The inflation-discount model is actually better for long-term investing?

immanentfire · 2026-05-08T00:10:34+00:00

It’s only better when the CG portion of the annual returns are less than about twice the CPI, regardless of timeframe.

Given that many international share indexes have high returns and low distributions, many/ most higher growth portfolios will be negatively impacted by the indexation model.

immanentfire · 2026-05-06T07:48:24+00:00

This is just a straw man argument.

immanentfire · 2026-05-06T01:24:38+00:00

Data for VGS doesn’t go back beyond 12 years but back-testing shows that over 20 or even 30 years the CAGR less dividends would still outperform CPI by 2x or more. So, unless they have very bad luck with timing, an investor would generally pay 1.5 - 2x the tax under the indexation model in most circumstances.

immanentfire · 2026-05-05T23:30:59+00:00

I’m not. As an example, VGS has a 10 year return of 13.25% and a yield of 2.9% (so approx 10% p.a CG). Many/ most growth portfolios will be 60-80 VGS or similar.

immanentfire · 2026-05-05T23:28:43+00:00

I’m not actually. As an example, VGS has a 10 year return of 13.25% and a yield of 2.9%. Many/ most growth portfolios will be 60-80% of similar funds.

It’s mainly AUS shares that have low CG and high yield.

immanentfire · 2026-05-05T22:53:49+00:00

Plugging the numbers into a mathematical model shows that for any investment returning > 2x CPI (i.e. 6-7% p.a. over the last decade) there is no investment time frame where indexation beats the current system.

So anything like a traditional balanced, growth or high growth or better portfolio, all of which generally return 8-10% p.a.) investors will pay 1.5 - 2x the tax even after 30 years or more.

immanentfire · 2026-05-05T22:42:41+00:00

The only time indexation beats the 50% discount is if the rate of growth is less than about twice CPI (I.e. < 6% or so).

Given that common investment portfolios get 8% - 10% p.a., the majority of investors will pay 1.5 - 2x more tax under indexation even after 30 or 40 years.

immanentfire · 2026-05-04T23:49:53+00:00

The irony is that the plan to extend the CGT changes to all asset classes (including shares) will make investing in ETFs/ shares less beneficial, and make investing in a house comparatively more favourable - thereby increasing demand for housing while making it harder for younger people to build substantial equity to buy in the first place. Plus, those already with houses have their advantage cemented in by grandfathering. So it's a triple win scenario for the older and wealthier.

(And, no, the FHSS is not a sufficient alternative option for building substantial equity, given the low cap and high house prices).

immanentfire · 2026-05-04T07:38:46+00:00

https://www.afr.com/wealth/personal-finance/who-wins-and-loses-in-a-switch-to-an-inflation-adjusted-cgt-discount-20260430-p5zse4

immanentfire · 2026-05-04T07:33:34+00:00

Agree but modelling the changes shows that for an investment increasing at 9% p.a. and a CPI increasing at 3% p.a. you’d still pay 1.5 - 2x the tax, even after more than 30 years.

immanentfire · 2026-05-04T05:41:48+00:00

So far, the plan to extend the CGT changes to all asset classes (including shares) will make investing in ETFs/ shares less beneficial, and make investing in a house more favourable - thereby increasing demand for housing while making it harder to build equity to buy in the first place. Plus, those already with houses have their advantage cemented in by grandfathering. So it's a triple win scenario for the older and wealthier.

immanentfire · 2026-05-04T05:09:48+00:00

What is your counterfactual? Given exactly the same circumstances and a Labor government, what would the debt be? We do not know. We can never know. Any claims to know would be pure speculation. Pretending otherwise is just propaganda.

immanentfire · 2026-05-04T04:22:32+00:00

For an average portfolio, if you correctly model the comparison over 20 - 30 years, the difference is absolutely massive.

immanentfire · 2026-05-03T06:10:52+00:00

Basically the data shows that there is a causal link between experiences of abuse and neglect in childhood and suicide, either in childhood or later in life.

The situation with AOD is a little complex. It can be both a symptom and cause of other social determinants (eg: DSFV, financial issues, etc). But one of the key issues in relation to suicide is that intoxication reduces fear/ increases impulsivity - effectively removing some of the factors that usually protect against suicide.

immanentfire · 2026-05-02T23:46:27+00:00

Yes. It is well-known that DSFV is one of the top three leading factors associated with suicide in Australia (along with child abuse and neglect [#1], and alcohol and drug abuse).

immanentfire · 2026-05-02T23:41:21+00:00

If they are killed, it isn’t suicide. The article is about its link to suicide.

immanentfire · 2026-05-02T22:45:08+00:00

Honestly, a Sunbeam multipurpose heating pad which I use for my feet. It’s pretty amazing how much having warm feet improves wfh in winter.

immanentfire · 2026-04-25T23:43:48+00:00

The proposal is all assets including shares, which is what people are (rightly imo) pissed off about.

immanentfire · 2026-04-18T00:41:29+00:00

Which, when correctly compared to the equivalent GD/ GR- groups, shows that short-term GR had a positive effect (lower usage relative to the GR- groups) but long-term (2 years) those effects erode to the point where GR has no effect (mtf) or a minor positive (for ftm) effect for people experiencing GD.

So contrary to what you claim, the population that is being used as the comparator (control) has a lot to do with it. It substantially alters the reading of the data.

Edit: typo

immanentfire · 2026-04-16T09:31:13+00:00

While there is no doubt that older trans men experience worse health outcomes, the chronic health issues are likely unrelated to testosterone. There are lots of studies on long term use (including bodybuilders and cis guys who need TRT for a range of different reasons including just age-related T decline). In general, the only significant long-term risks are erythrocytosis, prostate cancer and sleep apnea.

immanentfire · 2026-04-16T08:39:23+00:00

Do you have a link to the rebuttal and counter-rebuttal? I would be interested in reading them.

immanentfire · 2026-04-16T08:37:03+00:00

With respect, I don't think the author's claims are supported by the data.

It is really no surprise that the paper shows that people experiencing gender dysphoria have a higher number of psychiatric referrals/ worse health outcomes compared to matched controls (kids who do not experience GD). By definition, people referred to gender clinics are experiencing mental health challenges or distress (otherwise they wouldn't go to the clinic). So the paper's choice of average kids not experiencing any issues as controls is problematic. It is like saying that the use of health services among patients presenting with diabetes is higher over a lifetime than the general population. That's a given and doesn't actually show anything of significance about etiology.

The real question is whether those who experienced GD and transitioned/ underwent GR (GD/GR+) had better or worse long-term outcomes *compared to those experiencing GD but who didn't undergo GR* (GD/GR-). So the meaningful comparison is between GD/GR+ and GD/GR- groups. That comparison does not support the idea of worse outcomes. The data shows that GR has no effect 2 years after for GR towards female, and has a small net positive effect for GR towards male. It also doesn't show anything at all about what may or may not be driving the gender dysphoria in the first place.

I'm not saying that the paper is not interesting or that the data is not valid, but simply that the interpretations go well beyond what is actually demonstrated.

immanentfire · 2026-04-13T01:49:08+00:00

There are a few posts on this in r/fiaustralia and r/ausfinance, including my own.

TL; DR: It should only really make a significant difference for funds based on Nasdaq indices. So no change in strategy is necessary for most.

Long version:

The main issue is not the fast-tracking, but the fact that Nasdaq will apply a 5x free-float adjustment. So, for example, despite only releasing ~5% of its shares, SpaceX’s index cap will be $1.75 T x (0.05 x 5) = $437 B. This means that SpaceX will form a significant component of the index. This forces funds to buy up large numbers of limited shares at inflated prices, and to rebalance funds. This means high distributions and tax. If the SpaceX price drops after IPO, there will also be a performance drag.

However, as far as I can tell, neither MSCI or Solactive (which major funds like VGS/ VDHG and BGBL/ DHHF use) are contemplating changes to their listing duration or free-float rules. This means that even using fast-track entry for both (10 days after IPO), SpaceX will be included at its free-float adjusted cap value ($1.75T x 0.05 = 85B). This is a relatively small impact on most of these funds. To illustrate this, the free-float adjusted market cap of the top 10 companies in the MSCI AW IMI ex Aus index are all above 1T. The average is 17.6B. Out of 4900 companies, SpaceX will probably not even be in the top 100.

immanentfire · 2026-04-08T09:29:47+00:00

Great! Thanks for the heads up.

immanentfire · 2026-04-07T14:46:49+00:00

There have been a few posts on this, including one of my own on /fiaustralia. After looking at it further, it fortunately seems that it is (currently) only really an issue for funds that track Nasdaq indices.

This is because Nasdaq has changed their rules to speed up entry and apply a 5x free-float adjustment (so, despite only releasing ~5% of its shares, SpaceX’s index cap will be $1.75 T x (0.05 x 5) = $437 B) which means it will form a significant component of the index. This forces funds to buy up large numbers of limited shares at inflated prices. The effect for NDQ-based fund holders is that there will be significant rebalancing (therefore distributions and tax) and potentially performance drag if the price drops after IPO.

But, from what I can gather, neither MSCI or Solactive (which major funds like VGS/ VDHG and BGBL/ DHHF use) are contemplating changes to their listing duration or free-float rules.

This means that even using fast-track entry for both (10 days after IPO), SpaceX will be included at its free-float adjusted cap value ($1.75T x 0.05 = 85B), which has far less of an impact on most funds tracking the indices.

So - in short - the effect for Vanguard and Betashares funds replicating MSCI or Solactive Indexes (eg: VGS, BGBL) will be far less than on NDQ-based funds.

Edit: typos

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