Category: Monthly Updates

Lessons in Going Down – and October 2024 – End of Month Update

Dramatic falls in a stock price … are not very nice. However, they are part of the game when investing in growth stocks. These falls usually come during reporting season. This is sometimes known as ‘confession season’.

ASX-listed companies are all required to report their earnings within two months of June 30 and December 31. The half-year reports are usually floated into the market during August and February – and this is the main time that the confessions come in. ASX companies can also give quarterly updates and, they are strictly bound by ‘Continuous Disclosure’. This is where they are obliged to promptly announce any new information that may affect the stock price.

Once an entity becomes aware of any information concerning it, that a reasonable person would expect to have a material effect on the price, or value of the entity’s securities, the entity must immediately tell ASX that information – ASX Continuous Disclosure Guide

When bad news comes in, there will be an announcement and there is usually a fall in stock price. Most of the time, bad news comes in the form of an earnings forecast not being met – an earnings downgrade. It is time for Slack Investor to get off the couch.

Slack Investor is not a ‘Day Trader’ and, also Slack! This means that he doesn’t get wind of a dramatic fall in one of my holdings till the end of the day. Sometimes it is even days after the event.

This gives him time to think about what to do next, and there are two schools of thought.

  1. Accept the loss and sell the stock to employ your funds elsewhere – as bad news often comes as a series.
  2. Reassess the numbers on the company and ask ‘Would you invest in this company today at the current price?‘

Experience tells Slack Investor that he is usually better off with option 1 – and investing the proceeds with a, hopefully, price increasing stock.

Recent Case Studies from the Slack Investor Rogue File

Megaport (MP1)

1-YR Chart Megaport – From Yahoo Finance

This was a sudden fall from grace as it was bought in August 2024. There was an earnings downgrade and it was an easy decision to get out – as no ‘love’ had been developed for the company. Slack Investor was wrong on his understanding of this companies earnings growth.

Webjet (WEB,WJL)

This is a complex one. Slack Investor recently bought Webjet (WEB) at around $9 on the basis of their fast growing internet business WebBeds – and its seemingly good projected numbers. In September 2024, Webjet went through a demerger that split the business into its retail Travel Agent (Webjet Group – WJL.ASX) and its global Business to Business booking site, mostly WebBeds, (WEB Travel Group – WEB.ASX). Webjet announced a profit warning on 14th October and the share price plummeted 35% in a day. Whoops!

1-YR Chart WEB Travel Group – From Yahoo Finance

Slack Investor planned to sell WJL, the retail travel agent part of the business (not a high growth sector), and keep the growing (+22% CAGR) demerged WebBeds (WEB). This might be a good business one day – but the big 35% drop spooked him and he sold them both for a combined price of $4.80. Ouch!

Codan (CDA)


5-YR Chart CODAN – From Yahoo Finance

Slack Investor thinks this is a good growing business but they had some revenue shortfalls that caused a 19% 1-day price drop in 2022. He probably should have got out then. However, he has grimly stuck with them and, after 2 years of falling stock prices, they seem to be on the right track. It remains in his portfolio.

Dicker Data (DDR)

5-YR Chart Dicker Data – From Yahoo Finance

After a 16% fall in a day in May 2024, Slack Investor reassessed the numbers on this stock – a projected 2026 PE of 16 and an ROE of 39%. The numbers looked pretty good – and he held on. However, the last two years of revenue growth have been 2% and 4% respectively. Slack Investor is not sure what is going on … but this company has not been growing. He sold at $8.69 this week.

Taking a loss … and moving on

This is a real skill – that doesn’t come easily – but is essential for managing a portfolio of growth stocks. Slack Investor is better at this than he used to be. Usually, growth stocks will come with a high Price/Earnings ratio as the future earnings growth will be factored into the price of the stock. These type of companies are particularly susceptible to a rapid decline in price when bad news emerges that might affect future earnings.

  “Some people automatically sell the ‘winners‘— stocks that go up— and hold on to their ‘losers‘— stocks that go down— which is about as sensible as pulling out the flowers and watering the weeds” – Peter Lynch – One Up On Wall Street

Slack Investor tries to adhere to the Peter Lynch philosophy when tending to his garden of stocks. He doesn’t always get these decisions right – but he does find it ‘cleansing’ to get rid of the bad performers. With experience, he has found that, more often than not, if there is a dramatic 1–2 day fall in a stock price (>15%) – it often takes a while to recover! Slack Investor is usually happy to take the loss and move his funds elsewhere. There is ‘opportunity cost’ in staying with a stock that is going nowhere.

Despite these bad performers, he doesn’t beat himself up about them. It is just part of investing. He takes solace that his whole portfolio is up about 8% in the 4 months of this financial year – and he does have good long-term results.

With the money raised from selling the dud investments, he bought into quality earnings with half the proceeds topping up his Supply Network (SNL) holding. The rest went into a new stock that he has been watching for a while – the logistics software business WiseTech (WTC).

The company had a price drop over a saucy scandal involving the founder and CEO Richard White. He resigned and Slack Investor is betting that these private-life dalliances should not interrupt the fine profitability (ROE 2026 20%) and established revenue growth (1-yr 2024 CAGR 20%) of this great Australian company.

1-YR Chart WiseTech Global – From Yahoo Finance

October 2024 – End of Month Update

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

All markets drifted down slightly. As many of the big market crashes have occurred in September and October, Slack Investor is always relieved to get past this time of year.

For October, the ASX 200 (-1.3%), the FTSE 100 (-1.5%) and the S&P 500 (-1.0%).

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

Auto-Diversification … and September 2024 – End of Month Update

Slack Investor tries to be a little diversified in his investing with his Three Pile Theory. Although my Investment Pile (The Slack Fund) consists mostly of Australian and International Shares, my Stable Pile (about 30% of retirement funds) consists of annuities, Real Estate ETFs, Fixed Interest products, some high dividend paying shares and some Cash. I own no bonds, Gold or Cryptocurrency. I am not very strict about rebalancing … but, that’s because I am slack! Deep down however, I’m convinced that diversification makes good financial sense.

A quick look at the yearly Vanguard diversification table below shows the percentage annual total returns for 9 different asset classes. I have only shown the last 17 years, but the 30-yr table can be found here in .pdf form.

Total returns for each asset class for the 30 years since 1992 – Check out the full 30-yr glory of the Vanguard 2024 – Importance of Diversification.pdf – Click this chart for better resolution.

For financial year 2024, the best performers were: Australian listed property returned 24.6%, US shares 24.1% and hedged ($AU) International shares 21.5%. The point of the Vanguard table is to highlight that it is very hard to try and predict the yearly winner. Slack Investor notes that International shares (particularly the US) have featured in the top 3 for a lot of these last 17 years. He also notes that Cash is a rare top performer – but, well done for 2022! It is always useful to have a look at the Vanguard Long Term Investing chart for a reminder of the compounding power of share investing.

Auto-Diversification

Superannuation

All of your Super contributions end up in a fund that is diversified to some extent. You usually can decide on how diversified you want it to be. For example, Australian Super offers, in their pre-mixed options: High Growth, Balanced, Socially Aware, Indexed Diversified, Conservative Balanced and Stable offerings. Even their High Growth option is split into a number of different asset classes – though their ranges seem a little ‘loose’ for full disclosure to their clients.

Australian Super ‘High Growth’ Pre-Mixed asset allocation by weight – June 2024

Slack Investor’s instincts has always been to be invested with the highest growth option … though I did reassess this a few years before retirement!

Other Investments

OK then, super is taken care of … but what if you want a diversified option for other investments that could be assured long-term growth without constant input. This is where robo advice might shine. Robo advisors usually package a mixture of low cost ETF’s into a diversified portfolio with automatic re-balancing.

Slack Investor is aware of many robo advisers that operate in Australia. ValueWalk has prepared an excellent summary article. Valuewalk compares and reviews: CommSec Pocket, Spaceship Voyager, Betashares Direct, Raiz, Sharesies, Pearler, Stockspot and InvestSMART.

Just for example, I will expand on the offerings of Stockspot as they have been going the longest and have the most assets under management ($800m). I have no financial interest in the company – though I am impressed with their results – outperforming 98% of similar funds over a 5-yr period. Depending on the risk profile that you want, Stockspot uses various combinations of just 5 low-cost ETF’s – one of which is gold.

There is a sliding scale management fee for which all admin and rebalancing is taken care of. For example, for account balances of $200,000+, there is an annual fee of 0.528% per year.

When Slack Investor loses the ability to stock pick growth stocks effectively (or, perish the thought … shuffles off this mortal coil!), I will set up some succession plans that will move our investments onto a secure ‘minimal involvement’ platform such as robo advice.

Slack Investor is old fashioned when it comes to ETF ownership. I much prefer the robo advisers that run under the HIN system (Holder Identification Number) – where the ETF’s are registered in your own name. This makes things simple if the robo adviser should cease operations e.g. Six Park (Aust).

The alternative is the ‘custodial’ system – where the investments are held on your behalf. Although custodial models can have lower costs – I like to see my name on the ownership documents. Stockspot is one of the advisers that run under the HIN system.

Although Slack Investor is a great believer in finding out about financial things for yourself with the magic of the internet. This way is not for everyone. Let’s just be clear, for most people, if you want specific advice on wealth management, tax advice, estate planning or a multitude of other finance problems, you are best counselled to seek a qualified financial adviser.

However, if you have a lump of money that you want invested in a diversified way that suits your risk profile, then robo advice seem a relatively cost-efficient way to ensure your investments are spread across asset classes. Naturally, Slack Investor would like the fees charged by robo advisors to come down a little before he parts with his Slack funds.

September 2024 – End of Month Update

Another month with a big range of daily closing values. The ASX 200 (+2.2%) and the S&P 500 (+2.0%) are in all time high territory. The FTSE 100 languishing and down 1.7% for the month.

Slack Investor remains IN for all markets.

The recent strength of the US market has pushed the closing monthly value to more than 15% above my old stop loss. I adjusted the stop loss upwards to a new ‘higher low’ of 5119.

Weekly chart for the S&P 500 Index showing the stop loss revised upwards to the new “higher low” of 5119.

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

The quarterly updates showing the shares in the Slack Portfolio have also been completed.

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.

CoupleSingle
$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).

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 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).

TickerPrice 01/09/21Price 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.

ETFPrice 30/06/23Price 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

Chart from MarketWatch of the ETF ARKK

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).

Where to go fishing? – Part 2 – Gutting the Fish – and April 2024 – End of Month Update

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

After the excitement of catching a fish there is the relatively unpleasant process of gutting the fish before things get exciting again – the cooking and the eating!

Same with stocks, the financial media is full of “darling” stocks. However, Slack Investor likes to take a deep look into the entrails before parting with his precious funds for the glorious pleasure of share ownership. The data gathering is not the most exciting part of investing and Slack Investor likes to keep things simple here – and finds the best way to sort out the worthy fish is to put them on a list with a few relevant numbers ” the guts”.

Profitability and Growth are two things that really impress Slack Investor and I have probably oversimplified matters by just representing these complex things with one number for each. For Profitability, I am using the Return on Invested Capital (ROIC) – For Growth, I am using the Compound Annual Growth rate (CAGR) for the companies revenue over a 3-yr period. Both of these numbers were obtained from the excellent Morningstar site, search for the company and then use the “Key Stats” tab. I tried to use the latest figures available.

The companies that Slack Investor did a bit of research on is not definitive … I usually look into my own portfolio first to see if the investment case still stands … and, if the company has been performing well, I like to add to my holding.

The newer stocks come from a variety of sources – usually the financial press. I tend to stay away from mining and retail stocks because of the uncertainties present in these sectors. As these potential buys are a replacement for my largest portfolio member, Altium (Potential Takeover target), I have concentrated on the “growth stocks” The first screening is for growth using the CAGR and the ROIC.

Gather the Data

I have put all my prospective BUYS in a list

CompanyTickerROIC 23CAGR 3-yr
Alphabet (US)GOOGL2419
Altium LtdALU2313
Audinate AD81232
Car GroupCAR725
Cochlear LtdCOH1714
Codan LtdCDA149
CSL LtdCSL1013
Dicker DataDDR164
Fisher & Paykel Healthcare Corp LtdFPH148
Microsoft (US)MSFT2914
NextDCNXT-13322
NVIDEA Corp (US)NVDA6654
Pro MedicusPME5030
REA Group LtdREA2016
ResmedRMD1513
Seek LtdSEK-1-8
Supply NetworkSNL2423
Technology OneTNE3013
Telix PharmaceuticalsTLX35380
WiseTechWTC6024
XeroXRO-523

The list needs a bit of narrowing down so I applied a filter to reduce the field to a top 10. I refined the list to those companies that have a historical ROIC of greater than 20% and a 3-yr CAGR of greater than 12% – this now becomes a list of great, profitable, efficient companies that are growing. I also added Forecast P/E ratios for 2026 from MarketScreener.

CompanyTickerROIC 23CAGR 3-yrP/E 2026
NVIDEA Corp (US)NVDA665426
WiseTechWTC602460
Pro MedicusPME503082
Telix PharmaceuticalsTLX3538035
Technology OneTNE301333
Microsoft (US)MSFT291426
Alphabet (US)GOOGL241918
Supply NetworkSNL242321
Altium LtdALU231345
REA Group LtdREA201636

The Price/Earnings Filter

The above list represents some profitable, growing companies – but they might be priced too highly. Slack Investor generally doesn’t like to pay for a forecast P/E ratio of over 40 when I’m buying a new growth stock – that means the projected earnings are 40 times the current price of the stock. This reduces the table to 7 stocks. I can reduce the table even further by taking out the 3 US based stocks (MSFT, NVDA, GOOGL) – which I can buy in one trade by purchasing more of the ASX listed NDQ . The Betashares NASDAQ 100 ETF was already on my BUY radar. Have a look at the 1-yr returns on these amazing growth companies in the table below of top NDQ holdings – It is unlikely that this stellar growth will continue … but there is certainly momentum here.

BetaShares NASDAQ 100 ETF (NDQ) top ten holdings – Morningstar

The Final List – this is not advice!

CompanyTickerROIC 23CAGR 3-yrP/E 2026Price
Telix PharmaceuticalsTLX3538035$15.05
Technology OneTNE301333$16.25
Supply NetworkSNL242321$20.05
REA Group LtdREA201636$179.64
Betashares NASDAQ 100NDQ–1827 (2024)$41.35

As well as BetaShares NASDAQ 100 ETF (NDQ), I will be looking forward to topping up my supplies of Technology One, Supply Network and REA Group and hoping for a bit of a price contraction over the next couple of months. The share price shown in this table is at the end of April 2024.

A newcomer to this list is Telix Pharmaceuticals (TLX) – a relatively new entry to the ASX that develops radiopharmaceuticals for cancer diagnosis and treatment. There is a lot of talk of this companies potential.

“It’s developing into a premier global radiopharmaceutical company … I see this as going on to become the next CSL in Australia.”

Shane Fitzgerald, Monash Investors – Livewire

A CAGR of 380 is skewed by recent figures – but they definitely are a growth company – but there is risk here! Slack Investor will roll the dice and add a bit of this to his portfolio while it is still around the $15 mark – there is a bit of momentum with this stock – might have to get in soon! He likes that they already have a money-making product and they have a further product pipeline ready to roll out.

(Telix Pharmaceuticals) has demonstrated extraordinary progress by generating over $100 million in revenue in the March 2023 quarter, a remarkable leap from zero, less than twelve months ago. 

Sean Sequeira – Australian Eagle Asset Management

April 2024 – End of Month Update

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

A bit of the froth has settled down with the ASX 200 (-2.9%) and the S&P 500 (-4.2%). However, the FTSE 100 (+2.4%) is powering on at the moment. After a while in the doldrums, the FTSE 100 is now reaching record highs with the expectation of some interest rate cuts soon.

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

Super, a home, and the Pension … a fruity mix! – and February 2024 – End of Month Update

Even Superman has his limits – Is it Kryptonite OR Brussell Sprouts?

Slack Investor writes a lot about Superannuation because it is a fantastic component to have in your armoury to establish financial independence – in a tax-effective way.

The ultimate aim for Slack Investor is to fund your own retirement, but in reality, according to the Association of Superannuation Funds of Australia (ASFA) estimates, a minority (43% ) of Australians of retirement age would be self-funded by 2023 – this percentage should increase as the compulsory superannuation system matures.

On 31 March 2023, 63% of the population aged 65 and over were receiving the aged pension (full or part), or other government-funded income support.

As so many Australians rely on a mix of both their super and the aged pension for retirement, it is worth revisiting the perverse ways in how superannuation interacts with the pension under the Assets test devised in 2017.

Your own Home

Before we get to this mix, by the time you retire, you do want to have a place to live and be free of landlords. This may sound impossible to some at the moment – but it is a vital part of financial independence. It can be a “tiny home”, an apartment, a place in a regional area …. as long as it is yours!

Tiny Homes – This 20 sq m little bewdy will set you back $32 000 – however, you still have to find land for it – and connect to services.

It is so important to aim to own your own home by the time that you retire – even if it is a 1-br apartment. Admittedly, this is so much harder than it used to be! Looking at the figures below, it is vital to get as large a home deposit as you can to reduce your borrow amount – this should be one of your early financial goals. However, without help, a multi-bedroom home near a capital city now seems near impossible.

If you dont have a deposit, October 2023 data showed that Australians need an income of more than $300,000 a year to buy a median priced home. Household incomes required were considerably less, but still “eye watering”, for outer suburbs and regional cities. e.g. Geelong $243,333, Brisbane $223,333. Apartments are usually less expensive – and require less income to service the home loan.

Things are really bad at the moment for future home owners. It was assessed that for the home market to “affordable” home prices needed to be on average 3.0 times the average median income. Currently, Australia’s housing market has a median multiple of 9.1! I am hoping that future governments will adopt policies that will reduce house prices – But I am not holding my breath.

Super and the Aged Pension

At its most basic level, superannuation is forced retirement savings for all working Australians. A compulsory contribution of 11.5% of your salary (from 1 July 2024) that will compound till your preservation age (between 55 and 60).

According to Treasury projections, about 60% of retirees will have less than $250 000 in super in 2024. This amount of super is not enough to fund a comfortable retirement. $250 000 in pension mode at the official Age 67 drawdown rate of 5% generates only $12 500 income per year. Clearly, many Australians will need to rely on a mix of their super and the aged pension for retirement income. The Aged Pension is available to Australians over 67 – but, it is means tested.

The bare minimum to aim for is the “sweet spot” in the aged pension asset test where your assets are a bit more than the maximum allowed for the full pension. Under current rules (2024), home owning couples can have $451 500 in assets (singles $301 750) and still qualify for the full government aged pension (at age 67).

In 2020, the Alliance for a Fairer Retirement System pointed to a super sweet spot of around $400,000, which can see a pensioner (home-owning) couple “earning $1,000 a month more than a couple with $800,000 in savings.”

Nicola Field (Using data for 2020/21)- Canstar

The first chart shows 20 different amounts of superannuation that you might have saved up by the time you are ready to retire – ranging from $150 000 to $1 100 000 above chart – from saveoursuper.org.au.

This next chart is far more interesting, it shows your total income from different amounts of superannuation (shown in the above table) mixed with the aged pension – for a home owning couple. For simplicity, these tables assume your only non-home assets are in super and the aged pension rates were those applicable in 2021 ($34 777 per couple). The essence of the table is still valid.

Total amount of retirement income – for a home owning couple – Combination of Part-Aged Pension (orange) and 5% of Superannuation Balance (Blue) for each of the 20 amounts of Superannuation Balance shown in the first chart (Using data for 2020/21)- saveoursuper.org.au

Bizarrely, there is a point on the total retirement-income (couple) table corresponding to around $400 000 in assets/super where an increased assets/super balance does not lead to an increased total income due to the asset test pension taper rate. Above that point, for those on the part-pension/super mix, the more super you have, your total income actually goes down. This strange anomaly exists for assets/super between $400 000 and $800 000 (2021/2020 data).

Clearly, the current assets test to qualify for the aged pension is unfair and provides a disincentive to save -and should be changed. But, until then, a major retirement goal is to use your super to get your total assets to near the sweet spot before you reach age 67.

(It)is not fair that people who forgo consumption and save more to increase their living standards in retirement and reduce their reliance on an Age Pension should instead get less retirement income. This is the perverse outcome for a large range of savings under the 2017 assets test.

Jack Hammond and Terrence O’Brien – saveoursuper.org.au

How the Assets test works (in real life) for the aged pension (2024 Data)

According to Services Australia, for the aged pension, assets are property or items you or your partner own in full or part – this does not include your home! It does include Financial Investments (Bank accounts, shares, managed funds, annuities, etc), Personal assets (Home contents and vehicles), Superannuation and Real Estate.

I had a recent example of filling in an assets form for a close relative. Her bank statements and investments were easy to quantify. We were advised that personal assets should be valued according to what we could get if we were “keen sellers”. It was suggested to us that, other than vehicles, most peoples personal effects would amount to between $5000 and $10 000. This proved to be near the mark as most furniture and home items end up having to be donated when finalizing a deceased estate.

For the table below, the aged pension and asset limits are current values* and correct at February 2024. Using 2024 data, the “sweet spot” for assets is now near $451 500 for couples ($301 750 for singles). If you had $250 000 in super, and your “other assets” added up $60 000 (Car $13 000, Bank Ac’ts/Shares/Funds $35 000, Home Contents $12 000). Your Total assets would be $310 000.

For a couple with similar “other assets” and a combined super of $400 000, your total assets would be $460 000.

SituationAsset LimitOther Assets*SuperDrawdown from Super @ 5%Age PensionTotal Income
Single Home-owner$301 750$60 000$250 000$12 500$28 514$41 014
Couple Home-owner
(Combined)		$451 500$60 000$400 000$20 000$42 988$62 988
Table based on a single home-owner with $310 000 total assets ($60K + $250K) and a couple home-owners with $460 000 total assets ($60K + $400K) – using Feb 2024 values for the Aged Pension and Asset Limits.

Using this mix of super and the pension, when reaching the pension qualifying age , a modest to comfortable retirement is possible under current rules when you own your own home. Also, under the Work Bonus Rules, singles can earn up to $5304 (Couples $9360) in a part-time job without affecting their aged pension.

Comfortable lifestyle (p. a.)Modest lifestyle (p. a.)
Couple $71,723Couple $46,620
Single $50981Single $32,417
ASFA calculated annual retirement requirements for those aged 65-84 (September quarter 2023) for both “comfortable” and “modest” lifestyles

February 2024 – End of Month Update

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

Little movement this month for the ASX200 (+0.2%) – but, it is testing new all-time highs. Nothing happening with the FTSE 100 (0.0%) at the moment.

The S&P 500 (+5.2) and the NASDAQ 100 are hitting new record highs and Slack Investor is pleased to go with the momentum but remains nervous for these markets.

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

2023 – Hope You Were Strapped In …  and January 2024 – End of Month Update

From Boredpanda.com

Slack Investor usually just assesses stock market returns at the end of the financial year. However, calendar year 2023 was some ride.

The 2023 ASX 200 Chart

For the 2023 calendar year, the ASX 200 Index started at 7020, and ended up at 7590 – a 12-mth increase of about 8% – but, on the way, it fell to a year low of 6751 – a temporary fall of 3.8%.

Of course, If you did not look at the charts daily, these fluctuations would mean nothing. If you ony looked at the Australian Index at yearly intervals, 2023 would probably bring some joy. As well as the overall 8% gain for the year, when you include dividends, the ASX 200 Index total return for calendar year 2023 was 12.2%. The ASX “All Ordinaries” Index (Tracking Australia’s largest 500 listed companies) had a total return of 13.0%.

Slack Investor will again emphasize the joy of investing and mostly doing nothing – and trying to focus on longer term returns. One of the best summary charts I have seen for a while that shows calendar year returns has just been updated and published by Ashley Owen. Ashley uses the “All Ordinaries” Index rather than the ASX 200 Index- as there is more historical data available for comparison.

Total ASX “All Ordinaries” calendar year returns – with the the last 5 years highlighted – From Ashley Owen – Owen Analytics – (Click to Enlarge)

The first thing that jumps out in this chart is the amount of “Green” positive years vs the “Red” negative years. In 78% of calendar years, ASX Index returns are positive. The overall average total return since 1900 for the Australian “All Ordinaries” Index is 11.7%.

Inflation has been the topic of the day lately and Owen has kindly provided his calendar year chart in terms of Real Returns for the All Ordinaries Index – The total return minus the inflation rate (Consumer Price Index (CPI)). A certain amount of cash is worth holding to for liquidity – so that you can avoid selling stocks in a market downturn. Although cash can iron out some of the stock market fluctuations, being invested in cash is not a protection from inflation.

Total ASX “All Ordinaries” calendar year “Real” (minus inflation) returns – with the the last 5 years highlighted – From Ashley Owen – Owen Analytics – (Click to Enlarge)

Adjusted for cpi increases, the overall average “Real” total return since 1900 for the Australian “All Ordinaries” Index is 7.9%. Slack Investor is willing to put up with the volatility of share markets for an average “after inflation” return like this.

For financial independence and as a hedge against inflation, it is important to own growth assets – such as the Australian Share market. Sure, there will be the occasional negative annual returns ahead … but let’s not worry about this while the Australian stock market is rising. Long-term overall results are the important thing.

January 2024 – End of Month Update

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

After a big Christmas Rally, things have settled down a bit with modest gains for the ASX 200 (+1.2%) and the S&P 500(+1.6%). The FTSE 100 had a small fall ( -1.3%)

It was time to adjust the stop loss for the S&P 500 as the current value is over 15% greater than the stop loss. Slack Investor has long believed the US market is overvalued and, while enjoying the journey, is happy to have his stop loss a little tighter. It is difficult to do the adjustment on the monthly chart, so I had a look at the weekly chart for the S&P 500 below. I am looking for a dip in the chart that represents a “Higher low”. The new stop loss now stands at 4682 – only 3% below the current value.

Extract from the S&P 500 weekly chart – From Incrediblecharts.com

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

Savings Rate and … December 2023 – End of Month Update

My last post on “Salary Sacrifice” got me thinking on the other things that I did to help myself on the journey towards financial independence. I have before stressed the importance of your savings rate as the primary tool in the box – and, more than anything, this is the number that will affect when you become financially independent.

This figure can be calculated a few ways, but for simplicity, let’s define it as your retirement savings as a percentage of your take-home pay (disposable income after taxes and deductions) – this can be calculated using fortnightly, monthly, or yearly data.You can work out your own savings rate or, if you are in a stable relationship with a combined goal, include your partner’s savings and take-home pay.

SAVINGS RATE (%) = 100 x (Total amount of Savings put aside for Retirement/Take-home Pay)

This savings rate is the percentage of your after tax income that you must be putting towards retirement – and it defines the number of years that you have to work until you can sustainably generate your expenses from your investments. There are some assumptions for the following chart:

This magical curve is presented below to bring a bit of clarity to your goal. The object is to get to the stage when your annual return on investments (Passive income) cover 100% of your expenses. This represents the beautiful state of financial independence.

From The Escape Artist – using the conservative assumption of a 5% return on your retirement portfolio after inflation.

In Australia, with compulsory superannuation, 10% of your gross salary is deducted from your wages. Taxation rates will vary, but lets just say that 10% of your gross salary is the equivalent of about 15% of your net salary (disposable income). You add your superannuation to any other retirement saving that you are doing to get your total amount of savings put aside for retirement.

Starting from scratch, from the above graph, if you worked continuously, and only relied on compulsory superannuation you enter the full-time work force and you are 42.8 years away from a retirement – where your living expenses are covered by the passive income from your retirement savings. In other words, if working continuously, a 22-year old starting full-time work will have enough passive income to cover expenses when reaching the age of 64.8 – relying solely on compulsory super.

In Australia, there is also the aged pension to kick things along after age 67. Obviously, if you want to retire sooner and have a bit extra for holidays, and to allow a bit of a safety margin, and be financially independent – You will have to do some extra savings towards retirement yourself.

How are people going with their savings rate?

For Australians, the compulsory superannuation system provides a sound base for retirement savings (with a working life of 42.8 years). This doesn’t factor in the government funded aged pension – subject to a means test. Currently the pension (September 2023) is $28,514 per year for a single person – But who knows if this will still be available at present levels in the future. It is best to plan for your future without it – and then accept it as a bonus if you qualify.

Although this sounds OK, any disruption to your working life (ill health, family, education, retrenchment, etc) will be a real setback to your retirement plans – Any work breaks will require additional savings for your retirement. In the US, the “average” savings rate was between 5-10% for many years. Despite some impressive savings rates during COVID-19, in July 2023, the personal saving rate in the United States amounted to 4.1 percent.

Statistic: Personal savings as a percentage of disposable income in the United States from June 2015 to August 2023 | Statista
From Statista

You would have to say … this does not bode well for a satisfying retirement for the “average” US Citizen.

What was the Slack Investor Savings Rate?

Rusted on followers of this blog will recall that I had a bit of a delayed start to thinking about retirement. I had just arrived back in Australia after a 6-year working holiday overseas. I was aged 30, broke, and the only thing I knew was that I didn’t want to continue working in the field that I was trained in – high school teaching.

Clearly Slack Investor had a bit of work to do. Once I was in regular employment again, I set about getting the financial building blocks in order. Emergency fund, house deposit … and then savings for my retirement. I did this mostly using salary sacrificing into superannuation and building up my own private share portfolio.

There is nothing Slack Investor likes more than burrowing into my financial history using the excellent and free “Sunset” international release of Microsoft Money. I use the  Australian Version. I have been using this software to track my finances since 1990 (33 years!)

Including superannuation contributions, my savings rate for retirement fluctuated between 20% and 45%. From the top graph, this represents a shifting rate that was equivalent to an overall retirement goal that required between 36.7 years and 19 years of working. Since “ground zero” at aged 30 and some extra education, I ended up working mostly full time for 28 years. Luckily, I had found a job as meteorologist that I really enjoyed.

This is not the “hard core” road to financial independence (i.e retire at 35, etc) – but Slack Investor thinks a reasonable compromise with the competing priorities of raising a family and buying a house.

Savings Rate is so important. Determine what your own savings rate needs to be to achieve your retirement goals – and automate your savings deductions as much as possible – and get cracking!.

December 2023 – End of Month Update

Happy Days. The year closes and, Slack Investor was definitely not naughty … a big December “Santa Rally” this month. All followed markets rose. The ASX 200 up a mighty 7.1%, the FTSE 100 up 4.0%, and the S&P 500 up 4.4%,

Slack Investor remains IN for the FTSE 100, the ASX 200, and the US Index S&P 500.

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.