works out at roughly $407 per member. Queenslanders were found to be saving the most from loyalty programs at $426.10 per person on average, while Victorians were saving the least at $383.43 per person. ING also found that half of existing loyalty program members were more likely to sign up to a new program as a result of higher living costs. “The cost of living and price inflation for everyday essentials are making Aussies much more savvy on how and where…

MORE INVESTING STORIES ON P84-87 Big rewards from extra income From July 1, taxpayers will begin to notice a change in their payslips as the reworked stage three tax cuts take effect. For some, that extra money will go towards bills and everyday expenses. Others may be looking to invest it. So, how much could that money generate over time? The online investment platform Sharesies crunched the numbers and found that a regular investment in the sharemarket could grow substantially (based on the average rate of return generated by the S&P/ ASX 200) over the years. “Australians who earn the average wage (about $90,000 a year) will get $160 back each month in tax cuts,” says Brendan Doggett, Australian country manager at Sharesies. “With dollar-cost averaging, this extra cash can…

Some words just go well with a morning coffee, and two of them are ‘strategic review’. Aristocrat has outlined plans for a strategic review – code for a possible sale – of its casual and mid-core gaming segments, Big Fish Games and Plarium Global. We consider these the weakest areas of the business, so we would be glad to see them off the books. Management said that while no firm decisions have been made, it intends to focus on the ‘clear opportunities’ it sees in regulated gaming content, which is where most of the business’ competitive advantages lie. This follows the $1.8 billion acquisition of NeoGames in April. Aristocrat’s Anaxi segment will be joined by the company’s Interactive segment to form a new division called Aristocrat Interactive. All three of…

Winter essentials Outdoor camera What is it: Lorex 4K indoor/outdoor spotlight wi-fi camera. It gets dark early these days, providing handy cover for all the parcel-stealing types. Stop them in their tracks with the Lorex wi-fi camera. This little beauty boasts a 4K 8MP camera with a 140-degree field of view. It also includes security features such as person, vehicle, animal and package detection. Using the Lorex app, you can also have a two-way conversation with welcome guests. Cost: $317. Officeworks.com.au Bottom warmer What is it: the Stoov Ploov infrared cushion. Let’s begin by saying not all tech is sexy tech. What the Stoov Ploov infrared cushion offers is a comfy way to get around cold-bum situations, be that in the stands at a footy match, on a camping trip…

PAUL CLITHEROE PAUL'S VERDICT As the old saying goes, better to be lucky than clever. The first piece of luck you need is in choosing your parents. Obviously, we can’t do this, but in my case, I got pretty lucky. I was born in Nottingham, in the UK, on July 7, 1955, so 7/7/55. Astrology, numerology and that sort of stuff are not my thing, but these seem like pretty good numbers. Far more importantly, my mum and dad were well-educated people, Mum a nursing sister and Dad a doctor. My early life in England was very enjoyable. We lived near Nottingham in the little village of Huthwaite. I had cousins nearby, and one set of grandparents lived close to us in a pretty big country home, so lots to…

ANTHONY O'BRIEN SMALL BUSINESS When was the last time you paid for a purchase with cash? Chances are that it was a while ago. According to the Reserve Bank’s (RBA) most recent data, in 2022 cash was used for just 13% of consumer payments, down from 27% in 2019. As the graph shows, every sector has experienced a downturn in the use of cash. Covid may have hastened the decline, but cash was starting to fall off a cliff long before the pandemic. Amanda Rose, chief executive of advocacy platform Entrepreneurial & Small Business Women, believes the decline in the use of cash is seeing small businesses hit with high merchant fees and the risk of losing business when payment systems are down. “This premature pull towards a cashless society…

SUSAN HELY FAMILY MONEY My kids switch off when I bring up topics such as superannuation, insurance, spending and saving. I have to choose a time when they are receptive to a dose of parental wisdom, otherwise they claim to be too busy to chat. They are working full-time: exhausted and snowed under. But I don’t want my kids making the same mistakes I made, some of which have been shockers, particularly when I was young and didn’t take much notice of what my parents told me. So here are eight important financial conversations to have with your children: 1 Be aware of your consumption I spent a lot of money on clothes and shoes in my early adult years and I dined out at the drop of a hat. I…

PAM WALKLEY REAL ESTATE Australian house prices are among the highest in the world, making it increasingly difficult for aspiring first home buyers to get into the market. This robs many people of the benefits of home ownership. It can also impact your ability to build wealth because one of the most common ways to do this in Australia is to buy a family home and pay it off. The security of owning your own home is a big plus when you retire. So if you’ve found yourself locked out of home ownership because of affordability or the inability to save for the substantial deposit required, there are a number of strategies you can employ to tap into the wealth-building benefits of property. Here are three to consider: 1 Rentvest This…

Munro Climate Change Leaders Fund The fund is focused on creating a portfolio of climate winners that help enable the decarbonisation of the planet – those companies that are best positioned to champion and win from this structural change. The investment return objective of the fund is to maximise long-term capital appreciation, by investing primarily in a concentrated long-only portfolio of companies focused on decarbonisation and climate change located anywhere in the world. T Rowe Price Global Equity Fund The strategy aims to deliver long-term capital growth by investing primarily in a portfolio of companies that are traded, listed or due to be listed on recognised exchanges and/or markets globally. We believe the fund’s approach to global equities (core, quality growth) is likely to yield solid absolute and relative performance…

SCOTT PHILLIPS BEST IN BREED In what has been something of an uncertain year for investors so far, sooner or later attention tends to turn to so-called ‘safe haven’ investments. For some, that means going to cash, gold or something that’s not exposed to the vicissitudes of a moody stockmarket. And fair enough, but the return on cash, particularly after inflation, isn’t flash, and commodity price movements are anything but predictable. For those who want to remain invested in the stockmarket, then, healthcare companies come into focus as potentially less volatile stocks that generally are less exposed to economic conditions. After all, while health outcomes can be slightly related to economic circumstances for individuals – they tend to be worse when the economy drops, suggesting a small amount of potential…

PHIL SLADE Contributor Chat GPT-4o’s new voice assistant. Where other companies like Google have been super careful not to make their AI bots sound human, Open AI has gone completely the other way, making GPT-4o flirt and sound emotional and completely likeable. Scary, but also massively impressive. Harks back to the movie Her, a sci-fi cautionary tale about the pitfalls of an AI that people will fall in love with. This is not sci-fi; it’s just been released. Read Phil’s column on crypto’s emotional ride on page 48. GEORGIA MADDEN Contributor In an effort to track my spending – in particular those little daily amounts that decimate my bank balance by the end of every month – I downloaded the Crunchr app. Designed as a receipt-tracking tool, it also lets…

The latest findings from TPG Telecom Foundation’s Philanthropy Pulse Survey paint a challenging picture for charities. Amid rising living costs, 39% of Australians have cut back on charitable donations to manage household bills. Alarmingly, donation cuts come before people cut back on coffee and the gym. This trend puts significant pressure on charities, which are already struggling during the cost-ofliving crisis. Families facing disadvantage are often the first to feel the pinch and they need help more than ever. Infoxchange, one of the TPG Telecom Foundation’s charity partners, runs the Ask Izzy digital platform, a vital service connecting people with housing, meals and financial support. It expects the demand for assistance to continue growing. What is also clear from the foundation’s research is that Australians love coffee, with 75% of…

BOOK OF THE MONTH PROPERTY INVESTING ROADMAP by Damian Collins (Damian Collins, $32.95) When it comes to this nation’s favourite investment – property – one of Australia’s most respected experts, Damian Collins, is best placed to explain how to reap the rewards. He guides readers through property-related choices, from how to buy your first rental property to strategies such as leveraging equity, property development and diversifying a portfolio through commercial property. As the former president of the Real Estate Institute of Western Australia and a director of the Real Estate Institute of Australia, Collins has plenty of sound advice to offer. Ten readers can win a copy. In 25 words or less, share a tip that has helped you get into the property market. Enter online at moneymag.com.au/win or send…

$690K The super balance need a couple at age 67 to fu comfortable retireme Source: ASFA The amount of money needed to fund retirement has edged up again, according to the latest figures from the Association of Superannuation Funds of Australia (ASFA). Over the first three months of the year, ASFA’s ‘comfortable’ retirement standard rose 0.7% to $72,663 a year for couples and $51,630pa for singles. The figure takes into account the kind of budget that retirees who are around 65 and own their home would need to fund essential expenses, as well as private health insurance, leisure activities and some international and domestic travel. The money needed to fund a more modest retirement also rose over the quarter to $51,630 a year for couples and $32,915pa for singles. Higher costs…

These three outstanding Australian reds will be at their best and ready to enjoy just in time to celebrate Money magazine’s 50th birthday. These wineries in the Yarra, Hunter Valley and Margaret River were each planted just over 50 years ago and have long been regarded as among Australia’s finest. Each wine is sourced from the finest plot in the vineyard and is always in short supply. Experience has shown that these wines can be cellared with confidence for 25 years or more. 2022 Yarra Yering ‘Carrodus’ Cabernet Sauvignon $275 Regularly one of the Yarra Valley’s greatest and most ageworthy reds, with winemaker Sarah Crowe at the height of her powers. This has vibrant raspberry and mulberry aromatics that are intense and immaculately balanced. There is great depth of flavour…

The Ethics Centre is an important charity that is largely funded by donations and bequests. Its objective is to relieve the significant distress associated with making decisions. Its tagline is: Human Choice is the Most Powerful Force in the World. The charity offers Ethi-call, a free one-hour phone call that aims to help callers find clarity when facing a difficult decision. It is an impartial and confidential service whereby a counsellor takes the caller through a decision-making framework to help them when faced with a dilemma. The types of issues it covers range from birth, parenting and family issues, work, conflicts of interest, trust, privacy, negligence and fraud as well as addiction, end of life, duty of care and more. Here's an example Peter has been informed in confidence by…

It’s hard to think of a topic in the financial world that has sparked as much discussion, debate and controversy over the past decade as cryptocurrency. And no wonder. For many, their first introduction to cryptocurrency, and Bitcoin in particular, will have come in the early 2010s through headlines about its use in funding illicit purchases made on underground marketplaces such as Silk Road. Others may have watched the wild run-ups in 2018 or 2020 when investors jumped on the crypto bandwagon, only to see the value of their investments nosedive. And some will have read about the numerous scams and scandals that have plagued the sector in recent years. It’s fair to say, then, that there are plenty of people who view cryptocurrency with a healthy dose of scepticism.…

As with many emerging technologies and industries, cryptocurrency has had its fair share of controversy. More than its fair share, some would argue. The list is vast, but it includes everything from exchange collapses and ponzi schemes to crypto-related scams. In 2014, the Japanese-based Bitcoin exchange Mt. Gox, which was the world’s largest exchange at the time, abruptly suspended trading and filed for bankruptcy. It announced that it had lost about 750,000 of its customers’ Bitcoins, alleging that some had been stolen. Ten years later, many customers are still waiting for payments to be made by the Mt. Gox trustee. Perhaps most well-known is the collapse at the end of 2022 of cryptocurrency exchange FTX, which was the world’s third largest exchange at that point. Hundreds of thousands of users,…

It’s been a long wait, but Sydneysider Ayushma Rana, 28, has finally realised her dream of owning a pooch. “I’ve wanted a dog for so long,” says Rana. “But I waited until I was able to buy an apartment of my own. It’s just too hard when you’re renting.” Having researched breeds that would match her needs, Rana picked up ‘Momo’, her chihuahua puppy, in February this year. Already, the costs have passed the $1000 mark including $800 for the puppy, three sets of vaccines at $170 each, assorted puppy gear including a crate, wardrobe of doggie clothes, various beds/ leads and collars and, of course, food. Although a 900g chihuahua doesn’t eat a great deal. Momo is also a graduate of puppy school, which came with an enrolment fee…

PHIL SLADE MIND GAMES The Hollywood portrayal of romantic love is a potent mix of excitement, hope, fear, and delight. The thrill of the chase, the possibility of rejection and loss, and the validation felt when mutual-connection sparks fly – it’s a rollercoaster of emotions that we are all drawn to and want to experience. Interestingly, the emotions we feel with romantic love are not too dissimilar to those seen in crypto enthusiasts. This begs the question – are people ‘in love’ with crypto, and does the blindness we see in the heat of relationships also manifest in crypto traders? Is crypto love blind? The truth is, yes, the emotional states of fear, hope, delight, and excitement all play pivotal roles in influencing the judgement and decision-making of people in…

BANK OF THE YEAR The winner had the highest overall composite rating scores across product and features, customer service and digital experience. Only national full-service banks were eligible to win this premier award. WINNER: MACQUARIE BANK CUSTOMER-OWNED INSTITUTION OF THE YEAR Similar to Bank of the Year but only full-service customer-owned banks were eligible to win this premier award. WINNER: BANK AUSTRALIA BUSINESS BANK OF THE YEAR There’s more to being a leading business bank than just offering a good deal on business accounts and loans. This is why this year Rainmaker’s methodology identified the leading national full-service business banks that offered the most comprehensive services across business accounts, loans, credit cards, term deposits, currency management, cyber risk and fraud protection, point-of-sale and ecommerce, international transactions and merchant support. WINNER:…

VITA PALESTRANT SUPER One of super’s most overlooked products is its default life insurance. It provides you and your dependants with financial protection in the event of death or disability. Yet many people neglect to get to grips with it. While super fund performance is constantly in the spotlight, life cover rarely rates a mention. Many fund members remain ignorant of how it works and what’s involved in the event of a claim. Worse still, some members don’t even know they have it. When you join a super fund, you are automatically given default life cover. It comes without health checks and is provided at cheaper rates than you would otherwise get. This is because super funds negotiate group insurance at wholesale rates on your behalf. Premiums are usually based…

MARCUS PADLEY THIS MONTH We all have a lot of trouble buying stocks that have gone up a lot and selling those that have gone down a lot. If that’s you, then I regret to inform you that you are being affected by a well-established financial concept that only affects soft-brained investors. It is called ‘anchoring’. Anchoring, also known as a ‘focusing bias’, is the use of a reference point against which to judge value. The issue arises every day in a broking office. It’s when someone says, “I can’t buy that because the share price is up XYZ%” or “You can’t sell that because the price is down XYZ%”. An even more soft-brained variation on the theme is when you find yourself saying, “It’s down XYZ% so it’s cheap”…

In this series, we’re looking for the Best in Breed: the company that beats the others on quality. The hospitals are dominant, but they’re very capital intensive and tend to have limited growth potential. The diagnostic companies will likely continue to grow as medical science improves and there are more tests for more conditions; but the market is pretty saturated and none has particularly impressive international growth potential. And that takes us back to the big three: CSL, Cochlear and ResMed. The former has a storied history; the latter a growing market as rising affluence leads to increasing rates of obesity and sleep apnoea. But hearing-implant maker Cochlear offers a wonderful brand, strong reputation, market-leading research and development, a growing market and a lifetime of loyalty. Add the benefit of…