Forum Topics Risk in this environment
Silky84
2 years ago

a question for the trusted strawman crew. Im interested to hear peoples thoughts.

in general we are all here to try and outperform the market and some people are amazing at it. Im wondering if given interest rates are now 5-6%, does anyone alter their strategy given they can get a 5-6% risk free return in their offset versus investing in shares.

personally i now put 50% of my monthly extra money into my offset and 50% into shares. 2 years ago i was outting 90% into shares!

intrigued to know if im alone in moving towards less risk

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Solvetheriddle
2 years ago

@Silky84 i went more risk off, Nov 21, when Fed realised they had an issue, and i have commented on at various times since. short term rates dont alter my strategy very much if at all, maybe increase earnings risk for some stocks, so watch those stocks economically sensitive, but that concern occurred quite some time ago for me. now if 10Y bonds were 6% that may be completely different. 6% for 10 years is interesting, short term not so much. offset account, i havent had a mortgage for about 15 years, but when i did i had my debt against the shares and as low a mortgage balance as possible, since it is a/t dollars. took a bit of organising but was definitely worthwhile. that's my view could be wrong. good luck

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nerdag
2 years ago

@Silky84, money in offset is really an 8-12% pa risk free return depending on your MTR as a main residence mortgage is paid in post-tax dollars.

Hasn't changed my allocation, but absolutely can see why one would prioritise putting money into offset in the current environment.

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