Two truths and a lie about dividends; Safe but sorry; 3 most overvalued assets; Insane mark-ups; The life you can save

Two truths and a lie about dividends; Safe but sorry; 3 most overvalued assets; Insane mark-ups; The life you can save

By Amanda Morrall

1) Dividends

I felt a bit cheated yesterday after discovering that I'm the only one in my office who won't be receiving a AECT dividend cheque in the mail. After a wee history lesson on Vector, the transmission provider, I learned that everyone who uses Vector for the delivery of their electricity, has a power bill in their name and lives in either Auckland, Manukau and North of Papakura will be celebrating the profit sharing joy.

My gift to those left on the sidelines, or not, is this cheeky little piece from Forbes Money called Two Truths and a Lie about Dividends. Bring on the SOE sales I say.

2) Safe but sorry

Understandably many investors fled to the security of cash and fixed interest to protect themselves from the stock market meltdown at the height of the global financial crisis. While the strategy served some well  many investors (at least those who never returned to the equities market) may be sorry.

Reuters reports on how mum and pop investors who have stayed cleared of equities have missed out on the "least celebrated bull market in history.''

Stocks have more than doubled since the GFC and are headed toward a five-year high now.

3) 3 overvalued assets

The Wall Street Journal's Howard Gold, in an opinion piece about the three most over-valued assets, blames yield seeking investors for contributing to the bubble like conditions in the bond market. Gold describes long U.S. treasury bonds as the 'mother of all bond bubbles.' While yields have fallen from 5.25% in June 2007, to a near record low of 1.4% in July, bond prices have soared. Some are predicting yields could yet fall to 1%. 

Treasury inflated protected securities are #2 on Gold's list of over valued assets followed by high yield bonds.

4) Insane mark-ups

This past weekend, I took my kids to a movie. Because I believe movies (with all the sugary coated trimmings) to be a massive rip-off, we seldom go. 

Here, compliments of the Huffington Post is a video compilation, of more insane rip-offs to be avoided. It includes eyeglass frames, bottled water, texts, drinks at restaurants, the mark ups of which are 1,000% in some cases.

5) The life you can save

In case you missed the last link I posted from Mr.Money Moustache, who has pared his household running costs down to $2,000 a month for a family of three, MMM has decided to donate any additional blogging income over $2k. MMM has been doing a bit of research on this front to determine where and how his donation dollars will go the furthest. As part of that, he's done a nice job reviewing a book on this topic called "The Life you can Save.''

A nice meditation and some musings on philanthropy and the targeted aid. 

To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter @amandamorrall

 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Hi Amanda
Having just moved out of Central Auckland to West Auckland - yeah I know...sorry :-) - it seems we pay less for our electricity.......that's where the dividend comes from!
And god help you if you have a fault on the lines and you dare to try and approach Vector for information!

insane mark ups... motor vehicles
purchased a brand new vehicle 2 years ago for $23999
i have only done 6000 k in it but the price offered by dealer was $13500.
reasons given were that it after all it's 2 years old and we have over heads unlike a private buyer/seller.
its just a pity that those excuses for a low price don't work both ways.

Hopefully that car will last  you a looooong time though, and minimum breakdowns. Is it under warranty? 

still under warranty and running smooooothly

Hopefully that car will last  you a looooong time though, and minimum breakdowns. Is it under warranty? 

but thats depreciation and not markup.....
I know power tools are nuts....$800US v $1800NZ makes no sense.....
regards

No movies, eyeglass frames, bottled water, texts, drinks at restaurants.
Jeez - drinking bottled water at restaurants must be the ultimate sin!

Yeah, the last time I paid for bottled water at a restaurant was in Christchurch when the tap water was so heavily chorinated it smelled like I was dining at a swimming pool. Still, I would've had drank it had my Chch friends not insisted I get bottled.  

#2 Any ZH readers here will vouch for the main reasons mom and pop (and retail) investors staying clear of the sharemarket are because a) it's being taken over by algols (which are still pretty unreliable, eh Knight Capital?), b) it's becoming more and more disconnected from reality (APPL over 10% of the value of the NASDAQ????), and c) it's being artificially propped up by the Fed with QE.

Oh and you stand a reasonable chance of having your capital commingled by a fraudulent broker as they go down (MF Global Australia anyone?). I think swimming offshore of WA is less risky at present than dabbling your toes back in the sharemarket....

Ha! Seems you've found a good home away from home here Stan. 

Well I get a little tired of the apocalyptic nature of Zerohedge - it doesn't pay to have any razorblades handy or be near a cliff while perusing the ZH website. Despite my bearish attitude I can only handle so much depressing analysis. Even Macrobusiness.com.au is getting pretty depressingly negative about Australia's prospects and it's imminent financial armageddon.

I'm kind of bored with The Telegraph as the slow motion train wreck that is the Euro is just going on and on and on it's like Groundhog Day. Just default already!

Business Spectator is so hopelessly biased, I read bloomberg and Alphaville on my phone at home, and we can't use Twitter or FB here at the office, so NZ Interest (and your Take 5 column particularly) is rather refreshing and still financially interesting. Plus some of the commentors are funny.

 
You sure have Stanley...now you just stay right here where you can be appreciated and ridiculed in the same day...( a lot like a marriage really).
 No matter how thick gloom's mist becomes, as it descends upon those who inhabit Doomstone, Miss Lllly's (aka Amanda's) beacon  shines like a warm lamp in a cold window ,for a trail weary stranger.......
 N they can git pretty strange round these parts. 
I expect Ralph'll be along any minute now. 

Hey there Christov - our posts haven't yet descended to the level of casting negative aspirations on a particular segment of NZ society, and thus have so far not provoked the moral-rectitude-dealing pen of Ralph, springing forth to castigate us for our judgmental tomes. Give it time though, we’ll get there…

 
I could have done with you over the weekend, as I copped a bit of abuse on Facebook for (insensitively) suggesting that since myself and the other 3.8 million non-cantabrian NZers are going to be footing the bill of upwards of $30 billion to rebuild Chch, perhaps that money could be better spent not building it again over a known faultline. And in fact using some of it to relocate people to Dunedin and giving that city a spuce up and a new port and thus saving an estimated $10 billion in the extra costs of building to an earthquake zone level with higher levels of insurance (and perhaps a high speed rail line to Picton).

Especially as businesses seem reluctant to relocate back to Chch. Perhaps it could be a good time to consider the economic ramifications of borrowing $30 billion, and the ongoing tax burden that is going to place on this and future generations, and make a rebuilding decision on what makes the most commercial sense (because cities are primarily created to serve commerce) instead of a knee-jerk reaction to try an rebuild something that is now there for historical purposes only.

Hardly controversial.

Sorry, running a bit late through work commitments.  But present.

LOL I think we are still above board here at present.

Yesiree Bob..Stanley we are , but only just in my case......have a good one..!!
 You too Ralphie..!