Macquarie still strong on gearing
Peter van der Westhuyzen
Despite rising interest rates and a volatile market, gearing is still an attractive financial strategy, Macquarie Investment Lending said this week.
It is a widely held misconception that as interest rates go up demand for gearing decreases, Macquarie head of sales and marketing Peter van der Westhuyzen said.
He said most investors were looking for the after-tax benefits of investment strategies and that “the effects of increasing interest rates on an after-tax basis are minimal”.
However, he warned potential investors that it was a “buyer beware” market.
“Be boring and stick to the tried and tested,” he said.
“Single stock holdings and gearing really don’t mix,” he added.
While gearing is attractive as an end-of-year strategy, van der Westhuyzen repeated the message coming from a number of industry experts when he advised investors to think of gearing strategies as longer-term investments.
“The only way you’re going to make money in the short-term is to win Lotto,” he said.
AUTHOR
Mike Taylor
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