Investopoly

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If you're following the case for going underweight Australian shares and leaning into global developed markets, you inherit a new question: what do you do about currency risk?
Every international investment has two return drivers: the underlying market, and movements in the Australian dollar, and this episode is a clear-eyed guide to whether you should neutralise the second.
Stuart explains what hedging actually does, why it never removes 100% of currency risk, and the single most misunderstood aspect of it: interest rate differentials. 
Because Australia's cash rate currently sits above the US, hedging US exposure earns a modest positive carry, but that relationship can just as easily work against you. 
He weighs the real trade-offs: the Aussie dollar is a "risk currency" that falls in a crisis, so staying unhedged can act as a shock absorber when markets tumble, while hedging makes more sense when the currency trades well below fair value.
He also covers a crucial and overlooked detail, the TOFA hedging election and its tax consequences, why bonds should almost always be hedged, and what the academic research says. 
The upshot: their default is unhedged for shares, favouring hedging only as the dollar approaches US60 cents.
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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.
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My new book, Wealth by Design, is out now:
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Important
This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Three listeners wrestling with structure and second-guessing. "Marty," an Adelaide doctor who's become genuinely financially literate since engaging a planner two years ago, feels his arrangement is messier than it should be: managed funds underperforming at a 2.9% IRR, borrowed money in the trust, and a cash-flow plan he's no longer sure about.
 He asks whether to pause super contributions, rethink gearing inside the trust given a possible 30% distribution floor, and what broad direction to take back to his adviser (or a new one).
"Angela," transitioning to retirement in Sydney, faces a painful crossroads: her Upper North Shore home has fallen in value after a downsizing purchase, and a plan to shift half into a company has surfaced an unexpected landholder duty trap. Should she crystallise the loss now or hold long-term?
Finally, a low-income investor living entirely off investments worries the proposed 30% minimum tax on capital growth sits above their marginal rate, upending a strategy built on selling international share growth. What are the alternatives when yield-chasing ETFs rely on covered calls, and markets sit at all-time highs?
Structural nuance throughout, with the usual reminder these are general discussions, not personal advice.
Our most popular free guides:
Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.
Download them here
My new book, Wealth by Design, is out now:
Buy online or in bookstores. The ebook is available now, audiobook coming soon.
Got a question for the podcast?
Email us at questions@investopoly.com.au
Interested in working with our team?
Discover how we can work together
Subscribe to my weekly blog:
Stay connected here
Important
This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

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Quarantining negative gearing doesn't just reduce a tax benefit; it can blow a hole in an investor's cash flow. Take a property with a $30,000 annual shortfall: previously, offsetting that loss might have clawed back $12,000–$14,000 in tax, bringing the real cost to around $16,000–$18,000. Now that loss must be carried forward, potentially for 10 to 20 years, leaving the investor to fund the full $30,000 upfront. For many, that makes established property simply unaffordable.
In this episode, Stuart explores a financing structure to bridge that gap, borrowing the negative gearing benefit you no longer receive upfront, and repaying it when the deferred deduction is eventually realised. The goal is to align your cash outlay with the timing of the tax benefit, rather than paying years ahead of it. Crucially, it also frees investors to focus on asset quality rather than chasing yield in inferior locations.
He's characteristically balanced: this isn't a case for property over shares (which remain more effective), the numbers involve real trade-offs (a higher return but roughly 15% less wealth in dollar terms), and it demands equity, discipline and the right temperament. Get personalised tax and credit advice before acting.
Our most popular free guides:
Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.
Download them here
My new book, Wealth by Design, is out now:
Buy online or in bookstores. The ebook is available now, audiobook coming soon.
Got a question for the podcast?
Email us at questions@investopoly.com.au
Interested in working with our team?
Discover how we can work together
Subscribe to my weekly blog:
Stay connected here
Important
This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Four listeners bring sharp, forward-looking questions. "Tony" wonders whether super recontribution strategies, used to cut the taxable component and reduce death benefit tax, could be the next target for a budgetary hatchet, and asks for Stuart's view without giving the government any ideas.
An anonymous listener, 37, mortgage-free on a rural Victorian property with $300k in cash, feels he's at a genuine crossroads: use a buyer's agent to acquire an inner-Melbourne house and hold, or aggressively invest into ETFs and super toward a $120k perpetual income? Stuart weighs the two paths. Tom, 36, with seven properties and a fast-growing portfolio, asks whether to keep buying with his available equity, whether his ETF choices stack up, whether to sell some property to build shares, and whether to diversify his property-only SMSF into something like VGS.
Finally, Alf poses an intriguing technical question: can you recycle equity from a grandfathered, pre-Budget investment property to buy new assets, and still negatively gear the newly drawn interest, since the underlying property isn't subject to the new rules?
Practical thinking on structure and sequencing throughout, with the usual reminder these are general discussions, not personal advice.
Our most popular free guides:
Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.
Download them here
My new book, Wealth by Design, is out now:
Buy online or in bookstores. The ebook is available now, audiobook coming soon.
Got a question for the podcast?
Email us at questions@investopoly.com.au
Interested in working with our team?
Discover how we can work together
Subscribe to my weekly blog:
Stay connected here
Important
This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

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Melbourne has tested investors' patience like nowhere else. Its median house price has grown just 1.8% a year since early 2017, below inflation, meaning that, in real terms, property is cheaper today than it was almost a decade ago. Naturally, investors want someone to blame. But in this episode, Stuart argues the usual suspects are largely wrong.
Victoria's land tax regime, tenancy reforms and ballooning state debt get cited endlessly, and Stuart doesn't dismiss them. Still, he shows why the links to prices are weaker than they appear (in one case, buying another Brisbane property triggered a higher land tax bill than going to Melbourne). 
The real driver, he contends, is what came before: an almost uninterrupted 20-year boom from 1997 to 2016, unmatched by any capital city in 45 years of data. The longer the boom, the longer the correction needed to work off the gap.
Using a declining long-run growth benchmark, Stuart's analysis puts Melbourne houses around 21% below trend and apartments 29%, the clear outlier while Brisbane, Adelaide and Perth run well ahead. With replacement costs now exceeding market values, he makes the case Melbourne may be intrinsically undervalued, and explains how to think about whether to hold or sell.
Our most popular free guides:
Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.
Download them here
My new book, Wealth by Design, is out now:
Buy online or in bookstores. The ebook is available now, audiobook coming soon.
Got a question for the podcast?
Email us at questions@investopoly.com.au
Interested in working with our team?
Discover how we can work together
Subscribe to my weekly blog:
Stay connected here
Important
This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.