7 Tips for Protecting Your Finances From Inflation
Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,495,064 (-0.25%)       Melbourne $937,672 (-0.06%)       Brisbane $829,077 (+1.01%)       Adelaide $784,986 (+0.98%)       Perth $687,232 (+0.62%)       Hobart $742,247 (+0.62%)       Darwin $658,823 (-0.42%)       Canberra $913,571 (-1.30%)       National $951,937 (-0.08%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $713,690 (+0.15%)       Melbourne $474,891 (-0.09%)       Brisbane $455,596 (-0.07%)       Adelaide $373,446 (-0.09%)       Perth $378,534 (-0.83%)       Hobart $528,024 (-1.62%)       Darwin $340,851 (-0.88%)       Canberra $481,048 (+0.72%)       National $494,274 (-0.23%)   National $494,274                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 7,982 (-85)       Melbourne 11,651 (-298)       Brisbane 8,504 (-39)       Adelaide 2,544 (-39)       Perth 7,486 (-186)       Hobart 1,075 (-37)       Darwin 266 (+11)       Canberra 840 (-4)       National 40,348 (-677)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 7,376 (-100)       Melbourne 6,556 (-154)       Brisbane 1,783 (+12)       Adelaide 447 (+11)       Perth 2,139 (+3)       Hobart 173 (-1)       Darwin 393 (+1)       Canberra 540 (-29)       National 19,407 (-257)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $750 ($0)       Melbourne $550 ($0)       Brisbane $650 ($0)       Adelaide $550 ($0)       Perth $595 ($0)       Hobart $550 ($0)       Darwin $720 (+$40)       Canberra $675 ($0)       National $639 (+$6)                    UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $750 ($0)       Melbourne $550 ($0)       Brisbane $550 ($0)       Adelaide $430 ($0)       Perth $550 ($0)       Hobart $450 ($0)       Darwin $483 (-$38)       Canberra $550 ($0)       National $555 (-$4)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,759 (+74)       Melbourne 5,228 (-159)       Brisbane 2,940 (-7)       Adelaide 1,162 (-13)       Perth 1,879 (-7)       Hobart 468 (-15)       Darwin 81 (+6)       Canberra 707 (+10)       National 18,224 (-111)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 8,359 (+95)       Melbourne 5,185 (+60)       Brisbane 1,588 (-3)       Adelaide 335 (-30)       Perth 752 (+11)       Hobart 161 (-1)       Darwin 107 (-16)       Canberra 627 (-36)       National 17,114 (+80)   National 17,114                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.61% (↑)      Melbourne 3.05% (↑)      Brisbane 4.08% (↑)        Adelaide 3.64% (↓)       Perth 4.50% (↓)     Hobart 3.85% (↑)        Darwin 5.68% (↓)     Canberra 3.84% (↑)      National 3.49% (↑)             UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.46% (↑)      Melbourne 6.02% (↑)      Brisbane 6.28% (↑)        Adelaide 5.99% (↓)     Perth 7.56% (↑)        Hobart 4.43% (↓)       Darwin 7.36% (↓)     Canberra 5.95% (↑)        National 5.84% (↓)            HOUSE RENTAL VACANCY RATES AND TREND       Sydney 1.6% (↑)      Melbourne 1.8% (↑)      Brisbane 0.5% (↑)      Adelaide 0.5% (↑)      Perth 1.0% (↑)      Hobart 0.9% (↑)      Darwin 1.1% (↑)      Canberra 0.5% (↑)      National 1.2% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 2.3% (↑)      Melbourne 2.8% (↑)      Brisbane 1.2% (↑)      Adelaide 0.7% (↑)      Perth 1.3% (↑)      Hobart 1.4% (↑)      Darwin 1.3% (↑)      Canberra 1.3% (↑)      National 2.1% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND       Sydney 30.9 (↑)      Melbourne 32.6 (↑)      Brisbane 37.7 (↑)      Adelaide 28.7 (↑)      Perth 40.1 (↑)      Hobart 37.6 (↑)        Darwin 36.1 (↓)     Canberra 33.0 (↑)      National 34.6 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND       Sydney 32.5 (↑)      Melbourne 31.7 (↑)      Brisbane 35.2 (↑)      Adelaide 30.2 (↑)        Perth 42.8 (↓)     Hobart 36.9 (↑)        Darwin 39.6 (↓)     Canberra 36.7 (↑)      National 35.7 (↑)            
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7 Tips for Protecting Your Finances From Inflation

Advisors tell savers to adjust their personal-finance strategies to preserve purchasing power.

By Nick Fortuna
Mon, Nov 29, 2021 11:13amGrey Clock 4 min

Is it just a passing phase or here to stay? That’s the question facing consumers who are seeing their purchasing power erode.

There are some steps you can take to protect your finances no matter which way it breaks. Consider buying equities like bank stocks or consumer goods companies that perform well in inflationary periods. Don’t pay off that mortgage early—if we are indeed in an era of sharply rising prices and wages, you’re better off paying it off over time with watered-down dollars. Beware of bonds. If rates rise sharply, their principal value will take a hit.

Economists are split on how long the high inflation will last. Some argue that supply-chain issues caused by the Covid-19 pandemic are temporarily hiking prices, while others say that rising labour costs will result in elevated prices for years.

“That’s obviously the million-dollar question right now,” said Bryan Pinsky, president of individual retirement at AIG Life and Retirement. “There definitely are two camps out there, and there are things going on in the economy that would make you lean one way or the other.”

The Consumer Price Index, which tracks prices for a broad range of products such as gasoline, healthcare, and groceries, rose 6.2% in October from the same month in 2020, the biggest spike since December 1990, according to the Labor Department.

Bruce Brugler, managing director at Tiedemann Advisors, said that in an inflationary environment, “cash is trash” since dollars lose value over time. The problem is that the stock market and real estate have risen sharply in recent months, so investors will have to be more discriminating to find value.

Nevertheless, advisors say there are ways for savers to adjust their investment and personal-finance strategies to preserve their purchasing power. Here are seven tips for living in an inflationary period.

Identify stocks that will benefit from higher inflation or higher interest rates. Banking, consumer staples, energy, utility, and healthcare equities are likely to perform well, says investment advisor Brian Stivers.

Banks would come out ahead if the Federal Reserve eventually raises interest rates to combat inflation, and banks’ spreads between loans and deposits widen. Meanwhile, companies that produce essential consumer goods typically are able to pass on their higher costs to consumers.

Conversely, automotive and housing companies will get stung by rising interest rates that lift borrowing costs for customers. That makes them riskier investments just now.

“I’m a big fan in times like these of sector investing, and that can be done either in individual stocks or with exchange-traded funds,” Stivers said.

Rob Williams, managing director of financial planning and retirement income at the Schwab Center for Financial Research, said International stocks will appeal to investors who are concerned that the dollar will be weakened by inflation.

Shy away from fixed income. If rates climb, then certificates of deposit, fixed annuities, bonds, and bond funds purchased today will look less attractive in the future.

“If the Fed does raise rates, I would be careful about buying any new bonds and probably would wait on the sidelines until those rates start moving up,” Stivers said. “However, there are still some long-term bonds where people are getting yields of 3% or 4%, and you want to hold on to those.”

Similarly, buying a lifetime income annuity is less enticing in an inflationary environment. The monthly check you get for the rest of your life will lose value more quickly with high inflation.

Pinsky, of AIG Life and Retirement, said investors are opting for shorter-duration fixed annuities and equity-indexed annuities, which are tied to the performance of a stock index such as the S&P 500. Equity-indexed annuities provide principal protection for investors with a low-risk tolerance, he added.

Treasury inflation-protected securities, or TIPS, are another option for savers seeking low-risk investments, according to Matt Nadeau, of Piershale Financial Group. With TIPS, the principal increases with inflation as measured by the CPI.

Keep the right sort of debt. Homeowners carrying fixed mortgages with low interest rates are sitting pretty right. If you haven’t already done so, refinancing to lock in low rates is a good idea. If inflation takes off, homes prices are likely to climb and your fixed monthly payment may appear like a real bargain in a few years.

Credit-card debt, on the other hand, is particularly bad in a rising-rate environment. It’s floating-rate debt, and your monthly payments will go up.

Consider commodities. Investing in oil, natural gas, wheat and corn may be good hedges against inflation, said Matt Nadeau, of Piershale Financial Group.

He said ETFs such as the FlexShares Morningstar Global Upstream Natural Resources Index Fund (ticker: GUNR) and the SPDR S&P Global Natural Resources ETF (GNR) give investors a “broad-based opportunity” to take advantage of rising commodities prices, including energy, precious metals and agriculture.

Look for companies that benefit from rising labour costs. Brugler, of Tiedemann Advisors, said energy-service companies and technology companies aimed at reducing businesses’ labour needs might be interesting investments due to high inflation rates.

As an example, he pointed to Toast (ticker: TOST), a cloud-based software company providing a restaurant-management and point-of-sale system built on the Android operating system. As restaurants struggle to recruit and retain workers and are forced to raise wages, technology companies aimed at reducing head count should benefit, Brugler said.

“Think about the sources of inflation, and then identify which companies are helping other companies alleviate that cost pain by providing them with solutions,” he said.

Pull the trigger on essential purchases and charitable giving. If consumers expect to spend money on home goods, renovations, car repairs, or other products and services, they might be better off doing so now, before prices climb even higher, according to Brugler, of Tiedemann Advisors.

Charities also are likely to face higher prices for goods and services in the future.

“To the degree that you’d like your charitable dollars to accomplish something, putting it in the hands of that charity now also makes sense,” he said. “A $1,000 gift today is more valuable to that charity than a $1,000 gift several years from now.”

Brace for rising health costs. Health costs have risen faster than inflation for years. The pandemic, which is driving some health professionals out of the field, could accelerate that trend.

Stivers, of Stivers Financial Services, recommends increasing contributions to health savings accounts, if possible. Workers enrolled in high-deductible health insurance plans typically are eligible for HSAs, which allow savers to set aside money on a pretax basis to pay for qualified medical expenses. Investment gains within HSAs aren’t taxed.



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Competitive pressure and creativity have made Chinese-designed and -built electric cars formidable competitors

By GREG IP
Thu, Jun 8, 2023 4 min

China rocked the auto world twice this year. First, its electric vehicles stunned Western rivals at the Shanghai auto show with their quality, features and price. Then came reports that in the first quarter of 2023 it dethroned Japan as the world’s largest auto exporter.

How is China in contention to lead the world’s most lucrative and prestigious consumer goods market, one long dominated by American, European, Japanese and South Korean nameplates? The answer is a unique combination of industrial policy, protectionism and homegrown competitive dynamism. Western policy makers and business leaders are better prepared for the first two than the third.

Start with industrial policy—the use of government resources to help favoured sectors. China has practiced industrial policy for decades. While it’s finding increased favour even in the U.S., the concept remains controversial. Governments have a poor record of identifying winning technologies and often end up subsidising inferior and wasteful capacity, including in China.

But in the case of EVs, Chinese industrial policy had a couple of things going for it. First, governments around the world saw climate change as an enduring threat that would require decade-long interventions to transition away from fossil fuels. China bet correctly that in transportation, the transition would favour electric vehicles.

In 2009, China started handing out generous subsidies to buyers of EVs. Public procurement of taxis and buses was targeted to electric vehicles, rechargers were subsidised, and provincial governments stumped up capital for lithium mining and refining for EV batteries. In 2020 NIO, at the time an aspiring challenger to Tesla, avoided bankruptcy thanks to a government-led bailout.

While industrial policy guaranteed a demand for EVs, protectionism ensured those EVs would be made in China, by Chinese companies. To qualify for subsidies, cars had to be domestically made, although foreign brands did qualify. They also had to have batteries made by Chinese companies, giving Chinese national champions like Contemporary Amperex Technology and BYD an advantage over then-market leaders from Japan and South Korea.

To sell in China, foreign automakers had to abide by conditions intended to upgrade the local industry’s skills. State-owned Guangzhou Automobile Group developed the manufacturing know-how necessary to become a player in EVs thanks to joint ventures with Toyota and Honda, said Gregor Sebastian, an analyst at Germany’s Mercator Institute for China Studies.

Despite all that government support, sales of EVs remained weak until 2019, when China let Tesla open a wholly owned factory in Shanghai. “It took this catalyst…to boost interest and increase the level of competitiveness of the local Chinese makers,” said Tu Le, managing director of Sino Auto Insights, a research service specialising in the Chinese auto industry.

Back in 2011 Pony Ma, the founder of Tencent, explained what set Chinese capitalism apart from its American counterpart. “In America, when you bring an idea to market you usually have several months before competition pops up, allowing you to capture significant market share,” he said, according to Fast Company, a technology magazine. “In China, you can have hundreds of competitors within the first hours of going live. Ideas are not important in China—execution is.”

Thanks to that competition and focus on execution, the EV industry went from a niche industrial-policy project to a sprawling ecosystem of predominantly private companies. Much of this happened below the Western radar while China was cut off from the world because of Covid-19 restrictions.

When Western auto executives flew in for April’s Shanghai auto show, “they saw a sea of green plates, a sea of Chinese brands,” said Le, referring to the green license plates assigned to clean-energy vehicles in China. “They hear the sounds of the door closing, sit inside and look at the quality of the materials, the fabric or the plastic on the console, that’s the other holy s— moment—they’ve caught up to us.”

Manufacturers of gasoline cars are product-oriented, whereas EV manufacturers, like tech companies, are user-oriented, Le said. Chinese EVs feature at least two, often three, display screens, one suitable for watching movies from the back seat, multiple lidars (laser-based sensors) for driver assistance, and even a microphone for karaoke (quickly copied by Tesla). Meanwhile, Chinese suppliers such as CATL have gone from laggard to leader.

Chinese dominance of EVs isn’t preordained. The low barriers to entry exploited by Chinese brands also open the door to future non-Chinese competitors. Nor does China’s success in EVs necessarily translate to other sectors where industrial policy matters less and creativity, privacy and deeply woven technological capability—such as software, cloud computing and semiconductors—matter more.

Still, the threat to Western auto market share posed by Chinese EVs is one for which Western policy makers have no obvious answer. “You can shut off your own market and to a certain extent that will shield production for your domestic needs,” said Sebastian. “The question really is, what are you going to do for the global south, countries that are still very happily trading with China?”

Western companies themselves are likely to respond by deepening their presence in China—not to sell cars, but for proximity to the most sophisticated customers and suppliers. Jörg Wuttke, the past president of the European Union Chamber of Commerce in China, calls China a “fitness centre.” Even as conditions there become steadily more difficult, Western multinationals “have to be there. It keeps you fit.”

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