Free Australian Tax Gifts

Slack Investor was taught to appreciate gifts and … who doesn’t get a little bit excited when they encounter free stuff. Australia offers many lifestyle advantages to those who live here. The Australian Government also offers a few financial tax gifts … for free!

Capital Gains Tax

A capital gains tax is usually applied to the profit made from selling an asset (usually property or shares). The tax can be seen as a reasonable part of the Australian income tax system (personal earnings + business earnings + capital gains). The tax is applied in the tax year of the capital gain at your marginal tax rate – although there is a 50% concession for assets held more than 12 months.

Your own home – A ‘Partial Tax’ Gift

Slack Investor is across the difficulty of owning your own home these days – yet, it is one of the major financial goals to achieve before retirement.

There is no tax for any capital gains on your principle residence in Australia. As those lucky enough to be in the property market, tend to change houses every 11.3 years (9.6 years for units), there are opportunities to passively increase your property stake without incurring any Commonwealth taxes.

However, the cash strapped state governments have got their hands on this free gift by applying Stamp Duty (Tax) to property purchases. These stamp duties can be substantial, For a $700K dwelling , a non first home buyer will pay around $25K (NSW, Vic, Qld, Tas), and over $30K in some states/territories (SA, NT).

Your Super after 60 – A ‘Solid Gold’ Tax Gift (for now)!

For most people, an income stream from superannuation will be tax-free from age 60 – _{MoneySmart.gov.au}

Contributions and the earnings of your super fund are usually taxed, though this may be at a concessional rate. While saving your superannuation, it sits in an Accumulation account. When you retire, you can transfer some (or all) of that money into Retirement phase – an Account-based Pension. For FY 2025, the ATO have set a transfer balance cap (TBC) (limit) of $1 900 000 that can be transferred into retirement phase and remain tax free.

Up to the TBC limit – all earnings (Dividends, Distributions, Capital Gains) from your retirement phase Account-based pension are not taxable – This is a great gift to retirees!

Using the Super Balance Detective calculator from Superguru, you can see exactly how your super balance is tracking. ABC News have an excellent article How does my super compare to others? where references are made to the ASFA ‘comfortable retirement’ standard. All of these sources were used to make the following chart to measure how your current super balance measures up for retirement.

The Red line was generated as a track towards a $1.9m super balance at retirement. Although the red line super numbers are, admittedly, ‘heroic’. Readers of Slack Investor would always like to aim high for an independent retirement – and try to get at least towards the $1.9m in super at retirement that will maximize this tax-free gift.

A chart to see if you are on track for a ‘Comfortable’ Retirement (Yellow Line), or on a path for maximum allowable tax-free income (Red Line). The Red Line was calculated using an earnings figure of 6% p.a. The Green and Blue Lines are the average amounts of super that Men and Women have (ATO Figures 2021) – Click image to enlarge.

Thanks to compulsory super, people with a solid employment history will be on track to have a super balance for a ‘Comfortable’ retirement (Yellow Line). This comfortable retirement definition assumes that you own your own home and have access to the full (or part) aged pension.

Using the 4% rule, a $1.9m super balance at retirement will generate a $76 000 tax free income each year. This would be a ‘Very Comfortable’ retirement – but there may be a few changes in the wind.

But Wait … Division 296

This all sounds too good to be true … You’re right! The legislators are coming after this gift.

The Australian government is considering a very muddled legislation known as Division 296 – which aims to target large superannuation balances. They reference Total Superannuation Balance (TSB) for this proposal. The sum of any accumulation accounts plus any pension accounts. The legislation is currently held up in the senate.

Division 296 tax is imposed at a rate of 15 per cent on a percentage of earnings equal to the percentage of superannuation balances that exceed $3 million – _{treasury.gov.au}

The concept behind this is very reasonable. Slack Investor doesn’t object to the idea of tax on large super balances. Super should ultimately be all about funding your own retirement – and not be used as a tool to preserve wealth for your estate.

However, in a sensible world, some amendments to the current form of the bill should be made. They include:

The $3 million threshold for the application of Division 296 needs to be indexed
In its current form, Division 296 unusually proposes taxation on unrealised gains – rather than being based on the actual taxable income. This is a first for the Australian tax system – it does not make sense and needs to be rectified.

No Guru, No Method, No Teacher – and August 2024 – End of Month Update

Van Morrison’s 1986 album No Guru, No Method, No Teacher – One of his best. Try a meditative sample – In the Garden

Van Morrison is said to have echoed the thoughts of Jiddu Krishnamurti when naming this great album back in 1986 – after 38 years, it still stands up!

“…there is no teacher, no pupil; there is no leader; there is no guru; there is no Master, no Saviour. You yourself are the teacher and the pupil; you are the Master; you are the guru; you are the leader; you are everything.” – Jiddu Krishnamurti, Indian Philosopher (1895 – 1986)

At the time, Van was influenced by his teachings and, in an Eighties interview, Van said “I feel the meaning of Krishnamurti for our time is that one has to think for oneself” . This is just the way that Slack Investor feels about the whole world of finance – and one of the defining reasons for this blog.

The ultimate aim for Slack Investor readers is to fund your own retirement, but for most Australians, there is still work to do. The latest available ATO statistics (FY2021) indicate that the median superannuation balances for ages 65-69 are $213,986 (Male) and $201,233 (Female).

According to the Association of Superannuation Funds of Australia (ASFA) estimates – the minimum Superannuation balances required to achieve a comfortable retirement are set out below – and these figures rely on a couple of big assumptions. You need to own your own home and have access to the aged pension, or part-pension, to make this sum work.

Couple	Single
$690,000	$595,000

ASFA Minimum superannuation required for a comfortable retirement (Assumptions: Own Home and Aged pension assistance)

To retire independently (i.e. no government aged pension), a greater lump sum would be required! Things are slowly getting better with recent increases in compulsory superannuation. By 2050, the expected percentage of “comfortable retirees” should be 50%. This is outlook shows promise – but there is a need for more Australians to take action for themselves – Right Now!

Currently, (only) around 30 per cent of couples and singles reach or exceed the ASFA Comfortable Standard (in retirement savings) – ASFA Update – November 2023

No Guru

Slack Investor is no guru, the steps to financial independence are no secret – and are set out by many well known financial educators. There are so many great resources, for example: Rask, Aussie Firebug, Equity Mates, Making Money Made Simple, Strong Money Australia. For a step by step guide, nobody does it better than The Barefoot Investor. Buy his book, or try the The Barefoot Steps or, read Rask Media – The Journey to Financial Independence.

Slack Investor would add to this wonderful guidance:

Educate Yourself in the ways of finance – The internet and financial independence books are your friend here. No-one will represent your interests better than you
Take charge of your Own Financial Independence – Ride Your Own Bike
Automate your savings – Into superannuation and your own investments – What you don’t see, you wont spend
Your Savings Rate is a very important number – my savings rate while working and raising a family fluctuated between 20% and 45%. Far more heroic rates are documented by F.I.R.E. enthusiasts e.g. Strong Money Australia – this will accelerate your journey
Have a plan to buy your own place to live
Pay full attention to fees for financial services
Let time be your partner in long-term investing – start as early as you can.

The Slack Investor path was more of a climb up a cobbled street than a path. It involved lots of different strategies. Trying to maximise my superannuation contributions, buying a house to live in, using home equity to gear into individual stocks and ETF’s. In the last 10 years, I have been trying to invest mostly in growth stocks, without too much trading. This has been a good fit for my temperament.

Long term Investing

The real business is to be invested at least somewhere in appreciating assets – and let time do its work. Below is an extract from the Vanguard 2024 long-term investing chart. The numbers on the right are the results of investing $10,000 in the Index funds of the indicated asset classes for 30 years. It is Slack Investors favourite chart.

Extract from the 2024 Vanguard Index chart (Just the 2007-2024 portion is shown) – the dollar values on the right are the results of investing $10,000 in index funds in each asset class for 30 years (since July 1994). *– Check out the full 30-year glory of the* Vanguard 2024.PDF chart *– Click image for better resolution of this portion.*

August 2024 – End of Month Update

Slack Investor is IN for Australian index shares, the US Index S&P 500 and the FTSE 100.

The S&P 500 (+2.3) continues its enthusiastic progress. Slack Investor is pleased to go with the flow but remains nervous for the US markets.

For the ASX 200 (+0.0%) and the FTSE 100 (0.1%) – things have ended up dead flat. Although, all markets have shown a lot of variation this month.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

Financial Year 2024 Full Slack Results

“… nearly all the grandest discoveries of science have been but the rewards of accurate measurement and patient long-continued labour in the minute sifting of numerical results.”
Lord Kelvin (a.k.a. William Thompson) – Eminent 19th Century Scientist

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Like Lord Kelvin, Slack Investor likes to measure things. FY 2024 was another good year for share owners. In the world markets, the FTSE 100 Total Return Index was up 11.4% (last FY up 7.8%). Dividends helped the Australian Accumulation Index to be up 12.2% for the financial year (last FY +10.6%). The S&P 500 Total Return Index is again the top performer – and was up 24.2% (last FY +19.7%) for the same period. All of these Total Return Indices include any accumulated dividends.

Slack Investor has stuck to his strategy of investing with growing companies that have an established earnings record and forward P/E ratios <50 (Mostly!). I expect a bit of volatility in my (mostly “growth”) investment portfolio and I am reassured that, despite the odd negative year in the Slack Investment Portfolio , the dividends and the Stable Income portfolio are doing what they should and keeping Slack Investor with enough cash to “keep the wheels on” the Slack lifestyle.

Slack Portfolio Results FY 2024

All Performance results are before tax. The Slack Portfolio is Slack Investor’s investment portfolio and, due to some lucky stock selections (e.g. ALU and PME both doubled in value FY2024), this was my “best ever” year. I’m glad to report an annual FY 2024 performance of +39.4%. Full yearly results with Australian benchmarks are shown in the table below. However, the portfolio performance in the first 6 weeks of this new FY has brought me back to Earth. Slack Investor realises that only long term results really count.

For property values, Slack Investor is using the Total Return values supplied by CoreLogic. The Total Return is calculated from value change as well as the gross rental yield. I would have preferred calculations that include the net rental yield, but this will have to do. The Total Return is a more realistic figure when comparing real estate returns to stock market total returns, as it treats both asset classes as investments with income coming from rent/dividends.

Although it is hard to match US market growth this year (+24.2%). The Australian Share market Total Return Index (ASX200 Acc) was up 12.2%. The Vanguard Diversified Growth ETF (VDGR), comprising International shares (42%) and Australian Shares (28%), increasing by 11.4%. Inflation is again above Reserve Bank target – with the CPI at +3.8%. The readily available Cash rate of 4.0% has edged above inflation for the first time in 4 years. Cash is important but not a way to grow your investments.

Yearly Performance (%) results since 2010

The Slack Fund yearly Internal Rate of Return (IRR) vs BENCHMARKS. The Median Balanced Fund (41-60% Growth Assets), Vanguard Growth Fund, ASX 200 Accumulation Index, Corelogic Residential Property Home Value (Total Return) Index in both Brisbane and Melbourne, and Cash (Australian Super Cash Fund) and Consumer Price Index (CPI)

5-yr Average Annual Performance

Although I collect yearly figures, the 5 and 10-year compound annual performance gives me a much better idea about how things are really going. Long term results will smooth out any dud (or remarkable!) yearly figures. The Slack Fund is still ahead of most Benchmarks – but running “neck and neck” with Brisbane Residential real estate over a five-year period.

Slack Investor 5-year compound annual rate of return – compared to benchmarks – **Click for better resolution.**

Growth of a $10000 Investment Since 2009

The beauty of compounding with a succession of good performance results can be seen in the chart below showing the growth of an initial investment in June 2009 of $10000.

The rate of growth of $10000 invested by *Slack Investor in FY 2009 – compared to benchmarks – Click for better resolution.*

Slack Fund has exceeded my expectations. Also, the chart shows that investing in either shares or residential property has been a solid way of growing your money over the long term.

10-year compound annual rate of return

The Slack Fund has been around a while and, I am generating some good long term data (10-year compound “rolling” annual rate of return). Over this time frame, the Slack Fund has been performing very well. A 10-year annual rate of return of over 15% – Go Slack Fund! The 10-yr data is shown below in chart and table form.

It is useful to note that, the 10-yr rates of return of the Median Balanced Fund, Vanguard Growth fund, ASX200, and residential property in Brisbane and Melbourne are also great long term investments. These appreciating assets generate a 10-year compound annual rate of return of 6-9% p.a.

From the figures below, although Cash can add stability to a portfolio, Cash as a long term investment, is a poor choice.

The Slack Fund **average 10-yr compound yearly return** vs BENCHMARKS. The Median Balanced Fund (41-60% Growth Assets), Vanguard Growth Fund, ASX 200 Accumulation Index, Corelogic Residential Property Home Value (Total Return) Index in both Brisbane and Melbourne, and Cash (Australian Super Cash Fund) and Consumer Price Index (CPI)

YEAR	SLACK FUND	MEDIAN BAL	VGARD GROWTH	ASX200Acc	RES BRIS	RES MELB	CASH
2019	15.6	8.0	n/a	10.0	5.8	8.5	2.9
2020	15.9	7.0	n/a	7.8	5.5	7.3	2.6
2021	17.9	7.4	n/a	9.3	7.5	8.3	2.2
2022	15.2	7.1	8.1	9.3	9.9	8.7	1.8
2023	14.4	6.4	7.4	8.2	8.6	7.6	1.7
2024	15.7	5.8	7.2	7.7	9.0	6.4	1.8

The Slack Fund average 10-yr compound yearly return vs BENCHMARKS in table form.

FY2024 Nuggets and Stinkers and … July 2024 – End of Month Update

“I think it’s fair to say you can’t predict a straight line to victory. You know, there’ll be good days and bad days along the way.”
Dick Cheney, Vice President to George W. Bush from 2001 to 2009

Dick Cheney had a controversial career, one of his infamous bad days was when he accidentally shot a companion in the head on a quail hunting expedition. Slack Investor is delighted to report that, this year, he didn’t shoot anyone! In fact, FY 2024 was filled with good days to abundance.

The percentage yearly returns quoted in this post include costs (brokerage) but, the returns are before tax. This raw figure can then be compared with other investment returns. I use the incredibly useful Market Screener to analyze the financial data from each company and extract the predicted 2o26 Price/Earnings (PE) Ratio and Return on Equity (ROE). This excellent site allows free access (up to a daily limit) to their analyst’s data, on the financials tab for each stock, once you register with an email address.

Slack Investor Stinkers – FY 2024

Financial year 2024 was generally a “boomer”. All of Slack Investors followed markets (Australia, the UK and the US) have had a pretty solid year … especially the US! However, Slack Investor knows that stinkers are a part of the game, even in good years – and managed to attach himself to a few stinkers along the way.

Global X Battery Tech & Lithium ETF (ACDC) -15%

(ACDC –2024: PE 11, Yield 3.0%) I have owned this ETF for 3 years now – and I think I might have fallen for the “Theme Dream”. Despite some early promise in the “sexy” sector of electric cars and lithium batteries, this ETF has started to disappoint. There has been a string of bad news in the electric vehicle sector with an oversupply of vehicles. Both the EU and the US have slapped large tariffs on the Chinese EV exports – this has further slowed demand. Slack Investor is just holding on and has set a stop loss at $82. Current price is about $83, so I am very close to selling – and moving on.

Coles Group (COL) -8% (Mostly sold Nov 2023)

(COL – Forecast 2026: PE 19, ROE 32%) Coles is where I often buy my groceries and I like the idea that you can regularly inspect your holdings. However, Coles Group are profitable but not really growing. This company does not really belong in my investments pile, so I mostly sold this holding. I might buy some for my stable income pile if there is a future weakness in price.

Computershare (CPU) -5% (Sold April 2024)

(CPU– Forecast 2026: PE 16, ROE 36%) Computershare was a stinker last FY for Slack investor. In retrospect, I can’t believe I bought in again for further punishment. I keep falling for the high ROE (36%) and relatively low PE (16) for a tech stock. Might have been a little early here in folding again – the share price has risen about 12% overall in FY2024.

Slack Investor Nuggets – FY 2024

Nuggets were everywhere this Financial Year. Slack Investor continues to invest in high Return on Equity (ROE) companies with a track record of increasing earnings. Companies with these qualities sometimes behave as “golden nuggets”.

Pro Medicus (PME) +118%

(PME – Forecast 2026: PE 76, ROE 46%) Pro Medicus is a developer and supplier of healthcare imaging software and services to hospitals and diagnostic imaging groups. In 2019, Slack Investor met the CEO and co-founder of Pro Medicus, Dr Sam Hupert. I was impressed by his humility and passion for his great products. I’m obviously glad I bought in – but naturally wish I’d bought more! The very high predicted PE ratio (+76) is worrying but, in the past, product sales have just kept growing above expectations as PME expands into the US.

Altium (ALU) +106% (Sold pending takeover)

(ALU – Forecast 2026: PE 32, ROE 33%) Altium is an Australian based developer and seller of computer software for the design of electronic products worldwide. My ode to this great company expands on why I originally bought it and its great management team. Good luck with the new Japanese owners Renesas. For current holders, I think the cash payment per share is due today (1 August, 2024)

Goodman Group (GMG) +75%

(GMG – Forecast 2026: PE 23, ROE 12%) Goodman Group owns, develops, and manages (mostly industrial) properties all over the world. On a weekly bike ride, I go past a succession of Goodman warehouse properties – and they always seem to be thriving with activity. They even develop data centres that will hopefully be full of machines to manage the AI trend. Glad to be an owner.

Codan (CDA) +54%

(CDA – Forecast 2026: PE 20, ROE 21%) Codan is a technology company that specializes in communications and metal detecting. It is one of Slack investors core holdings that has taken him on what can only be described as a “journey”. A nugget in FY 2021 (+161%), a stinker in FY2022 (-58%) – and now back to a nugget (+54%). What has kept me in the stock was the low debt (generally) increasing earnings, and the high profitability (ROE 21%).

Supply Network (SNL) +54%

(SNL – Forecast 2026: PE 18, ROE 36%) Supply Network are a bus and truck parts distribution company using the Multispares brand. Although there are competitors in the big-vehicle parts business, what sets SNL apart from the rest is their great management and strict adherence to processes and efficiency. They have consistently held a profitability advantage over their rivals. They have maintained a high Return on Equity (ROE) of 36% even as the company has expanded and grown in price.

Alphabet (GOOGL:NASDAQ) +52%

(GOOGL– Forecast 2026: PE 17, ROE 25%) For more good things on this company that is everywhere. High profitability (ROE 25%) and the predicted 2026 PE of 17 makes this still a good buy at current prices – in Slack Investor’s head.

CAR Group (CAR) +52%

(CAR – Forecast 2026: PE 31, ROE 14%) Car Group is a collection of digital marketing vehicle businesses that are now in Australia, Brazil, Canada, Chile, China, Malaysia, New Zealand, South Korea, Thailand and the United States. The Australian business is still carsales.com. The ROE is slipping below 15%, but happy to hold on for now.

REA Group (REA) +39%

(REA – Forecast 2026: PE 41, ROE 32%) Like Carsales.com, REA has dominated the space left by the old newspaper classifieds in selling real estate in Australia and has continued to expand overseas. A high PE ratio (41) but while projected Return on Equity (ROE) remains high (32%), this is OK.

Wesfarmers (WES) +39%

(WES – Forecast 2026: PE 27, ROE 33%) Wesfarmers is Australia’s largest conglomerate. Great retail outfit (e.g. Bunnings) and chemical manufacturer. High profitability (ROE 33%) but like Coles, seems low on earnings growth lately.

Some honourable mentions to some top results this year that didn’t make the nuggets. BetaShares NASDAQ 100 ETF (NDQ) +32%; BetaShares Global Quality Leaders ETF) +27%; BetaShares Global Cybersecurity ETF (HACK) +26%; Dicker Data Limited (DDR.AX) +26%. A special mention also to a recent buy, Telix Pharmaceuticals (TLX) +23% in two months!

Slack Investor Total SMSF investments performance – FY 2024 July 2024 end of Month Update

Slack investor has just two piles of funds for his retirement – the Stable Income pile (Cash and Conservative) and an Investments pile. The Stable income represents just 25% of total retirement funds. I used to rebalance each of my piles after every year, but the stable pile now has enough in it that, together with dividends from my investments, could supply me with enough living expenses to last out an extended (3-yr) bad run of the stock markets – without having to sell stocks. The stable pile produces a moderate return of about 5%. The Investments pile is much more fun and the figures below represent (before tax) performance of my investments pile only.

After a difficult 2022, a solid 2023, some very good fortune was had with a ripper FY2024. Some fortuitous selections with growth stocks have really paid off (Thank you PME and ALU). In the Australian superannuation scene, the median growth fund (61 to 80% in growth assets) returned +9.1% in FY 2024. The ASX 200 chart shows a gradual climb after a shaky start for the financial year.

A record result for Slack Investor in his growth investments portfolio. His preliminary total SMSF performance looks like coming in at around +39% for the financial year. Including the relatively low returns from my stable income pile (~5%) – overall, my retirement funds grew about 30%. A very good year!

For Slack Investor, the 5-yr performance is a more useful way of measuring – as it takes out the fluctuations of yearly returns. At the end of FY 2024, the Slack Portfolio has a compounding 5-yr annual return of around 13%.

July 2024 – end of Month Update

The new financial year has started off positively for Slack Investor markets. The ASX 200 + 4.2%; FTSE 100 +2.5%; and S&P 500 +1.1%. He remains IN for all index positions.

I have taken the opportunity to adjust upwards the stop losses on all followed index markets. The prices have crept up to more than 15% above their old stop losses. See Index pages for details.

All Index pages (ASX Index, UK Index, US Index) and charts have been updated to reflect the monthly changes.

Slack Investor Report Card Part 2 … and Financial Year 2024

This continues the series of judgement – on a few calls by Slack Investor in recent blogs. The good and the bad are presented – to illustrate that you don’t have to get everything right to be a successful investor.

15/01/2023 & 15/05/2023 –Nuns Know Best & Alignment

I tried to make the case that the ASX 200 was both undervalued and showing signs of momentum in the charts. At the the publishing dates, the ASX 200 was trading at 7328 and 7267. At 30/06/24, it is 7767, up 5.9 % and 6.8%. In the meantime, the US S&P 500, which Slack Investor thought was overvalued at the time, is up 32% for the same period. Could do better, Slack Investor – 5/10

01/07/2023 – Advice for a young man

I went through a whittling down process for a few stocks that might be suitable for my nephew who was just starting out on his investing journey. I wanted to gather a basket of well known, growing companies that were not outrageously over priced- I generally don’t like the predicted P/E Ratio to get above 40 when I’m buying, as this indicates the current price of the company is 40 times its predicted earnings (expensive) . The yield (dividend) is not that important to a young investor, it is the total growth that counts.

Looking at the figures, even Slack Investor is surprised with the success of his suggestions after only 12 months – an average 1-yr growth of +34.2%.

Again, Coles Group (COL) is the only dud. Despite COL having a high Return on Equity (ROE), I should have considered the competitive retail environment, its lack of history of growth and how it was spending most of its profits – returning to shareholders as dividends, rather than growing the business.

I hope that my nephew took this advice and is now a convert to stocks as a way to make your money grow. A top effort Slack Investor 9/10; Nephew ?/10

15/09/2023 – Buying Shares the Slack Way

I went through the Slack investor buying process and I had to narrow things down to the one new share that I would buy at the time with a limited amount of funds. I selected Computershare (CPU). In hindsight, I should have trusted my gut here – I have never liked their confusing website! At the the publishing date, CPU was trading at $25.85. At 30/06/24, it is $26.34, up 1.8%. I had sold out of this stock, at a loss, 5 months after I bought it as I didn’t like the way that the chart was heading. A dud trade Slack Investor – 1/10

15/10/2023 – Alphabet … Google It

Slack Investor went a bit in depth here as to why Alphabet (NASDAQ : GOOGL) was such a major portion of his portfolio. At the the publishing date, GOOGL was trading at $137.36 USD. At 30/06/24, it is $182.15 USD, up 35%, A good trade Slack Investor, is this all your own work? – 9/10.

15/05/2024 – Slack Investor vs Centrelink

I am delighted to report that Centrelink have sent me a Commonwealth Seniors’ Health Card (CSHC). I have yet to make use of it … but I am excited that my perseverance with the forms (with the help of very generous new annual income limit rules) has paid off. You really tried hard here Slack Investor 8/10; Centrelink 3/10 – The application process is confusing and tedious. The turn around time for the application was about 2 months – but, I don’t blame the workers at Centrelink here – there has been chronic underfunding in staff and processes for years.

Financial Year 2024

A quick review of how the Slack followed markets fared in FY 2024 – pretty well I might say!

ASX 200

After a solid 2023, FY 2024 could be described as a slow start – but big finish. In raw figures the Australian Index rose 7.8 %. When accumulated dividends are re-invested, the ASX 200 Net Total Return, the yearly returns are more impressive, up 12.2%.

FTSE 100

This bad boy has shown great improvement. The UK Index rose 8.4 %. When accumulated dividends are re-invested, the FTSE 100 Total Return was up 11.4%.

S&P 500

That crazy country, the mighty US of A, has done it again. the US Index rose 22.7 %. When accumulated dividends are re-invested, the S&P 500 Total Return was up a mighty 24.2%.

Slack Investor Report Card Part 1 … and June 2024 – End of Month Update

Slack Investor does not provide specific advice, but occasionally he will expand on the way he invests and report on the things that he is looking at. I will sometimes mention actual stocks or financial products that I am interested in.

I don’t regard myself as a gun “stock picker”- my long-term success rate for “winning” stocks is about 55% for completed trades over a 20-yr period. What I think I am OK at though, is weeding out the dud trades and sticking with the winners. My overall results are good. I find that if you surround yourself with solid growing companies – more good things will happen than bad things.

I think a couple of follow up posts are in order to pass judgement on some of the good, and bad, ideas that Slack Investor has thrown out into the world.

01/09/2021 – The Slack Buying Process

Slack investor had a bit of loose change and was “on the buy”. I outlined my case for Alphabet (GOOGL.NASDAQ), the Betashares NASDAQ 100 ETF (NDQ.ASX), and the Coles Group (COL.ASX).

Ticker	Price 01/09/21	Price 30/06/24	% Growth
GOOGL	$143.74 USD	$182.15 USD	+26.7%
NDQ	$33.58	$45.51	+35.5%
COL	$17.74	$17.03	-4.0%
		Average Growth	+19.4%

Slack Investor “Buys” in October 2021

Coles Group (COL) turned out to be the only dud. Slack Investor fell into the trap of only considering the high Return on Equity (ROE) of COL at 31%, in isolation. I did not factor in its very low growth rate over the past 5 years. A 5-yr CAGR of only 0.7%. A better way of looking for growth is to make sure the business is good at making profits (high ROE) and has a history of growth (a high Compound Annual Growth rate (CAGR). Sporadic performance Slack Investor – 7/10

15/10/2021 – The Times They Are A-Changin’

Slack Investor was looking at technology changes in the music Industry using one of the more interesting charts that he has found. Who knew that “Peak Revenues”, from cassettes was in 1980, from CD sales in 1999, and peak music downloads in 2005. The only music revenue games in town now, are streaming, and live performances.

This was a roundabout way of showing the profound effect and fast moving pace of technology. I suggested a good way to capture this technology tidal wave was Betashares NASDAQ ETF (ASX: NDQ). The share price at publishing time was $32.47, at 30/06/2024 it is $45.51, up 40.1%. Well done Slack Investor– 8/10

15/12/2021 – Innovation

The human trait of innovation was explored and this was also seen to be a great attribute for companies that I would like to invest in. A simple way to expose yourself to innovation on the Australian market was through ETF’s. Betashares NASDAQ ETF (ASX: NDQ), BetaShares Asia Technology Tigers ETF (ASX: ASIA) and the ETFS Morningstar Global Technology ETF (ASX: TECH) were thought to be a way to do this.

ETF	Price 30/06/23	Price 30/06/24	% Growth
NDQ	$35.25	$45.51	+29.1%
ASIA	$9.29	$9.21	-0.6%
TECH	$101.90	$95.9	-5.8%
		Average Growth	+7.6%

Some “Innovation” ETF’s

With the exception of NDQ, not so good here and it is another internal warning to avoid the over-curated themed ETF”s. I am sill investing in NDQ, but I sold out of ASIA after 9 months as China was adding some “government risk” to their stock market. Fortunately, I didn’t get around to investing in TECH. An inconsistent effort, Slack Investor seems easily distracted – 5/10

15/01/2022 – CSL Goes to the Well

One of the Slack favourites, CSL, asked shareholders to stump up some money in a Share Purchase Plan. The asking price was $273 – which I thought was OK for such a great, growing company. The share price at 30/06/24, is $295.21, up 8.1%. A solid performance, Slack Investor, but not shooting the lights out – 6/10

01/11/2022 – Finding Value

I liked the look of Dicker Data (DDR) after a slump in its share price. At the the publishing date, DDR was trading at $10.44. At 30/06/24, it is $9.66, down 7.5%. Since November 2022, there has been a downgrade in profits and the CEO has sold 10% of his shares. The forecast numbers still look OK, but so far disappointing. DDR is on shaky ground – and could get the chop! Needs Improvement, Slack Investor – 2/10

15/11/2022 – The Hubris Ark

Slack Investor had a “bit of a go” at famous US investor Cathie Wood and her ARK Innovation ETF (NASDAQ: ARKK). My case was, that their was a lot of talk … and not much performance from her $6 billion USD actively managed fund. The price chart has continued to languish, and her 5-yr performance figures have got worse – and well behind the performance of the passive S&P 500 and NASDAQ 100 ETF’s. The 5-yr trailing annual return for ARKK is currently -1.6%. Compared to the NASDAQ 100 (20.5%) and the S&P 500 (15.0%). It seems as if Ms Wood’s Mojo has deserted her for now. Cathie Wood – 1/10; Passive US Funds – 9/10

June 2024 – End of Month Update

The financial year closes and the Australian, UK and US markets are all in positive territory.

Slack Investor remains IN for all followed markets. The ASX 200 (+0.9%) and FTSE 100 (-1.3%) didn’t move much for the month. It is a continuation of good times in the US with the S&P 500 rising 4.6%. There has been a big gain in the US market this financial year of 22.7%. On top of an increase of 16.4% last financial year, Slack Investor is getting a little nervous about the US – especially after the debate last week!.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index). The quarterly updates to the Slack Portfolio have also been completed.

Where to go fishing? – Part 3 – Where Fish Whisperers Go – and May 2024 – End of Month Update

A Day’s Fishing (circa 1923) – Edward Henry Potthast

After narrowing down my personal buying list to just 5 stocks – BetaShares NASDAQ 100 ETF (NDQ), Telix Pharmaceuticals (TLX), Technology One (TNE), Supply Network (SNL) and REA Group (REA), Slack Investor is always keen to get a second opinion – and that’s where the “fish whisperers” come in.

At this stage, I have so far bought into just one of the prospects (TLX) as, I’m hoping for a bit of a price contraction in the other stocks over the June/July period. I am not in a particular hurry to buy – as there has been recent news of “Interest cuts delayed” that might present a bit of downward pressure on stocks.

Sometimes, it makes sense to listen to the “Fish Whisperers” – those with special knowledge of the stock market. One of the financial sites that I will always look at for ideas is Livewire. Slack Investor is a subscriber to their free financial news email – just register with them. There is nothing more that I like than to saddle up to the hard work of financial experts – the hard thing, of course, is sifting through the chaff, for the wheat. But there are ways of identifying quality information – Do their methods echo with your own sound thoughts?

In a recent Livewire, Michael Wayne from Medallion went through a similar exercise to Slack Investor in looking for growth companies. His approach was slightly different to my simpler approach. Medallion Group has a far more resources than Slack Investor and his analysis more thorough, but, he still came up with a list that resonates with Slack Investors own.

Let’s first have a look at Michael’s established record. He helped set up a Medallion Australian Equities Growth Fund in March last year, so there is only limited data on performance as there is a short track record. The fund growth since inception is very good (net 12-mth performance (+17.69%) – c.f ASX 200 (+10.68%) – but you would have to say that these are “early days”. Consistent long term fund performance is notoriously hard with 75% of Australian Mid to Small Cap funds underperforming the index over 10 years.

Medallion charges a management fee of 1.5% plus an outperformance fee of 20% (Oooohhh … that hurts!!) – but in fairness, their net results are, so far, exceptional – and their methodology of screening stocks looks fundamentally sound.

Long Term Compounders

These are three of the most beautiful words to Slack Investor – they exactly describe the type of stocks that I want to own. A stock that will generate growth over the long term. Let’s have a more detailed look at how the Medallion Financial Group approaches this search for long term compounders.

A consistent compounder is essentially a business that’s able to deliver consistent or persistent earnings and revenue growth over time in a reliable nature. So these are businesses that are price makers, not price takers
Michael Wayne – Medallion Financial Group

From – How to identify consistent compounders – Michael Wayne – Livewire – Click to Enlarge

Michael Wayne prepared the list by screening the whole ASX for companies that have a five-year sales Compound Annual Growth Rate (CAGR) of above 5%, and a CAPE 10-year CAGR of more than 5%. Slack Investor is happy to have a further look at all of these companies.

These businesses also have a dividend per share CAGR over 10 years of more than 5%, five-year average gross margins above 10% and a five-year average return on equity over 10%. Yes Michael … keep up this research – as this is the sort of stuff that makes Slack Investor swoon!

May 2024 – End of Month Update

Slack Investor is IN for Australian index shares, the US Index S&P 500 and the FTSE 100.

There is a bit of end of Financial year calm with the ASX 200 (+0.5%). The FTSE 100 (+1.6%) is moving on and, in a moment that seems to celebrate ex-President Trump’s guilty verdict on all 34 counts of falsifying business records, the S&P 500 moves on (+3.7%).

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

Slack Investor vs Centrelink – My Application for a Commonwealth Seniors’ Health Card (CSHC)

Slack Investor likes the quiet life, and doesn’t usually go looking for trouble, but a recent birthday put me at 67 – this is the age threshold for the Australian Aged Pension. Other than feeling old, this is not too much of a concern as I am a happy self-funded retiree.

However, in a generous flourish, the previous government made it much easier for self-funded retirees to qualify for the Commonwealth Seniors’ Health Card (CSHC). This card provides savings on some Pharmacy costs and gives easier access to higher rates of reimbursement for out of pocket expenses (Medicare Safety Net). Some GP’s will offer bulk-billing to CSHC holders as they can get a higher Medicare fee for these consultations. So, this card looks worth the effort if you qualify and, looking at the new numbers, most retirees not on the pension, would.

Health savings available to CSHC holders – From Laterlifeadvice.com.au

Do you qualify?

Age pension age and an Australian citizen? The critical test is your income … and not just any income … but your “Adjusted income”.

To meet the income test, your “Adjusted Income” must be less than the following:

$95,400 a year if you’re single

$152,640 a year for couples

$190,800 a year for couples separated by illness, respite care or prison.

These values are valid for 2024 and they get inflation adjusted each year

For Slack Investor, it was a matter of gathering scans of our most recent ATO Notice of Assessment for my partner and myself. Plus contacting my Super Provider to send me an income schedule for each of my Pension accounts – These are known as form SA 330 and are often requested for dealing with Centrelink, DVA, etc.

As we do not own an investment property, the only inputs to our Adjusted Income were our taxable incomes and deemed income from our account based pensions.

Any money in our accumulation accounts or bank accounts was not considered in our deemed “Adjustable Income” as a couple.

Noel Whittaker provides a handy calculator to work out your total deemed income from your pension assets (Currently about 2% of assets). I stress it is not the actual income from these pensions that is relevant – but the deemed income! The asset amounts of our pensions (Estimated for the application date – from your super fund or SMSF) were put into Noel’s Calculator. As the total of our deemed pension income plus our taxable incomes was under the $152,640 a year for couples, we proceeded with the application online through MyGov/Centrelink/Make a Claim or Review Claim Status. This is where the fun begins.

Handy Tips

Before applying, get some identification documents ready and your latest ATO Notice of Assessment (in pdf form). Make sure you have a MyGov account and have Centrelink linked to it. I used the online form to apply, and it was frustrating at times, but generally OK. Others have downloaded the form, filled it out and taken it to Centrelink for checking.

Contact your Super Funds for a SA 330 schedule that will give you relevant details of any Account-Based Pension that you own for the last tax year.
If you have a SMSF, contact your provider and they will furnish you with information on each of your pension funds. You will then have to download and fill out your own SA 330, as a trustee, for each of your income streams.
At one of the forms sticking points, I found the video on the application process by Brendan Ryan of Later Life Advice very useful – worth a watch for a 22 minute overview of this process (the video is found in the top left third of the page).

I must warn that this application is not for the feint-hearted – But do not give up! If you are having trouble, book an appointment with Centrelink – They will also check your documents if you are not sure.

The complexities of dealing with Centrelink and the CSHC have been entertainingly documented in the SMH and YourLifeChoices. There were several points where I was having what my mother would describe as “Sailor’s Talk” with my computer.

For all the frustration and “dead ends” encountered during the application process, I found a strategy of “Walk away – and try again another day” did the trick. Although, I will not find out about whether my application will be successful till July 2024, I did learn something useful along the way … How to Edit pdf forms – which came in handy as SMSF trustees have to populate several SA 330 forms with mostly the same data.

Using Google Chrome to fill out PDF forms

I don’t have any form-filling PDF software (e.g. Adobe Acrobat full version) and I am reluctant to install the “free” clients that usually come with some adware or a trial period. I was delighted to find out that this form-filling task can be done in my Chrome browser without installing anything extra. Locate the PDF you want to edit in File Browser.

Right-Click the file to open up the context menu – Scroll down to “Open with” a new dialogue box will open showing Google Chrome if you have it. Select “Google Chrome”.

The form will then open as a Chrome Tab and you can edit away then save or print your changes (Download and Print Symbol at top right of the Chrome tab).