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Recent Questions & Answers

Glenworth Mortgage Insurance: Buy or Avoid?

Paul Rickard

Recently, GMA’s price has been smashed from a high of AUD$3.50 to the current AUD$2.90 today; various factors like increased likelihood of mortgage distress, etc contributing to the lower than anticipated bottom line.

Compared to other popular peers like CVO (covermore), it’s P/E ratio looks tantalizing, it’s dividend yield is fantastic (8.6% if it holds at around AUD$2.80 to AUD$3 bucks) and the EPS is still relatively strong at 30.1 cents.

What are your thoughts?
Oversold on fears?
Market moving to other peers?

Or, perhaps, if one holds a contrarian view, time to dip in and buy some?

Your thoughts,

Kind regards


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The future growth of CGF

Paul Rickard

I am keen to understand the factors that have driven CGF’s spectacular hockey stick growth in share price post-GFC, where it was at AUD$0.87, to its spectacular rise between 2012 and 2017, from AUD$5 to AUD$11.

What could possibly drive the growth/appreciation in share price of Challenger Growth Fund (CGF)?

Do you think in the current/short term low interest rate environment, this growth could possible still have legs? Or, would it be a Domino Pizza, Blackmore or REA story, where too much growth, and shifting of assets results in share price tumble?

Kind Regards


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SMSFs whilst living abroad

Paul Rickard

My wife and I are considering living abroad in either Vietnam or Cambodia, for a period of anywhere from a few months to a couple of years.

Am I permitted to do this with an ongoing SMSF?


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Mantra

Paul Rickard

I currently have a paper loss of about 20% on Mantra. I have been caught before selling out of shares only to later see them recover.

What is your view on Mantra?


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Pension funds and SMSFs

Paul Rickard

My husband aged 62 and I (aged 58) both have TTRP and I cannot see the benefit of keeping them now. We both still work, and whilst I have the option to retire, I see no benefit now until I can withdraw a pension tax free when I’m 60. We both salary sacrifice to the max and don’t require the income from the pension. I have been ‘recycling’ both pensions as non-concessional contributions to decrease tax paid by beneficiaries of our estate. I became eligible for a defined benefits pension prior to age 55 because of a major health condition, which was unexpectedly cured, but that pension continued. When I got well again, I began part time work in a different field. Now my SMSF and QSuper balances would be in excess of $1.6 million. I will seek professional advice but want to be clear on a few things before my appointment.

  1. If I cancel our pensions in SMSF to revert to Accumulation- will the taxed and non-taxed components be decided when we begin pensions in the future?
  2. Am I correct in thinking I can withdraw $180000 – untaxed – from one of my super funds, which I could contribute to my husband’s Super to balance our amounts?
  3. Also we have a property which has not recovered its price since the GFC downfall, so we want to keep its actual cost base and not take up the option to redistribute capital bases.
  4. I’m already over $1.6m and see no benefit for me to have a pension until I’m 60. Am I correct in thinking that if I delay setting up the pension until 2018 the amount allowed in pension phase could actually be a little in excess of $1.6m anyway? And my husband wouldn’t be locked into that figure either even though his balance is not that high?
  5. Simply if we don’t need the pension income is there any advantage at all to continuing TTRP.

Thank you for your advice.


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