The Reserve Bank this morning lifted the official cash rate by 0.25 percentage points to 6.75 per cent - the first time it has moved rates during an election campaign.

At a press conference this morning, Mr Howard acknowledged the “hurt” the rate hike would cause borrowers.

AAP reports: Mr Howard said the rise - the sixth since the 2004 election - would hurt a lot of people.

The increase will add $67 a month to repayments on a $400,000 loan, bringing to $395 the cumulative impact of six interest rate rises since the last election, when the Coalition campaigned on a promise to keep rates low.

Some quotes on “Stock Markets”:

1. Markets are voting machines in the short term and weighing machines in the long term.

2. Market is a place where people with experience meet people with money. Money goes to people with experience and experience goes to people with money.

3. In every trade, one is wrong.

Stock  Trading  Earnings for whom ?

when new comers/ beginners enter markets for the first time, in this age of internet, people tend to TRADE , than to INVEST
as in the older days. This is because now we are racing against time. Fast , Speed, quick etc are buzzwords.

So  years   reduced  to months, months  reduced to weeks  so on..

Observe who makes money  when you trade, when you are a beginner:

1. When you trade  about 10  trades a day, you are working for your broker, at your risk and at no salary.

2. When you trade  5  trades a day, you  are working for your broker and also for you, of course at your risk.

3. When you trade 1 or 2  trades a day, you are working for you  and paying your broker his due commission.

So  decide for whom you want to work, for your broker  or for you really.

Assumptions:

1. no of trades mentioned above are  just for an idea, the objective is you should earn more than your broker.
2. As an amateur loses money in trading. This does not apply for a pro.

Daily Telegraph have a cool Property Guide Tool, and Comparison tool for the suburbs in Sydney in 2007, supplied by Residex. You will be able to get median prices.
But Residex’s Edwards warns that you should treat median prices with caution.

“Medians are subject to the amount and quality of the data collected,” says Edwards. “If you do not collect everything across all the markets then your answer will be skewed and won’t give you the overall picture.”

Here is the link for the guide,
http://services.news.com.au/dailytelegraph/property/guide.do

Go for house or flat which you can really afford  or manage the debt.

We normally  put it this way,

Debt to Equity Ratio: (DE Ratio, a financial ratio, popularly used by pros in assessing a company  or  a person ), I mean the debt we can really manage and  our actual networth today.

My advice is  not to over invest.
If  investment is also your  motto, there are lot of ways for investing such as by investing in markets,  a part of our earnings.

That way we can get best of the both worlds.

There is an article today in Sydney Morning Herald

http://www.domain.com.au/Public/Article.aspx?id=1192300831878&index=NationalIndex&headline=Does%20renting%20make%20more%20sense?&s_rid=smh:Homepage

Does renting make more sense? asks Author David Koch

in response to that, another opinion:

—————-

He wrote the article on number of assumptions

1. He assumed everyone , who are well aware of markets.
2. He assumed forced saving is wastage and inefficient way of investment. But he ignored liquid money with us, makes us spend thrift, and we easily spend them.
3. He assumed “markets give higher returns all the ltime like this year”, which normally not so. yes this year, markets world over fared extremely well. and relaity much more.

So I suggest to go for buying a flat or house.

some people’s mentality isquite diff from the west or advanced countries in these matters:

1. We normally fear debt, selling our future time for the present needs
2. we feel a sense of security, when owned a house or property. That sense of security can never be had by any other means. Try and let me know if you find one.

3. We can not forecast how reality prices will be after 20 yrs, even best of the best economists also.

4. Money can be produced by printing, not land or realestate. Quantum of money is going up every year, where as land is SHRINKING.
this is my single most point, for my advice and proposal.

Beginners in swimming who have to practice in swimming pools, which offer varied LEVELs,  are venturing directly in turbulent oceans, without knowing the real dangers of it.

Nonethless, they are great, once you master it.

So best advice is to master “patientence, perseverance, keen observation  etc”  which are very very imp  for success in markets

1. Understand “brokerage load” how much it costs, for delivery.
2. Never expect instant gains, or daytrade, though people do talk more about this. this is a loser game designed by pros in the long run
3. Do observe recommendations by brokerages locally in the media.
4. wait until you are comfortable.

“ONE SHOULD INVEST IN STOCKS, WHEN THEY ARE AT LOW, NOT WHEN WE HAVE MONEY”

Means keep the money idle in a bank, until the opposite comes.

Also there is a one more “POPULAR” and proven way of investing, called “SIP” systematic invesment plan, for people like you, offered by mutual funds, like fidelity, templeton, merril lynch etc. have a search in Google.