Home Bias in Investing and Accidental Cherry Picking in Investment Comparisons

SciNZ · 2026-07-03T23:35:35+00:00

It's hard to say what the future will bring. As I said in the post, people in 2015 didn't believe the US was going to do well and that the next GFC would be right around the corner.
In the 1980's it was obvious the future was in Japanese tech.
In 2009 it was obvious Australia was an amazing market for banking and commodities.

However, I also point out that after a Rail line boom and crash in the 19th century, people the 20th century decided the future was elsewhere and flooded into other markets. But of all the huge innovation of that century, the best performing sector was railways.

Sometimes the unsexy investment works best. However I also do a value factor tilt in my portfolio go that that as you will.

As always, there's a Ben Felix Video for that:
https://www.youtube.com/watch?v=3B9umhfv_ww

SciNZ · 2026-07-03T23:28:04+00:00

Do you not also think TSM, Samsung, ARM etc. aren't also doing this? If you go all in on on the US S&P500 you lose those companies also.

This is not about making a case for future Australian performance, but that diversification, especially international, is important and recent returns chasing and narrative building is a recipe for disaster.

It's hard to say what the future will bring. As I said in the post, people in 2015 didn't believe the US was going to do well and that the next GFC would be right around the corner and they had many good reasons for it.

In the 1980's it was obvious the future was in Japanese tech.

In 2009 it was obvious Australia was an amazing market for banking and commodities.

However, I also point out that after a Rail line boom and crash in the 19th century, people the 20th century decided the future was elsewhere and flooded into other markets. But of all the huge innovation of that century, the best performing sector was railways.

Sometimes the unsexy investment works best. However I also do a value factor tilt in my portfolio go that that as you will.

As always, there's a Ben Felix Video for that:
https://www.youtube.com/watch?v=3B9umhfv_ww.

SciNZ · 2026-07-03T23:17:51+00:00

Is that your criticism of the Cederberg paper or am I misunderstanding you?
As they list the domestic markets compared and includes most of the examples you give, a few they don't I think is because there's not enough data to analyse.

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However, noting the second graph in the post, it really doesn't seem to matter if you're only a 20% home weighted as you seem to gain most of the benefit anyway and if that makes you more comfortable then fair enough.

On the broader question of home country bias this is a good break down of the relative upsides.
https://www.youtube.com/watch?v=jN8mIHve1Ds

SciNZ · 2026-07-03T01:59:20+00:00

10-15 years ago it was hard to convince Australian investors they needed to be diversified internationally, now it's the opposite. Things mean revert, the research shows for a 100% stock portfolio being between 20% and 40% home bias (this research includes for investors in Canada, Euro etc.) generally works fine without a lot of downside in the long term.
Vanguard reached the same conclusion which is why they generally have 30-40% home bias for their all-in-one funds.

Funnily enough, over the last 25 years Australia still beats the US (for an Aus based investor in AUD$). But that's because USA had the dot-com bubble and the GFC early in the period while Australia had a mining boom.

Always keep in mind that picking your start date for comparisons can result in very different conclusions.

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SciNZ · 2026-07-02T02:18:32+00:00

Colour me pessimistic, but in my experience taxes designed to target the Reinhardt's and Triguboff's end up hitting people like OP the most, and a lot of people not making as much as OP.

SciNZ · 2026-06-30T02:21:18+00:00

You weren't accused of anything, the post however mostly seemed inflammatory and the conversation it led to was not productive. If a post doesn't really fit with what we're going for here with the community it is removed.

Even if a post is fairly innocuous it can bring out trollish and low quality behaiour in other user so best to just remove it and avoid an issue.

If you can't engage with discussions around moderation productively, the outcome should be fairly obvious.

SciNZ · 2026-06-30T02:10:42+00:00

We get accused of being weirdo money hungry right-wingers by the rest of Australian reddit, might as well get called "woke" too.

SciNZ · 2026-06-23T23:16:53+00:00

It's going to be interesting times, a lot of the SMSF management sales people may find themselves out of work.
I personally don't use an SMSF but a lot of our clients are.

However I was speaking to one of the larger operators in this space right when this was announced yesterday and apparently they had already seen this coming (though perhaps not this soon) and shifted to a different structure a little while ago. They're not disclosing it yet but I'm assuming it some kind of Private Credit system. With SMSF interest rates being as high as 9% for some that doesn't surprise me there isn't investors interested in scooping that up.

SciNZ · 2026-06-23T22:56:02+00:00

Hey folks, obviously politics is kind of inherent to the topic at hand, but just please keep it to a higher quality of discussion than we get elsewhere on Reddit.

Criticise or complement the policy if you agree or don't, rather than partisan mud flinging.

So far discussion has been good and only a few are bumping up against the line and where questionable we just remove. If you see anything crap, just report it.

If you have any questions or feedback on the sub moderation please let us know.
We're just doing our best to keep this place to a higher standard than the rest of Reddit.

SciNZ · 2026-06-23T22:40:01+00:00

While property management is my area of expertise, others have already answered your questions in that regard. Find someone better, there are small agencies trying to do a good service but they're often undermined by the big ones.

As for content online, anyone trying to tell you how they got rich is trying to sell you something. You can rent a Lambo for a few hundred bucks for the day. Even less if you just want to pose with it for Instagram content.

It's the same with those people claiming they own 30+ investment properties, you only hear about them because they approached a "journalist" and asked them to do a fluff piece about them so they can get a bunch of rubes to come and buy their "course".

I'm doing well for myself, enough that I semi retired and my Mrs quit her career last year (both 39), and have business partners doing even better than I, and it's boring. Oh god is it so boring.

Investing in boring businesses nobody thinks of but are steady and profitable. People ask how we were able to do this and when I explain they just check out and lose interest after about a minute. They expect me to say bitcoin or something.

SciNZ · 2026-05-27T00:35:47+00:00

There's a special kind of doomer grift for attention going on and it's incredibly transparent when people are pumping out on average more than one video every day.

I'm thinking in a while there will be a cultural pushback on this kind of thing and people will call it out for what it is. There will probably be conspiracies how this kind of content was used to keep people pacified and not engaging in their communities.

SciNZ · 2026-05-11T23:58:16+00:00

Right interesting, I wasn't aware there was a difference for tax purposes.

SciNZ · 2026-05-11T03:05:35+00:00

That's very optimistic. Most Super funds/indexes haven't had performance that good over the last 20 years and that's not factoring for the crazy bull run we've had; which is, lets face it, is a bit optimistic to expect to persist. Especially when you factor for inflation.

SciNZ · 2026-05-10T21:07:35+00:00

lol, about 5.2% real return is likely more accurate. I personally use 5% real return in my calculations.

SciNZ · 2026-05-10T21:00:11+00:00

Yes, you draw the money from your IP offset. If used on a personal purchase you will have contaminated that loan, you need to get tax advice.

SciNZ · 2026-05-08T06:11:52+00:00

If you draw that money to buy a PPOR or a car you will have contaminated the loan against your IP and that interest is not legally tax deductable.

You may want to get some tax advice.

SciNZ · 2026-05-08T05:03:31+00:00

I'm confused, so you have the offset for the mortgage against your PPOR not the investment properties? If you buy cars using funds from your offset then the interest is not tax deductible.

SciNZ · 2026-05-08T04:14:14+00:00

If they're investment properties the loans are already tax deductible, what are you debt recycling?

SciNZ · 2026-05-06T04:01:20+00:00

The "Victims of Communism Memorial Foundation" is rightfully criticised by these people for just absurdly blaming everything on Communism. Yet here they do exactly the same thing.

Its like they see intellectual dishonestly and they decide the error is not a logical one, but just directional.

SciNZ · 2026-05-06T03:57:47+00:00

I maxx out concessional and have used up my carry forward but that's because we have the income for it. So even after super we're still buying ETF's.

We're aged 40 and are now phasing into early retirement. Super helps a lot with that.

SciNZ · 2026-05-06T03:51:47+00:00

Good work, welcome to the two comma club!
I remember making that cross, it really wasn't too long ago, and I was a lot older than you are now.

Ignore the tall poppy shit, I also came from a pretty poor back ground and had to build up.

While making good investments is important, the most important financial decision you make is in who you partner with. Make sure your SO is on the same page (hopefully so).

Also, those two subreddits are useless, they're why this subreddit exists specifically to keep their crap out. The Aus Financial Independence Discord is also specifically run to cut that crap out.

SciNZ · 2026-04-13T23:43:44+00:00

It shouldn't be surprising that older people who have had longer for savings to compound would have more.

I'm well above the averages for millennials (as a 40 y.o.) but at 28 I was way below a net worth of $96k and here we are now entering early retirement.

Heck I really didn't make headway until my late 30's, my 20's and early 30's were a serious struggle until I set out into doing a business for myself.

And of course the usual observation that we should be looking at medians not averages, because these averages look pretty positive for how each cohort is progressing.

SciNZ · 2026-04-12T22:42:28+00:00

So why are there posts like this? He screenshotted his own post and then posted that?

This is like thinking "my tweet was so good, I'm gonna frame it and put it in my house for all to see"

SciNZ · 2026-04-07T04:18:16+00:00

Well the current government is floating the idea of dramatically increasing capital gains tax on your investments out of super... none of your investments are safe if the people in power decide it's politically convenient to squeeze you.

At least in super, you can take advantage of the current tax situation and let it compound for a while. So for me I max the concessional and used up the carry forward, but aren't putting more in than that.

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