QAV 547 CLUB
Fri, Dec 02, 2022 10:54AM • 1:05:57
Welcome to QAV. This is episode 547. We’re recording Tuesday the 29th of November, 2:14pm Brisbane time, 3:14pm Sydney time — where you are presently, but the heading back to Cape Schanck this week. Is that right, Tony?
Yeah, correct. Via Melbourne. Gonna play some golf in a charity event.
Oh, lovely. Well, it’s been a crazy old week in the stock market, Tony. Stock markets been up, had a good couple of weeks, and then it’s sort of crashed this morning. It went backwards yesterday and down this morning, and now back up this afternoon. I don’t know what’s going on out there today, why its bounced back up today. Do you? Visual joke from Tony there. Ah, you had to see that one to get it.
No, I don’t sorry. And nor do I care, it’s just the way the market works. It just goes up and down.
Well, speaking of up and down: somebody, I think it was one of our club members, Stephen, asked me the other day if I had a spreadsheet of your historical returns. I don’t have a spreadsheet of the full list, but you have sent me a partial list before which I sent to him. We’ve talked about it on the show before but I thought it was a good time to revisit it, because I think it’s a good reminder for people that even the great Tony Kynaston has his bad years as well as his good years. And that’s how investing works, right? There are bad years, there are good years, and it all balances out over the long haul. The good years outweigh the bad years, but there are always bad years.
Absolutely. And this isn’t, like, as bad as it gets, by the way. This is pretty tame in the history of the stock market.
Yeah. So, I’ve got your annual numbers going back to FY08, but obviously you have numbers that go way back before that. But I think from memory, it’s a bit hard for you to track your numbers going back prior to the GFC or something?
Oh no, I’ve got some there. It gets murkier and murkier the further back I go, because of poor record keeping on my path, and mixing money for, you know, other things like buying houses, etc.
You didn’t know back then that one day you’d be doing a podcast about this, and people would want to know?
Oh, yeah, yeah, I had crystal balls back then, and I thought, “I need to invest in podcasting.”
Well, the numbers that I’ve got from, just for people’s interest, FY08. This is the first year of the GFC: -19.9%.
Let me stop you there. I’ll go back a few years before that, because I’m pretty sure one listener is going to plug all these numbers in and work out the CAGR for it. So, going back five years prior to that: 10% up.
What year is that? ’03?
Oh, I don’t have those numbers in front of me, sorry. So, probably, yeah. Financial year ’03. Up 10%. Next year up 98%. So huge year, then.
The following year up 35%.
38.4, up 41.4 up. Then what you’ve got in that list, so minus 19.9. So, nearly -20, -31. So, you can see in the lead up to the GFC some really stellar returns, and then about half given back in the GFC. But then the following year after the GFC up 111.5%. So, big kick out of the GFC.
111.5 or 115?
115, you’re right, sorry. Yep, my typo, I’m sorry: 115. The year after that, up 32. Then 0.8, 39%, 6.5%, 6.6%, 14.3%, 12.4%, 1.2%, -10%, 14.2%, and FY21 19.4%, and then FY22, the year just gone, down 17. So, a dip there. What changed in FY22 for us as a family, is Jenny stopped working full time and we stopped living off her wage, and so I’m paying the mortgage and living off dividends, which is taking probably $800,000-$1 million out of the portfolio. So, it’s affecting performance. Because these numbers are after tax, or after costs, and I haven’t gone back and tried to break apart what’s what and add it before cost position, but that’s how it is. So, before someone does all the CAGR calculations, I’ve done it. So, all those numbers, if I plug them into Excel, get to 16% as the CAGR over that time period. But if I take out that last year, it’s actually 19% over that time period. I may have to, sort of, break things up from now on if we will continue to have to live off the dividends and pay the mortgage and all that rather than reinvest it, or have the dividends cover the mortgage payments. So, that’s something I’ll work out in time.
Just send Jenny back to work, Tony, what are you doing?
Well, that’s the easiest one. I mean, there’s a vacancy at Bank of Queensland now, apparently, so…
Can’t talk about that. But yeah.
Can’t about that, yeah. Don’t mention the war.
But yeah, just tell Jenny, you know, she has an obligation to the podcast that she goes back to work, because it’s just making things too confusing for your bookkeeping.
Well, the longer-term plan is to sell this place and pay off the mortgage and then buy something cheaper and then, you know, live off the dividends and keep reinvesting. But we haven’t done that yet.
You should have done that before the real estate market crashed, Tony.
Oh, tell me about it. I wanted to. It was probably a bit too soon for us, because we want to find out where Alex settles down. I want to go and live where she’s putting roots down. Which is probably going to be Melbourne.
We thought it’d be foolish to sell this place in Sydney and move to Melbourne and then find out she gets offered a job in Sydney once she finishes studying.
She works for QAV, so she’ll work wherever we tell her to work.
That may well be the case.
You did a pulled pork on GNG a couple of weeks ago, Tony.
No, I didn’t. That was months ago.
What? No. When did you do GNG?
I don’t remember talking-it’s Grange engineering, isn’t it?
Yeah, November. You did it on episode 543 on the third of November.
Yeah. And, you know, I said to you at the time as I always do, don’t put the kibosh on it. Well, you put the kibosh on it. It took a while, took a couple of weeks before the full effects of it.
When are these CEOs gonna learn; they’ve got to pay their protection money.
Pay the protection money, yeah. Yeah, well, I had to sell that this week, GNG.
So, I told you a rule from now on: no pulled porks on stocks that I own. Check with me before you do a pulled pork.
Sorry about that. You don’t own DDH, do you?
I do. Yeah, it’s in the portfolio. It’s in the dummy portfolio.
Its today’s pulled pork.
I’ll just go sell it before you do the pulled pork.
I wanted to ask you about SKT’s consolidation. Or not talk to you about it, maybe just highlight it for listeners. So, if anyone out there happens to own SKT, they had this thing happened in the last couple of weeks where there was a capital return and some sort of a consolidation, where out of every six shares you owned you lost one. This is Sky Network by the way, for folks at home, SKT. Navexa automatically included the capital return in our results but didn’t do the consolidation, but the share price jumped. So, for a week or two there it said that SKT was up 120% for us in our portfolio, which looked good, but it wasn’t right. I checked with Navarre at Navexa, and I had to do the consolidation manually in the end, which reduced it down. It’s still been really good for the portfolio that we hold it in, one of the Light portfolios. It’s been a corker because it was like $2.40 a share, they paid out. It was crazy.
They’ve got a tonne of money thrown into it as a result. Anyway, I just wanted to let people know if you own Sky Network, just check that whatever reporting tool you’re using has got both the capital return and the consolidation in there. SGM, Tony. I added it to a portfolio this week, a light portfolio, and then you emailed and tutted. You did this thing **. Visual joke, we’re back to the same visual joke from earlier. You said, “oh, it’s iron and steel scrap”, which we had talked about, and I’d forgotten. I need a better, sort of, knowledge base of these things to go through everything you’ve said about every stock and makes sure it pops up when I come to look at it. So, it’s a scrap metal recycling company.
It used to be called Sims.
Sims. It still is.
Oh, is it? Okay, I know it changed its name.
In our buy list we weren’t tracking iron and steel scrap, so this wasn’t showing up as a commodity adjacent/commodity affiliated stock. I fixed that now, so starting from next week in the buy list iron and steel scrap are something that we will measure and will show up against SGM.
I think, from memory, when we talked about Sim — I may have even done a pulled pork on it — we decided just to use the iron ore chart for it, I thought, because the scrap has an almost one-one correlation with the iron ore chart.
I thought you said it didn’t map to iron ore. But the week we did that show Alex was too busy, didn’t do a transcript, so I didn’t have her transcript to check. I saw it was in the notes, but I didn’t know what you actually said. I might have to go back and listen to it.
Technically, you’re doing the right thing. You use the proper graph, which is the — what’s it called? The Turkish 8020? Yeah. So, that is the right graph. So, if you can be bothered putting that in the buy list, then that’s fine. But I think we did say that iron ore would be a good proxy for a final graph.
I sold it anyway, because iron and steel scrap is a Josephine or a sell, I think a Josephine, so we scrapped that and I replaced it. But yeah, it’s just another one of these sneaky ones. Like, what was that one a while back? Oh, the one that’s always going out of business? SGD or SDG, I think.
Oh, Sunland Group, yeah.
There’re all these ones that I have to flag somewhere in the buy list, and I’m developing systems to remind myself of that, but it’s just too complicated. There’re too many things going on. Speaking of things going on, Warren Buffett just donated $750 million to his children’s various charitable endeavours on Thanksgiving Eve. He said, “this is the ultimate endorsement in my kids, and it’s the ultimate statement that my kids don’t want to be dynastically wealthy.”
They just want to be wealthy.
Yeah, but who doesn’t want to be “dynastically” wealthy? I want to be dynastically wealthy.
I think the kids are pretty wealthy, but they just don’t want to manage hundreds of billions of dollars, I guess.
No, the kids are pretty good. They’re pretty even headed. One’s a farmer, one’s a composer of music for movies, and I think the daughter is pretty heavily into welfare issues and welfare causes. So, yeah, no, the kids are pretty level-headed. But they all get, I mean, they’re all still rich. What Buffett’s doing is fantastic, and I don’t want to make light of it, but the kids are well off.
I thought I read years ago that he said his kids weren’t getting any of his money.
I think the classic line was, “I don’t want to give them too much so they don’t have to work, but I want to give them enough so they don’t have to work hard,” or something like that. They all got money along the way, and I think that may have bought Buffett junior’s farm, and all that kind of stuff. And I think from time to time, you know, he says that, and then you’ll see… I can certainly remember one year he gave them all 10 million bucks. So, you know, he’s given them money along the way. And I wouldn’t be surprised if they also get paid by these funds that he’s donating to. But be that as it may, yeah, they’re not getting $100 billion each out of the Buffett fortune, he’s giving it away. So, it’s a good cause.
Well, there you go. $750 million. Apparently, this is the first year in a long time he didn’t give any to the Bill and Melinda Gates Foundation.
Why is that Cam?
Well, they’ve had a few issues, a few challenges in the last year. I don’t know if you’ve noticed.
A few PR issues.
Yeah. The RBA has been taking a lot of heat, Tony.
Not all of it’s your fault.
You’ve been sticking the boot into the RBA.
I’m supporting the review.
Dr Lowe apparently half apologised. I saw this article in the Fin this morning by Steven Hamilton, a columnist: “Sorry you listened isn’t good enough, Dr Lowe. The most important tool of a central bank is its independence of action, which has to be earned through credibility. Over time, cracks in it can start to grow. Call me crazy, but ‘I’m sorry if people listen to what we said’ seems a rather puzzling communication strategy for an institution for which credibility is its most valuable asset. And yet, these were reserved by Governor Phillip Lowe’s exact words as he appeared before Senate estimates on Monday morning. An unprecedented admission in principle, but a specific choice of words that spoke to both Lowe’s inability to fulfil even his most basic functions, and deeper dysfunction within the central bank he leads.” Sorry if you listened to us.
Well, you know what the issue was there. I suspect this is… I don’t know what the legal situation is, but it could be potentially a start of a legal defence, too. Because central banks ever since Mario Draghi came out and said he’d do whatever it takes to keep the economies afloat during the GFC, and cut interest rates to negative back to zero, and then the banks went negative, ever since then, it’s been a core part of the central banker’s armoury to talk about what they think the economy is going to do, and try and guide it. So, what Philip Lowe did eighteen months ago, he came out and said that he reckons interest rates will be low for as far as he could see — at least the next twelve months — which meant people relied on that and went out and borrowed more money to pay for COVID inflated asset values, particularly houses. Now interest rates have risen, and so they’re being squeezed by higher interest rates on their mortgages than they thought they’d have to pay, at least in the short term. And there’s been some talk by some commentators that a class action should be raised against him for saying that. A central bank, or the head of a central bank, carries a fair bit of weight in the community. It’s not like it’s a Viagra commercial where at the end of it they go “side effects may include: leaky bowls and hair loss,” and all the rest of it like you see on the US commercials. The central banker doesn’t get up and say, “I think interest rates are going to be low for as far as I can see. *#My crystal ball’s broken.” It’s like, you know, you’re meant to rely on that person, and so he’s destroyed all of that trust and credibility and being able to influence what people do by just saying something, not changing interest rates, just saying. People follow what he says, and it’s wrong. He should apologise for it, shouldn’t do it. I mean, we had that email exchange with Steve Mabb where there was another article about how economists are bad at predicting, which is something I’m always on about. And then I sent him an article which said that the central bank, the Reserve Bank in America has four hundred PhDs on the payroll, so it gets worse. So, you cannot rely on anyone to forecast. Just get that through your heads, people: you cannot rely on forecasts, and particularly economists who forecast. Because there’s almost like this mental condition where they get to the stage where they go, “oh, I understand the stand the economy now. And that means that next week, it’s going to do this.” It’s doesn’t work that way. It’s inherently unpredictable. Just get that through your heads. And even if you have four hundred Economists with PhDs on the payroll, I reckon probably it means you’re gonna be four hundred times worse when you try and predict the future. It just can’t be done.
So, the basic rule is “don’t listen to any forecasts. don’t factor in any forecasts, just play the ball.”
Correct. Play the card that’s dealt, absolutely.
It’s a hard thing though, because, you know, like a couple of years ago when there was so much hype around BNPL stocks and crypto, it’s the same with forecasts. I mean, we’re saturated with these things in the financial media. We’re saturated with people forecasting, people predicting, people telling you this is going to happen, that’s going to happen, you got to get in and you gotta get out. It takes a certain level of fortitude, I think, to just go “nah, ignoring all of that, just gonna stick with what I’m doing. Good luck to everybody out there.”
That’s right. But it’s not just ignoring it. It’s like, you know, I grappled with trying to value BNPL stocks. I didn’t really try hard with Crypto, because I could see what it was. But I just took what I know, which is how to value things, and applied it to this new paradigm, because “this time it’s different”, and I couldn’t do it. So, I ignored it. My fortitude isn’t being strong enough to turn off that stuff, it’s being smart enough to say, “here’s the way I value an investment, and it spits out zero for this particular investment — or worse than zero — so I just ignore it.” But you’re right. I mean, it’s turning off the noise. It’s a bit like if you look at a lot of the industries in society, they’re designed to make up for some kind of personality defect that we all have, you know, the weight loss industry, the hair loss industry. We also have the “future is unpredictable” industry, but we’re going to try and sell you something which cures that problem for you. I put them all in the same camp.
Yeah. I mean, one thing that we can predict, though, to a certain degree of confidence, is that the market will recover at some point.
That’s a really good point, right? So, we’re using past experience. We read out that whole list of returns and so we’ve seen the market go up and down, we’ve seen our returns go up and down. We’re combining the fact that we’ve seen it before with the fact that we don’t expect — barring nuclear events or whatever and climate change in the next fifty or one hundred years — we don’t expect businesses to shut down on mass tomorrow. So, I expect when I wake up tomorrow, I’m still gonna look out the window and see the CBD in Sydney. David Jones is going to be there, Myer is going to be there, all the investment banks are going to be there, ANZs gonna be there, CommBank is going to be there, Qantas is going to be there, etc., and they’re still going to keep growing, they’re still going to need capital. So, my prediction isn’t that any one of those companies I just read out is going to do better than the other one, it’s that when I wake up tomorrow, they’re gonna be there. Right? That’s all I’m predicting. And it’s just like, the sun is gonna rise tomorrow. It’s been that way for hundreds of years, it’ll continue to be that way until something very drastic happens, which is unpredictable. So, I can rely on it. It’s a reliance rather than a prediction, is probably a better way of saying it. I rely on two things: that past performance indicates future performance, and that barring unforeseen cataclysmic events, the world tomorrow is going to look like the world today, in a broad sense.
But beyond that, history, and we can go back a hundred years of recorded stock market returns, history teaches us that these things go in cycles. There are good years and there are bad years, and there have always been good years and bad years, and we’re having a bad year, so therefore we think there will be a good year maybe next year, maybe the year after? But certainly.
Maybe next week.
Yeah. The market’s up since September, right? Like, I’ve been saying this for the last couple of weeks looking at the people who capitulated at the end of September, who started, you know, at the beginning of the previous September when the market was at its peak and then capitulated this September when the market was at its bottom, and then it picked up in October/November. The markets up, right.
That’s the other thing, too. Experience tells me that when people capitulate it’s probably getting close to the bottom. May not be, but again, my experience is that capitulation is a sign that things are about to get better, usually.
Unfortunately. It’s unfortunate for them, but fortunate for us. It’s just basic maths, I mean, nothing’s gonna go up in a straight line. It can’t, there’s too many inputs into the economy to make things continually go up at 10% year on year. To give you that average, and knowing that the economy is going to oscillate, and that over time it’s gonna go up, yeah, it’s got to have periods of underperformance and then periods of outperformance to catch up. It’s basic maths.
So, the bottom line is don’t listen to predictions about the economy, even when it’s coming from the RBA.
Governor of the Reserve Bank of Australia. Yes, that’s right. And we’ll put him in the class that he belongs in, which is he’s an economist.
Don’t listen to economists, don’t listen to the Liberal Party in Victoria. Don’t listen to Scott Morrison when he says, “Oh nothing to see here with all of my secret portfolios, it’s fine.” He’s getting, what are they giving, censured?
Censured. Today or soon. Yeah, big deal. As if that’s gonna hurt. It’s like the people’s front of Judea. “This will show them, we’ll pass a motion.”
Just speaking of more portfolio stuff. So, I had a chat this morning with another club member. I won’t call her Bob; I’ll call her Sally. Bob and Sally. Sally wanted to walk through her portfolio with me just to make sure she’s not doing anything obviously wrong. Now, the challenge is, well, the first thing I do with these people when they say “hey, can you have a look at this with me,” is I look at their portfolio returns over whatever period they’ve been investing with QAV, and then we’ll look at our dummy portfolio over the same period. Because my thinking is that over the same timeframe, if you’re following the rules, then our performance should be roughly similar over a set period of time, right? There’ll be some anomalies, but it should be within the ballpark. And in Sally’s case, I think, she’s only been going for about six months with QAV. I think in that six-month period, our portfolios down about 5%, but hers was down about 15%. So, I was like, “oh, that’s dramatic. We should have a look at what’s going on.” But when I was looking at her transaction history, she seemed to be doing a pretty good job selling stuff when she should have sold it, like at the 10% level, 10/11/12%. There were a couple of anomalies where she got out a bit slowly, but most of it was pretty good. But it was really tricky because — I think she was she was tracking it in Sharesight — you look at the stock, where they have the summary of the performance of each stock, and there was one, I think it was Bendigo Bank, it said she’d lost 25% on Bendigo. But when we drilled down into the transaction history, it was only about 12%, but Sharesight are annualizing that.
Ah, right. Okay.
12.5% in six months, but that’s 25% over a year. Makes it really hard to run your eyes down over a list to see where it’s going wrong. So, anyway, I asked Sally to check with Sharesight about how they’re calculating these and we’re going to have another session on it. But yeah, I mean, annualizing numbers makes it a little bit… I mean, Navexa annualise our numbers as well, but it makes it a little bit tricky for me to figure out where people might be going wrong. But I was just wondering if you had any thoughts or insights on how to do that?
I think, from memory, probably thinking of Sharesight which is the product I use, Navexa probably has a sold securities or performance report that you can probably run and get the actual buy price and sell price for a security, or buy price and current price. And then you can work out what the performance is without annualising it.
Well, that’s what I suggested to Sally. I said, “send me a full list of the transaction history and I’ll drop them into a spreadsheet and run some analysis over it.” But there was another crazy one, like GRR, I think, she had, where when I broke down the transactions, she actually made a profit on it but it was saying she lost 52%. But again, it was like if you look at it in a six-month period, I think she bought GRR in January and got a dividend in March, but her portfolio was only fully invested in May. You know, she had fifteen or twenty stocks or whatever. So, when Sharesight looks at the last six months, like six months ago GRR was riding at a massive high, it was like at its peak, and then it collapsed. So, if you look at it in just a six-month period, she lost 52%, but if you look at her transaction history with GRR going back to January, she made a profit on it. But if you just look at it from May onwards, which is what Sharesight does, if you say, “just give me my portfolio performance in the last six months,” it goes, “you lost 52% on GRR.” She didn’t, she made a profit on GRR, but some of that dividend came earlier and she bought at a lower rate. It’s really hard to get some clean numbers on these things without doing it yourself, dropping it into Excel. Anyway, I just wanted to flag that for people to be careful when you’re looking. Because I know for Sally, she was like, “oh god, that makes much more sense.” And I get caught out on it as well all the time, these annualised numbers over short timeframes, they extrapolate what that profit or loss would have been if it had continued that trend over a year when that’s not what’s happening, you know? Anyway, heads up for people out there. When you’re looking at your numbers, take into account the annualization of profits and losses.
It’s good that you’re there with your experience to be able to do a sanity check on those things, because these tools are so powerful. I’ve fallen into that trap myself using Sharesight just running a report, and going “okay, that’s doing really well” or “that’s not doing very well.” But you’ve got to drill down and work out, if that doesn’t look kosher to you, just try and work out why. Is it the reporting period, is it the way that it’s calculating CAGR, or whatever.
Speaking of portfolios, the dummy portfolio as of today since inception is up nearly 16%, 15.78, versus the STW up 7.5%. So, again, tracking well, we’re about double the index over that period of time. All things as they should be, Tony.
Good. Job done, let’s go.
What have you got on your list of things to talk about, TK?
A couple of things. So, it’s AGM season, we’ve had a few AGMs for some buy list stocks and I’ve noted that Qantas had its second upgrade in about a month. Qantas is on the buy list, and I own it, so happy days for me. Which is good, because it costs so much to fly with them, so I can see how their profits are increasing. But anyway, Qantas has had an upgrade, and I think you’ve posted on Facebook CLX had an upgrade, CTI Logistics also had an upgrade.
Boom. Boom times for people who own CLX, it’s had a great week.
Yeah, right. So, yeah, so it can’t happen at this time of the year, the companies have had enough trading now for this financial year to be able to confidently predict whether they’re going to be up or down at the end of the financial year. So, that’s good. I mentioned last week I was talking about Selfwealth and followed up about the leaving your money with them, and I said the deposit guarantee was $200,000. It’s actually $250,000 for banks in Australia. So, just a quick update on that. And lastly, I know we’re a bit light on questions this week, but I’m gonna answer a question, or just comment on a question, I heard somebody else ask on a different podcast. It was around fixed bank loan rates, and the question was about whether… So, people are rolling off their two-year fixed rates from a couple of years ago, when Philip Lowe was saying interest rates are gonna be low for a long time, and they’re trying to decide whether they need to go variable at quite a high rate or try and fix something again. I just wanted to talk generally about this decision that needs to be made, and it doesn’t just happen now, it’s a question for anyone who’s borrowing money in the housing market. But I guess my observation over the years is that, how do you know where rates are gonna go? Well, you don’t, because that’s forecasting. But when you decide whether you’re gonna go floating or fixed, you’re basically playing poker with experienced people on the other side in the banks. And so, you can’t lose sight of that. The fact that, when you take out a mortgage, there’s somebody else on the other side of that mortgage and the interest rate is set by them trying to make money, and they’ve had a lot more experience at it than you have, it just leads me to always look at where fixed rates are going. It’s a good indication of where the people who do this for a living think rates are going to go. I know it’s forecasting and all the rest, but this is, you know, they’re being risk conservative, they’re trying to keep their jobs and progress their careers. They’re in a highly competitive market, so there’s always pressure on them to lower the rates from their competitors. But anyway, if you look out along the future spectrum of rates, they’re staying reasonably flat. So, the current variable rate — I looked up the ANZ website, which is who I bank with — for a residential property where you have an LVR of at least 80% or less, so you have 20% equity in the house, the variable rate is currently quoted as 5.75. And that’s the comparison rate, 5.75%. So, that’s the one you’re meant to use to compare to other banks, because individual banks will have slightly different products and they’ll have discounts available from time to time in the market, but current variable rate 5.75%. Fixed one year rate, 5.72%. So, that says to me the bank thinks they’re gonna stay about where they are or maybe go a little bit lower than what they are, but not dramatically lower. Two-year fixed rate, 5.75%, so that’s the current variable rate. Three-year rate, 5.87%, so not much above it. Four-year rate is 6.09%. So, 0.35 above it, roughly 0.34 above it. Five-year rate goes down to 6.03, but about the same as the four year. Seven-year, 6.75%, so 1% higher than currently. And ten-year, 7.03%. So, one and a quarter percent above where it is now. So, that says to me that bankers think rates are gonna stay about where they are. And that’s interesting enough in itself, because regardless of what the central bankers say, the commercial bankers are saying, “probably no more rate increases, but probably not coming off anytime soon.” My best guide to where interest rates are going to be in, say, five years’ time, and the fixed rate at ANZ is 6.09%… Now, bear in mind, they think they’ll make money if you take out that rate, so that says to me the rates are probably going to be a little bit lower than that. So, they’ve enticed you into a fixed rate, you’re locked in for five years, and they’re making a bit of a margin on the current variable rate from there. To me, rates aren’t going anywhere at this stage. And look, who knows, but I wouldn’t lock in a fixed rate, because the bankers at the other end are saying the interest rates are gonna remain at this level. So, if you lock it in, you don’t have the flexibility of reaping any benefits if they go down. But you’re safeguarded against going up. So, it depends on your personal circumstances, too; if you’re at your absolute pain point with your mortgage, locking in for five years at the current rate might not be a bad thing for you.
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