Rates go up again

[Risto the Great]

Risto, In your opinion whats the best way to beat these interest rate hikes? Rogi mentioned investing in properties however thats a bit too expensive whos got $650k to spare with interest rates rising?

Prolet, look for growing population areas with good industry around them. Property does not have to be in the CBD to rise in value. Of course, buying property with a view to gain tax benefits from negative gearing relies on the assumption you have an income in at least the marginal tax rate of 31.5%.

Interest rates are still low. You have to assess each property on its own merits. If you have specifics to discuss, we can play with some numbers if you like.

[Daniel]

That said though, it all does depend on whether the recommendations of the ACCC are followed and legislation is drafted and enacted to prevent all this collusion.

Do you really believe that the banks are colluding though, are they not just doing what all oligopolist organisations do, follow the leader?

[Buktop]

I would watch out for the next 2 quarters, if they keep raising interest at this rate your inflation will skyrocket.

I would suggest being cautious of a secondary slowdown. As we saw recently, Dubai is latest to be hit by a debt crisis, and this alone sent their stock indexes plummeting.

My only advice is to be cautious, just because we started to recover, doesn't mean that it's smooth sailing from here on. The US Federal Reserve is still reluctant to increase Interest Rates. You should have the resources to properly leverage investments (balance debt and equity) before taking a risk on overextending yourself. I am more of a conservative investor myself.

[Prolet]

Risto, Im not sure if you know the property market in Melbourne but it costs an arm and a leg to buy even a tool shed.

Buktop, We're not out of the woods yet, with the rise of interest rates means the rise of the Aussie dollar. The 3 out of the 4 greedy banks have already raised 50% more then the reserve bank with the Commonwealth Bank and ANZ following suit.

[Risto the Great]

Prolet, I reckon there are some bargains in the CBD in Melbourne.
I saw some 2 storey terrace type places in Carlton that would sell for $400,000 more in Adelaide. It's only money!