Noel Whittaker
Noel Whittaker

Confusing times for investors

OPINION: THESE are confusing times for investors.  Interest rates are on the rise, house prices in many places have plateaued, and the share market has gone quiet after starting the year strongly. 

In a climate like this, the best way to approach investing is to go back to basics and understand that investing is an art and not a science.  This is why smart investors take the time to learn what advice is factual, and what is at best an educated guess.  For example, I can tell you without doubt that you can’t claim a tax deduction for interest on money borrowed to buy your own home but you can claim interest on money borrowed for investment.  However, if you ask me where the stock market will be in a years time, or whether shares in XYZ limited are a good buy, the best I could do would be to offer an opinion that may be right or wrong. 

For most people, the simple way to wealth is to buy a house in a good location and pay it off over a 10 year term.  Surplus income could then be used for a borrowing plan to invest in quality share trusts.  The house gives you a good lifestyle and an asset that is free of capital gains tax.  Because the share trusts diversify over a wide range of companies, they protect you from the disaster that may happen if you invest heavily in just one share and the company goes belly up.

We all know that cash in the bank might appear to be safe, but it offers no tax benefits and will lose its purchasing power to inflation over the long haul.  This is why we recommend a diversified portfolio with money spread over cash, property and shares.  Just keep in mind that growth assets like property and shares should be looked at over a ten year period.  This will give you time to ride out the inevitable flat spots.

Noel Whittake ris a director of Whittaker Macnaught Pty Ltd.  His advice is general in nature and readers should seek their own professional advice before making any financial decisions.  His email is

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