CBA "warns on property" for private clients

Gotti: CBA warns on property for private clients - MacroBusiness

According to this, CBA is warning its private clients about investing in property.

 

"To protect the portfolio from this form of left-tail risk (meaning a low probability, high impact outcome) we are moving to a more substantial underweight to property, across both direct property (commercial real estate) and REITs (real estate investment trusts), and allocating that capital towards fixed income (defensive assets)."

 

Given their history, I would not be taking investment advice from a bank (any bank).

 

Given there's only one market in Australia ( or Outer Greater Sydney as it should be known ...) , their advice might be appropriate .

However if you take some of the outer districts into consideration , they might be wrong

Though given it's reported on Macrobusiness , it must be true

(BTW , what do people think is the best Emo to indicate sarcasm ... )

Cliff

 

What are people's views on macrobusiness?

 

Load of permabears . I used to read it when I was naïve , but don't waste my time anymore because everything is coloured by their view on the world . Never seen anything there that's changed my mind .

Cliff

 

"…CBA concludes: “And thus we wonder, when was the last time we grew without a market that is, by definition, devoid of over-exuberance? What would GDP growth have looked like without an unsustainable mining boom? What would growth have looked like without the over exuberant housing market? How do we engineer a broad-based recovery, rather than an economy that fires for a period of time on just one or two cylinders?"

I've been sayin' this for about 3 years at least, now - and getting flamed for it every step..

Macrobusiness might be permabears, but they are only quoting CBA comments in this instance...when CBA say it; you'd be more worried.

I wouldn't let this sort of comment stop me from doing anything; but it should make everyone be more wary.

In a real estate sense; we have seen with Sydney this year that it has made no difference.

But; in an economy and jobs sense; worth being a bit more cautious. No-one's job is carved in stone anymore.

 

Would have been good if you posted those question a few months ago,i would have asked the
board of directors at the banks recent AGM,s,when question time comes around because most times everyone just sits there waiting for it too end and get back into the food and drinks..

But several did say from their risk management departments ,next year there are several heads winds they face in a several area,or as one tells me every year just understand the power of ten works both way..

 

But if I'd listened , got worried and got out of the market three years ago , I would have missed out on the Sydney boom ....

True , but they only seem to quote the articles that support their view .

Comparing it with the lets hype Sydney thread . I was honest up front it was a hype thread .

They selectively cherry pick negative articles and then try to pretend it's a balanced economic web site ...

All sensible observations .

Cliff

 

Me neither. And I worked at banks most of my (albeit short) working life.

 

MB is all right they are quite negative on most things. I feel mostly they are trying to work on the excessive borrowings and price growth in the property sector. Which to a large degree is true.

Like Bayview says its just information and what you do with it is up to you.

 

Aren't CBA in the business of renting money? This sounds like they are spooking the horses.

Maybe they should investigate (mum and pop) margin loans on US Govt Bonds... or just cut the rates on deposit accounts to shore up the balance sheet, like some of their competitors

 

CBA? All I can think of is their fraud scandal. If they pay up then investors can use the funds as a deposit on an IP.

 

It's a bit rough on your arse, but does the job. Flush twice.

 

They never said nothing about this at the last AGM,but i may have missed that part as they just kept bringing the food and drinks out,not sure what happened after that..

 

There are food and drinks at AGMs? I might have to start attending.

 

They didn't bring it up eh? Well I suppose it's like going to family gathering. The black sheep of the family are rarely mentioned.

 

Time to pile in then...

 

Hows HK looking Omni?

 

I think if you are managing your debt then there should be no need to worry.

Of course times are changing you would have to be an absolute fool not to realise this, and our economy is not looking too crash hot at the moment.

Does not mean you stop buying but like everything risk vs reward and protect what you have made, I always say this because I know investors who have lost money because they purchased at peak and took on too much debt.

I know most investors already know this, I just don't believe we should sweep it under the rug either, markets do turn, and half the time you don't even realise its happened, its that quick.

Happy investing everyone

MTR