Juggling Dynamite

What we ingest makes a huge difference to our overall health and vitality, especially as we age.  In fact, because developed world living is mostly sedative in nature, in terms of weight management, what we eat and drink plays an even larger role than intermittent work- outs.  It’s really hard to outrun a bad diet.

However, cultivating and retaining strength and acuity requires more than just a healthy diet and portion control.  ‘Death by chair’ is a leading cause of physical and mental deterioration today, and a new study confirms that a powerful antidote is to keep moving and strength-training our muscles as we age.  Regular aerobic and resistance training yield priceless compound benefits over time, and all we have to do is invest our effort.  See Exercise wins: fit seniors can have hearts that look 30 years younger:

As for muscle health, the findings were even more significant…researchers were surprised to find the 75-year-old muscles of lifelong exercisers were about the same as the muscles of the 25-year-olds. “If I showed you the muscle data that we have, you wouldn’t know it was from an older individual. You would think it’s from somebody that’s a young exerciser.”

Sydney has been an epicenter for speculative fervor in the Australian property market over the past decade, much like the greater Toronto and Vancouver areas in Canada.

As shown in this chart, price declines over the past year have now been about 10%.  This is larger than the previous four declines since 1989 but still less than the 18% decline seen in the 1982 recession.
Given the rise and run of the most recent boom, further downside is likely for Australian property prices this cycle. This is a healthy and needed correction to help restore affordability in shelter.

That said, the downside to date has only retraced prices to 2016 levels, as shown here.

Further retracement is likely and necessary but threatens the highly levered owners, lenders and investors presently exposed in the space.  It’s also a broad negative for the larger Australian economy, which, like Canada, became precariously dependent on the realty sector and debt-enabled related spending since 2008.  See:  Australian house prices fall most since global financial crisis.

Higher-end properties have the most price to lose in this process, as credit growth recedes and an aging population looks to raise cash and reduce living expenses.

What’s causing the property bust?  The levered boom before it, of course. This segment discusses recent numbers further.  Here is a direct video link.

The below segment is a worthwhile discussion of the interconnection between central bank repressed interest rates and the simulateous rise in real estate and financial assets over the last decade, leading to the first ever ‘everything bubble’ globally.  Naturally, what went up together is now coming down together, and it’s important to note that recoveries after credit-driven property busts tend to take years, not months. Here is a direct video link.

I have no idea how or whether David Hay and his management firm are expressing his cautious view in their investment strategy or asset allocation.

The reality is that even the few commentators and managers who do acknowledge or warn that loss cycles are underway, rarely recommend or take meaningful protective measures for capital at risk. Believe it or not.  This is why few individuals or managers protect principle and preserve liquidity, and most end-up liquidating into weakness rather than buying during clearance sales.