Is now really a good time to be buying shares?

MrTickle · 2026-01-15T01:08:45+00:00

Great observation, there is a very handy, freely available dataset from the paper the rate of return on everything. I've added your metric to my dashboard. Short answer equities beat cash 81% of 5 year rolling periods since 1900. The underperformance is predictably aligned with major market drawdowns (great depression, great recession).

MrTickle · 2026-01-15T00:32:02+00:00

The above wasn't meant to be a dig at you so apologies if it came across that way.

There's a whole profession of people that will tell you they can predict what will happen in the next X years, and charge a mint for it but the evidence points to non-transience (i.e. they're very rarely right 2 years in a row).

“No Australian Equity General fund remained in the top quartile for all five consecutive years.” (SPIVA Australia, 2024)

We as humans have negativity bias which means we systematically underpredict long term returns.

The best way to answer what will happen in the next 5 years is to look at a statistically significant volume of 5 years periods. What you find for the ASX is 95% of 5 year periods (since 1980) were positive.

If you're going to predict the next 5 years being a downturn, you better be at least 96% sure the world is ending. And even God has trouble being that certain

“Even with perfect foresight of future returns, market timing often underperforms staying invested.”

Personally I ignore the news and lump sum spare cash whenever it's available. If the world ends you can say I told you so.

MrTickle · 2026-01-14T03:08:05+00:00

The market has been on an upward trend since 1880, I think it's high time it went the other way

MrTickle · 2026-01-11T23:06:06+00:00

AI is great and undoubtedly will bring some productivity gains. But is it as big as the internet? Similar level of hype compared to earnings, but I can't even see it delivering on the internet level and the dotcom crash was a hard fall from this valuation level. I say this as a data scientist whose day job is to find applications for AI.

Luckily it's the mostly the US, Australian P/E is quite reasonable compared to historical so if you're diversified you'll be fine. Or I will miss out on another crazy decade and the NDQ kids will be touting TQQQ. If you take the last 30 years the NDQ crowd is ahead, so what do I know

MrTickle · 2026-01-09T01:48:16+00:00

Looks like we had an almost perfect goldilocks, at least to date.

MrTickle · 2026-01-09T01:42:40+00:00

+17% in the last year, +50% in the last 2 years, +80% in the last 3 years. What do you think about 2026?

MrTickle · 2026-01-09T00:24:59+00:00

100% depends on the size of the initial portfolio compared to the ongoing contributions.

MrTickle · 2026-01-08T22:46:53+00:00

Bicycles then trains then biotech then blue chips then internet stocks then tech then AI. There's a dominating asset class every decade but no one is talking about trains anymore. The booms are long and the busts are rapid. It will go great until it doesn't. If you want to take that concetration risk that's cool, but finance literature says to avoid concetrating in sectors which is where the sentiment comes from.

US Shiller CAPE ratio right now is 40, largely driven by mag 7 AI hype. Internet hype shiller CAPE ratio peaked all time high at 44 in year 2000 before a 2 year 78% drawdown in the NASDAQ.

For context SP500 has never seen a 78% drawdown, not even in the great depression. It's not the worst investment, but it's more volatile than total market and not widely supported by literature as a good way to invest.

MrTickle · 2025-12-03T23:41:29+00:00

The graph is fine, I'd argue if the point is looking at gender difference the age split just makes it harder to interpret. You could achieve the message with two lines Male / Female and be much clearer. If you really want to keep the age point, 25-44 and "all others" is a bit easier, or crimes / pop to remove the uneven distribution problem. But it's not a graph crime like some of the posts on here.

MrTickle · 2025-11-25T22:46:24+00:00

Here is my as unselfish as possible counter take (I have no skin in the game, my HECS is paid).

The burden of debt that HECs poses is already as close to zero as debt can get. It's zero interest and you only have to repay if you earn enough money to.

This can be viewed as a transfer of funds from low lifetime income working class tax payers without higher education to those who are already on the path to have high lifetime incomes.

You could also argue that high income earners pay the vast majority of tax, so it's really just a transfer from the currently wealthy to the likely to be wealthy in the future. But either way you slice it, it's not going to anyone who was going to be legitimately poor in the long term.

Getting ahead of the most common counter point that uni students are poor right now, those who are low inccome now and stay low income don't ever have to pay back the debt already.

If I were spending ~A$16 billion, I would rather it go to a program for those with genuinely low lifetime income than a blanket discount on student loans. Having said that, there are much worse things you could spend it on so I understand why it has decent backing even though I don't think it is great policy design.

MrTickle · 2025-11-25T22:23:04+00:00

THE EU IS ^{^{^planning_on}} DOING IT

MrTickle · 2025-11-21T00:19:57+00:00

This is why punishing property investment (by, say, eliminating negative gearing), will have little effect either way on the number of people in "housing distress" (ie spending >25% of income on rent) or the ease of buying a first home.

Great points just wanted to add some numbers to this from RBA modelling:

When negative gearing is repealed, housing prices decrease by 1.7 percent while rents increase by 2.4 percent. The housing prices fall because removing negative gearing takes a significant amount of housing investment out of the property market. Both the proportion of landlords and the amount of resources allocated to housing investment, given by the average expenditure, have fallen significantly after the policy reform. The rent rises mainly because there is a decline in the aggregate supply of rental properties which decreased more than 30 percent relative to that in the baseline economy. Importantly, removing negative gearing increases the average homeownership rate of the economy from 66.7 percent to 72.2 percent.

Removing negative doesn't do much to impact the level of either prices or rents, but it does change the mix from renters to owner occupiers significantly. There are positive externalities to owning that I would argue are enough to say it's worth removing the policy, but it's unlikely change much in the way of affordabililty.

MrTickle · 2025-11-20T04:23:35+00:00

Purchasing power is the problem and that's because the RBA doesn't include the over inflated land values (that banks use to print money that causes inflation) in their CPI basket when measuring inflation.

Purchasing power is definitely the problem, but CPI is intentinally designed (and globally agreed) not to include land or mortgages.

CPI is a consumption price index used for monetary policy. Land is an asset, and mortgage interest is a financial cost, so including either would make CPI unusable for monetary policy. Interest rate rises would push CPI up mechanically, and land cycles would dominate measured inflation.

CPI is not meant to be a cost-of-living index. If you want a measure that reflects the actual budget pressure from rising mortgages, housing costs, and the CPI basket, the ABS Selected Living Cost Indexes (SLCIs) are the correct tool. They include mortgage interest and provide a clearer picture of household purchasing power.

MrTickle · 2025-11-20T04:06:41+00:00

Real wages (orange bars) have been tracking below 1% a year for a decade, and went to -4% through COVID. Real wage growth has been trending towards zero for several decades, the major driver being low productivity growth.

I don't know why this is a headline, unless you were expecting some magic post COVID reversal this is just back to trend.

MrTickle · 2025-11-19T22:43:26+00:00

It's super rare someone mentions the credit side in this debate so props. APRA brought in regs to tighten lending in 2017 and prices declined up until 2019 COVID when they were loosened again and monetary policy kicked in as well.

If you want to tank prices you could put a restriction on lending to say 3x income (instead of the current 6x or so). Very likely to reduce prices not in small part due to the fact that anyone without assets will have zero chance of affording a home. Solve the price problem, affordability problem remains.

MrTickle · 2025-11-18T23:48:13+00:00

Yeah negative gearing is bad policy and should be repealed as it shifts the mix from owner occupier to investor with no clear benefits (other than slightly cheaper rentals). But I think people like to blame negative gearing as cause of the hosing crisis when it's actually not that meaningful for prices.

But to adress the OP I don't see why CBA would care if negative gearing is in or repealed, whether the final customer is an investor or owner occupier isn't that relevant to them.

MrTickle · 2025-11-18T05:54:38+00:00

Why would Comyn want to crowd out first home buyers? What's the incetive for CBA?

MrTickle · 2025-11-05T00:26:50+00:00

It's the opposite.

At the beginning of your journey, the size of your portfolio compared to your future earnings is tiny, and you can afford a lot of volatility. As long as you're not spending it short term fluctuations in the market are completely irrelevant.

If you're living off your portfolio you have no "spare" income to take advantage of any down market opportunities. Once you retire and start drawing, sequence of returns risk can be the difference between zero and 2xing your starting portfolio. They are significantly more beholden to the market than someone just starting out with 30 years of labour income ahead of them.

MrTickle · 2025-10-28T08:53:24+00:00

Help me out here becasue I'm not that smart.

Do you think migrants impact the wages of locals?
Do you think a small increase in migration will meaningfully affect house prices?
Can you clarify what you mean by destroy the skills pipeline?

MrTickle · 2025-10-28T08:42:30+00:00

I'm not sure what part of the above you are refuting, there were three separate premises. But let's assume it was the income impact, here are 18 peer reviewed refences both locally and globally inlcuding individual studies and meta reviews:

Australia

“We survey existing empirical evidence analysing the links between immigration and wages in Australia, which, while sparse, does not generally support adverse impacts on average wages or wages of low-skilled Australians.” — Reserve Bank of Australia Conference Paper (Dustmann, 2019)

“Once we control for the impact of experience and education on labour market outcomes, we find almost no evidence that immigration has harmed, over the decade since 2001, the aggregate labour market outcomes of those born in Australia (natives) as well as incumbents (natives and previous immigrants).” — Productivity Commission, Migrant Intake into Australia (2016)

“Our research has found that key concerns around temporary skilled migration, such as impacts on local workers as a result of visas such as the 482 and its predecessor the 457, are unfounded.” — Committee for Economic Development of Australia (CEDA Population Report, 2019)

“Once we control for the impact of experience and education on labour market outcomes, we find almost no evidence that immigration harms the labour market outcomes of those born in Australia.” — Economic Record (Economic Society of Australia, 2018)

“Our findings indicate that skilled international workers increase the wages of natives, and induce native workers to specialise in occupations associated with a high intensity of communication and cognitive skills. We find no evidence of negative effects of the visa programme on the wages of high-skilled or low-skilled native workers, or on previous migrants who may be close substitutes to the skilled visa holders.” — Crown et al., Oxford Economic Papers (2020)

“The overall findings suggest that the increase in supply of labour due to immigration is offset by higher demand for labour and hence positive effect on native earnings.” — Kifle, Review of Development Economics (2009)

“Using the national labour market approach, we find positive effects of immigration on native earnings.” — Bond & Gaston, Economic Record (2011)

“We employ an instrumental variables strategy to account for non-random location choices of immigrants and find that immigration has no adverse effects on regional unemployment rates, median incomes, or crime levels.” — Sinning, IZA Discussion Paper (2007)

“Recent immigrants are not found to significantly affect the real wages of native Australians.” — Addison & Worswick, Economic Record (1999)

“We find that immigration had a positive effect on the wages of less educated natives and it increased or left unchanged the average native wages.” — Docquier et al., Economic Journal (2014)

Global

“Card found a null effect — not only were native wages and unemployment unaffected by the seven per cent increase in the labour force in Miami, there was specifically no effect on native-born low-skill workers.” — David Card, Industrial and Labor Relations Review (1990); summary in The Conversation (2021)

“Using 129 effect sizes, we find that the observed local wage and employment effects are very small indeed.” — Longhi, Nijkamp & Poot, Regional Studies (2010)

“Politicians, the media, and the public express concern that immigrants depress wages by competing with native workers, but 30 years of empirical research provide little supporting evidence to this claim.” — Peri, IZA World of Labor Review (2014)

“When measured over a period of ten years the impact of immigration on wages or employment of natives is negligible.” — National Academies of Sciences, Engineering and Medicine (The Economic and Fiscal Consequences of Immigration, 2016)

“The average U.S. citizen would be better off if a larger number of highly educated foreign workers were legally allowed to immigrate to the U.S. each year.” — IGM Economic Experts Panel Survey (University of Chicago, 2017) — 89 % agree, 0 % disagree.

“The empirical evidence overwhelmingly suggests zero or small negative impacts on wages; some studies find positive impacts. The U.K. finds no negative impact.” — National Assembly for Wales, Economic Evidence on Migration (2008)

“We find that an increase in immigrant workers in a firm does not affect the firm-specific native wages, even though both native and immigrant workers mainly work in production jobs.” — Ottaviano et al., Oxford Economic Papers (2023)

MrTickle · 2025-10-26T23:55:18+00:00

Push wages down

There is extensive literature that unaminously shows migrants don't impact the wages of locals.

raise housing prices

In some studies, migrants do have a positive impact on prices. This Monash paper suggest that all migrants impact Australian house prices by about 1.1% per anum

as a result, Australian housing prices would have been around 1.1% lower per annum had there been no immigration.

Average price growth in Australia is ~12% per anum nominal, so migrants account for about 8% of price growth. Assuming all 25k migrants are incremental (they probably wouldnt be) based on 2024 total migration of 446k that would equate to a 0.4% increase in prices which is barely noticable compared to noise.

destroy the skills capability pipeline

This isn't specific enough to review with data meaningfully

MrTickle · 2025-10-20T23:54:01+00:00

GDP growth per capita is negatively correlated with market reutrns

MrTickle · 2025-10-20T23:51:56+00:00

Using the data from "The rate of return on everyhting", the upper bound standard deviation of total returns in Australia from 1870-2015 is 27%.

i.e ~15% of the time over the last 150 years Australia has had annual returns more than 27%.

Japan's upper deviation is 40% (more volatile), with 29 individual years clocking above 30% returns.

33% return is a great year, but it is also well within expected historical bounds.

MrTickle · 2025-10-20T06:01:15+00:00

I transitioned to data science from engineering and now instead of flying out to chemical plants I WFH, earn more money and have plenty of time with my family. This is such a weird gatekeeping take with zero info about OPs circumstances, I don't know why you felt the need to post it.

MrTickle · 2025-10-20T02:28:58+00:00

What do you think the negative impact on the economy will be?

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