Accumulation and Compounding

The Independently Wealthy – April 2026 End of Month Update

Old Man with a Gold Chain (1631) – Rembrandt van Rijn – Art institute Chicago

In his youth, it was a revelation to Slack Investor that some people didn’t have a job – they just had income derived from assets.

He didn’t know of anyone who was independently wealthy, and thought that the normal course was to work hard till retirement age, then apply for the government pension. That’s what his parents and grandparents did. Those who have been employed since compulsory super emerged in the 1990’s can rely on industry-based super plus any extra savings.

Slack Investor has had the aim of being independently wealthy – being able to support retirement through income from assets (investments). This is the goal. However, things happen along the way, and the next best thing would be to own your own (even modest) home before retirement and get to the ‘sweetspot’ of assets. As of March 2026, this is where a couple can have between $470 000 and $1 045 500 in retirement assets and still qualify for some government-funded aged pension to top up their income from savings.

The Path to Independent Wealth

It was reading the pioneer finance blogs of people like Mr Money Moustache that the idea of ‘Independent Wealth’ could be pursued by a normal working person. First, you have to save your retirement funds. Hopefully, the fund return will be a few percent above inflation and then you can withdraw money (based loosely on the ‘4% rule’) to live on.

‘Assuming a minimum requirement of 30 years of
portfolio longevity, a first-year withdrawal of 4%,
followed by inflation-adjusted withdrawals in
subsequent years, should be safe.‘ _{– FPA Journal – The Best of 25 Years: Determining Withdrawal Rates Using Historical Data}

Maximum safe withdrawal rate (SAFEMAX) calculated for a 30-yr retirement on a conservative balanced portfolio of 50% US stocks and 50% US Bonds. From – Determining Withdrawal Rates Using Historical Data by William P. Bengen

There is some concern that this ‘4% rule’ of thumb is inadequate as it is based upon historical market performance from 1926 until 1992 where stock market returns have been mostly good. Some advisers recommend a lower withdrawal rate of 3.3% in the initial stages – and a flexible approach to retirement spending.

The Independent Wealth Path Could be Tricky in the Next Decade

Due to the current high valuations, Vanguard is predicting a lower than average median 10-yr return for equities for the next 10 years. The Vanguard predictions are based upon past data and do not account for the productivity benefits of AI – which might justify current valuations – but they are a concern.

Vanguard 10-year annualised nominal return (In Australian Dollars) and volatility forecasts are based on the 31 December 2025 run of the Vanguard Capital Markets Model (VCMM) The model incorporates the long-term predictive power of current CAPE valuations.

Slack Investor’s view is that no one really can predict the future, and there is a high volatility expressed with these equity forecasts. However, the Vanguard model 10-yr forecasts have usually been correct between the 25th and 75th percentile ranges. This gives a more rubbery forecast that Slack Investor is happier to work with. From the Vanguard Capital Markets Model forecasts issued April 2026, the predicted 10-yr percentile annual returns for each asset group are shown below. Median predictions for 10-yr earnings in stocks are the lowest since this prediction model was developed. When compared to historical returns over the past 30 years (Vanguard), the median forecasts are quite low for stock-related investments.

Asset Class	25th Percentile Forecast	Median Forecast	75th Percentile Forecast	Vanguard Historical 30-yr av. Returns
US Equities	2.6%	5.9%	9.6%	10.1%
Global (ex US) Equities	3.1%	6.0%	9.1%	9.6%
Emerging Markets	0.5%	4.6%	8.7%	9.9%
US Treasury bonds	4.0%	4.6%	5.3%	4.1%
US Inflation	1.4%	2.0%	2.5%	2.6%

Vanguard model predicted 10-yr (From 2026) percentile and median annual returns for each asset group. The historical average for the previous 30-yr is also shown.

The ‘Independent Wealth’ path could be tricky to negotiate in the next 10 years if the forecast 10-yr returns are nearer the 25th percentile – there is a 25% chance that the returns will be lower than this. The best way to protect your funds is to hold a good portion of them in stable reserve. Slack Investor has about 30% of his funds in annuities, cash/bonds, stable dividend stocks, REIT’s, etc. Also, keep your retirement portfolio diversified across asset classes.

What Slack Investor did with the ‘4% Rule’

Before retirement: He used the ‘4% rule’ of thumb to determine the equivalence of salary and income, so that he knew if he had enough funds to retire.

For example, if a retirement salary of $40 000 for a couple is required, the 4% rule indicates that we should multiply this amount by 25 to get our retirement lump sum.

$40 000 x 25 = $1 000 000 in retirement funds

$80 000 x 25 = $2 000 000 in retirement funds, etc

First 5 years of retirement: Be careful here, this is where you are most prone to sequencing risk.

Sequencing risk (also called sequence of returns risk) is the danger that a significant market downturn in the early years of retirement will permanently damage your portfolio _{– Wealthlab}

Slack Investor encountered below average returns in his 2nd and 4th year of retirement. He coped with this in two ways.

1. A dynamic spending strategy approach to net withdrawals from the retirement fund. After a good year, we would spend more on holidays. A bad year would mean a more modest approach.

2. The use of pile theory (buckets). His initial spread was 70% in investments and 30% in stable income. He has tried to keep these ratios reasonably steady by withdrawing from the over allocated pile each year.

Set up a ratio of Stable income: Investments in Your Retirement Fund that you are happy with and take your annual expenses out of the pile that is over allocated at the end of the year. In the above case, Investments – From Slack Investor

After 5 years of retirement: Fill your boots. If the first 5 years hasn’t stressed your retirement funds, then things should be fine. There are mandated withdrawals from Super Funds (Aged 65–74: 5%, 75–79: 6%, 80–84: 7%, etc) but, if you are under age 75, re-contribution of any excess funds is a good idea.

Slack Investor has gone down the path of trying to preserve most of the capital in his retirement fund to use as a gift to the next generation or, (I hope not!) an aged care accommodation deposit. He won’t mind a bit of capital shrinkage as he gets older. He anticipates that, after the age of 70, there is more a danger of running out of time rather than money.

April 2026 – End of Month Update

Slack Investor remains IN for Australian index shares, the US Index S&P 500 and the FTSE 100.

All markets had a rebound in April. The rise was modest for the ASX 200 (+2.2%) and the FTSE 100 (+ 2.0%). The ‘Crazy Brave’ US market had strong growth (+ 9.5%) on the possibility of an Iran War ‘deal’ and a return to ships passing freely through the Strait of Hormuz. At the time of writing, this hasn’t happened yet.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

The Super Squeeze – March 2026 End of Month Update

**Woman Giving Money to a Servant-Girl** (c. 1668–1672) (Cropped) – Pieter de Hooch.

In times of market turmoil, Slack Investor likes to take his mind off the day-to-day fluctuations of his share investments and concentrate on things that he knows that work. He knows that the stock market is volatile. He knows that the stock market provides excellent returns to the long-term investor. He knows that his Stable Income pile will fund his needs.

For a mood lift, he just taps into his inner Julie Andrews and simply remembers My Favourite Things. These favourite things include long-term investing and Superannuation.

Compulsory Pay Day Super

Compulsory Super was brought into Australia way back in 1992 by the force of nature Paul Keating. Every time that there is a proposed change to the structure of Superannuation, Slack Investor steels himself for the worst.

However, to almost universal acclaim, there was some good news in Superannuation circles with the introduction of pay day Super. From 1 July 2026, employer paid Super must be transferred on the same schedule as an employee’s pay cycle rather than quarterly. Previously, the rules allowed for the Super Guarantee contribution to be paid in lump sums every 3 months. The new rules are expected to benefit lower-income workers under casual, and part-time arrangements. Their Super will be deposited into their accounts and earning money straight away.

‘By switching to payday super, a 25-year-old median income earner currently receiving their super quarterly and wages fortnightly could be around $6,000 or 1.5% better off at retirement.’ _{– Stephen Jones , Assistant Treasurer}

Bewdy … we can relax now and let the compulsory 12% Super guarantee fund our comfortable retirement … Not so fast!

The ‘Voice of Super’ outlines the ‘Squeeze’

The Association of Superannuation Funds of Australia (ASFA) update their Retirement standard every quarter. They follow the effects of household costs on a retirement budget for both a comfortable and a modest retirement. ASFA define a ‘comfortable’ retirement where the budget allows for Occasional restaurant meals, take-away coffee and a yearly domestic holiday and an overseas trip every 7 years . Slack Investor has more lofty goals than this. Let’s focus on at least a comfortable retirement!

Even before President Trump’s misadventures in the Persian Gulf, prices have been moving north. The CPI rose 3.8% in the 12 months to December 2025 – but other household costs are rising faster. ASFA found plenty of price increases for the same period.

Electricity up 21.5 per cent, driven by the expiry of energy bill relief subsidies
Coffee and tea up 15.3 per cent due to rising commodity prices
Beef up 10.8 per cent
Domestic travel up 9.6 per cent
Water up 7.1 per cent
Property rates up 6.2 per cent
Medical and hospital services up 4.3 per cent
Fruit up 4.2 per cent
Private rental costs were up 3.9 per cent, just above the general inflation rate.

These price pressures have moved the required income for a comfortable retirement to even higher levels.

‘… homeowners aged 65 and over now need $77,375 annually for a comfortable retirement as a couple, and $54,840 for a single.’ _{– ASFA Report February 2026}

ASFA calculate that these retirement incomes at age 67 would require a super amount of $630,000 for singles and $730,000 for couples – assuming home ownership.

Are we on track?

Age	ASFA Required Comfortable Super Amount	Actual Male	Actual Female
30	$66 500	$55 690	$46 586
40	$168 000	$140 680	$109 209
50	$296 000	$254 071	$190 075
55	$377 000	$319 743	$242 945
60	$469 000	$395 852	$313 360
65	$571 000	$448 518	$392 274
67	$630 000	?	?

Assuming a future pre-tax income of $65,000 a year that keeps track with inflation. ASFA have calculated the Super milestones for a single person to reach $630,000 in super at retirement – ASFA February 2026 Report. Actual Male and Female Super balances from Rest Super (March 2026)

Male Super amounts are approaching the required ‘comfortable’ Super levels – but are still lagging. There is a definite gender gap in Super balances. Women suffer from structural inequalities in the workplace that include lower paid professions and career breaks for family.

As well as these existing Super shortfalls for a ‘comfortable’ retirement, these ASFA budgets assume that the retirees own their own home.

Despite the difficulty, Slack Investor encourages all to have the goal of their own home by retirement age. This may be a modest apartment, tiny home, a granny flat, or a place in the country. But it must be yours! Also, keep an eye on your Super and how it relates to the ASFA targets at each age level. Slack Investor always made sure his Super was in the Highest Growth option when he was under 55 and topped up his balance regularly with ‘Salary Sacrifice’ contributions.

March 2026 – End of Month Update

It was in March 2025 Update when Slack Investor wrote about the first ‘Trump Slump’ due to the random application of his trade tariffs to the world.

Well, thank you again Donald for your contribution. All followed markets fell this month. The ASX 200 down 4.0%, the FTSE 100 down 9.7%, and the S&P 500 down 4.3%. For now, each Index remains above their stop losses – but both the UK Index and Australian Index are perilously close to their stops. For now, Slack Investor remains IN for the FTSE 100, the ASX 200, and the US Index S&P 500.

The talented David Rowe has summed things up again – David Rowe, AFR

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

The quarterly updates to the Slack Portfolio have also been completed. There are some significant changes since the December 2025 update. Slack Investor has tinkered – and tried to remove the more speculative stocks in the Portfolio. He has stayed with established growing companies that will hopefully weather the storm. He has ended up with a good amount of cash (17.5% of Slack Portfolio). This will hopefully be deployed when he sees a return to more stable conditions.

Ride that Horse! – October 2025 End of Month Update

Slack Investor reads a lot of finance news each week. Sadly, there now seems to be a portion of the finance news that seems to come from AI sources. However, there is still a lot of good stuff by real people – and he came across an excellent article by Carl Capolingua that had some great investor truths that apply to the current market.

A disciplined investor doesn’t fight the market – they respect it. They accept the market is responsible for their investing outcomes, win, lose or draw. They also accept that they have absolutely no control over the market or the outcomes it delivers. _{– Carl Capolingua, Livewire Markets}

The original article focuses on the difficulty of letting go of investments that have shown a loss. Slack Investor is still searching for this zen state and has written about his own troubles with selling stocks that have had a sudden fall. However, the quote above sums up ‘the bargain’ that Slack Investor has made with stocks and their volatility. I don’t know when the next correction (or worse!) is coming … but I know it’s coming.

World Markets are Expensive at the Moment

Although Slack Investor collects his own data on relative market value using CAPE numbers, the remarkable Ashley Owen has produced a great graphic showing the relative size of the world markets and how expensive they are at the moment in terms of PE and Yield. Clearly, the US market looks over ripe and any corrections here will historically influence all other markets.

World markets plotted by PE Ratio and Yield – From the very erudite Ashley Owen of Owen Analytics

Short-term Returns are Volatile

The chart below shows that the S&P 500 returns for a calendar year are all over the place, but if you just hung on, and didn’t sell the S&P 500 when times were tough, you would be rewarded with an average annual return of 12.2% over 30 years. Not Bad. Australian shares have returned an average yearly gain of 11.5% from 1900 to 2020.

Yearly Returns of the S&P 500 (green columns) and 15-yr rolling returns (blue line) – From T. RowePrice

What to do when the Correction comes

‘If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.‘ _{– Vanguard founder – John C. Bogle}

Slack Investor has had no real luck in timing the markets – despite a disciplined 21-yr project trying to do this. There are those that can, Marcus Padley and his investment team have gone to 100% cash and reported this on 21 October 2025. Slack Investor hasn’t the knowledge, or gumption, to confidently predict market exits and entries – and yet, has done OK in the investing business without too much angst.

Slack Investor knows that for an ordinary person, the stock market is the place with best long-term returns with minimal transaction costs. The bargain – to accept volatility in return for long-term gains – is accepted.

He has his stable income pile to keep the dogs from the door.
He tinkers with his Investment Portfolio of predominantly growth shares, but mostly he leaves it alone.
He will not sell his shares after a correction and convert to cash.
He has elevated his cash position slightly (6% cash, 94% invested) in case some bargains come up post-correction.

These are choppy times and there is an uncertain near-term future – situation normal in the stock market. Some of his portfolio (e.g. CSL, WTC, TLX) have had big falls lately. However, Slack Investor has had a look at future revenue predictions and has not completely given up on these stocks. Though, CSL is losing its shine as a growth company in Slack Investor terms.

He will keep riding that stock market horse … and push to the forefront of his mind the pleasant times at the rodeo bar with his cowboy mates … reflecting on our glorious achievements.

October 2025 – End of Month Update

Slack Investor is IN for Australian index shares, the US Index S&P 500 and the FTSE 100.

The S&P 500 (+2.3%) and the FTSE 100 (+3.9%) have continued their strong monthly growth. Slack Investor is pleased to stay on board but there he remains nervous about the US markets. For the ASX 200, (+0.4%) a flat month with plenty of volatility.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

Bogleheads and Vanguard Annual Chart – August 2025 End of Month Update

Slack Investor Hero John ‘Jack’ Bogle with a fitting ‘HOLD’ mantra.

Bogleheads and Vanguard

Slack Investor has paid tribute to the contribution that Jack Bogle has made to the investing world. He started Vanguard Investments in 1974. Bogle’s philosophy wasn’t about trying to beat the index and charging high costs – instead, he would offer a low-cost alternative fund based on the US index. Mr Bogle’s pioneering work with these low-cost funds has led to the popular low-cost Exchange Traded Funds (ETF’s) that proliferate today. Astonishingly, there are now more ETF’s listed in the US (4300) than actual companies (4200).

Slack Investor can well remember the days when a fund manager would charge you 4% of your capital for entry and then lift a further 2-3% in annual fees for the privilege of investing your money – that was not the ‘good old days’.

‘Bogleheads’ are a group of mainly US followers of Jack Bogle’s philosophy and they strive for long-term growth through low-cost, diversified index funds while minimizing fees. They are generally ‘Buy and Hold’ investors. One of their strategies is the three-fund portfolio – where investing is simplified into three low-cost funds – one for the local share market, one for international shares and one for bonds. For the US, the conservative recommended proportions are, your age defines the % in Bonds and the remainder percentage is split so that roughly 20% is in international equities.

In Australia, such a portfolio is a little more complicated as you need to cover yourself for currency risk – and hedge your international exposure for any fluctuations in the Australian dollar. Exposure to emerging markets is also recommended as a diversifier of risk. A Bogleheads type of portfolio is possible using 5 Vanguard funds.

AUD based equities	VAS (MER: 0.07%)	(Australian equities)
	VGAD (MER: 0.21%)	(Developed world ex-Australia equities – hedged to AUD)
Non-AUD based equities	VGS (MER: 0.18%)	(Developed world ex-Australia equities)
	VGE (MER: 0.48%)	(Emerging Markets)
Bonds	VAF (MER: 0.10%)	(Aggregate bond fund)

The 5 ETF’s for an Australian Bogleheads portfolio. Management Expense Ratios (MER) ar shown for each ETF. For a younger person, Australian Bogleheads suggest proportions VAS: 20%, VGAD: 20%, VGS: 40%, VGE: 10% and VAF: 10% – From Passive Investing Australia.

Slack Investor can see the attraction that Bogleheads have in passive investing and, when he loses his mojo, will opt for a more simplified Boglehead-approved passive exposure to growth and cash/bond assets. Stockspot also offer diversified portfolios using just 5 ETF’s – with excellent performance so far.

Vanguard Financial Year Total Returns for major asset classes

Every August, Vanguard produces a summary brochure focusing on the last 30 years of finance data. It is a reminder that the top performing asset class for each year (green) is seldom the top performer the year after. A lesson in diversification.

Extract from the FY 2025 Vanguard Index Chart Brochure showing the total returns for each asset class for the financial years since 1996. Top performing asset class for the year is highlighted in green and the worst in pink.

Vanguard Annual Chart

It is now time for Slack Investor’s favourite chart – a succinct demonstration of long-term investing. The essence of successful investing is to be invested at least somewhere in appreciating assets – and then, let time do its work. Below is an extract from the Vanguard 2025 long-term investing chart. The numbers on the right are the results of investing $10,000 in the Index funds of the indicated asset classes for 30 years.

Extract from the 2025 Vanguard Index chart (Just the 2007-2025 portion is shown) – the dollar values on the right are the results of investing $10,000 in index funds in each asset class for 30 years (since July 1995). *– Check out the full 30-year glory of the* Vanguard 2025.PDF chart *– Click image for the whole 30-yr chart.*

August 2025 – End of Month Update

Slack Investor is IN for Australian index shares, the US Index S&P 500 and the FTSE 100.

The S&P 500 (+1.9%) continues its progress. Slack Investor is pleased to go with the flow but remains nervous for the US markets. For the ASX 200 (+2.6%) and the FTSE 100 (+0.6%), also some monthly gains.

The latest reporting season has brought a few shocks to the Slack Portfolio. Big falls in Botanix (BOT), Telix Pharma (TLX), and CSL. Not so worried about CSL, but looking to reduce holdings in the less established companies (BOT, TLX) when things settle down. Next blog, Slack investor will go into detail how he is dealing with a few sudden drops in individual stocks.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).

Financial Year 2025 – Full Slack Results

‘In God we trust; all others bring data.‘
W. Edwards Deming Statistician/Consultant (1900–1993)

Slack Investor likes to measure things, especially long-term results. In the world markets, for FY 2025, the FTSE 100 Total Return Index was up 10.8% (FY 2024 up 11.8%). Dividends helped the Australian Accumulation Index to be up 9.0% for the financial year (FY 2024 +12.2%). The S&P 500 Total Return Index is again the top performer – and was up 15.2% (FY 2024 +24.2%). All of these Total Return Indices include any accumulated dividends.

Slack Investor has stuck to his strategy of mostly investing with growing companies that are profitable (Return on Equity >15%), have an established earnings record and, not too expensive (forward P/E ratios <50). He expects a bit of volatility in his growth oriented investment portfolio. He is reassured that, despite the odd negative year in the Slack Fund, the dividends and his separate Stable Income portfolio are doing what they should – keeping Slack Investor with enough cash to ‘keep the wheels on’ the Slack lifestyle – should the stock market sour.

Slack Portfolio Results FY 2025

All Performance results are before tax. The Slack Portfolio is Slack Investor’s investment portfolio. He is glad to report an annual FY 2025 performance of +18.1%. Full yearly results with Australian benchmarks are shown in the table below. Slack Investor realises that only long-term results really count.

For property values, Slack Investor is using the Home Price Index supplied by PropTrack. The Index uses median values for each city – I would have preferred calculations that include the net rental yield, but this will have to do. Of course, the real estate industry avoids true measurement of real estate performance by collecting figures only on gross price changes – they ignore the significant transfer costs involved (Stamp Duty, Conveyancing, Bank Fees, etc) and, the costs of any home improvements and renovations.

For FY 2025, the Australian Share market Total Return Index (ASX200 Acc) was up 9.0%. The Vanguard Diversified Growth ETF (VDGR), comprising International shares (42%) and Australian Shares (28%), increased by 12.7%. Inflation is now within the Reserve Bank target – with the CPI at +2.1%.

The Cash rate of 4.3% is above inflation. Cash is important – but not a way to grow your wealth. The average readily available cash rate of return since 2010 is 2.6% and, for cpi measured inflation, it is 2.7%.

Yearly Performance (%) results since 2010

The Slack Fund yearly Internal Rate of Return (IRR) vs BENCHMARKS. The Median Balanced Fund (41-60% Growth Assets), Vanguard Growth Fund, ASX 200 Accumulation Index, PropTrack Home Price Index in both Brisbane and Melbourne, and Cash (Australian Super Cash Fund) and Consumer Price Index (CPI). AV. YEARLY is the annual mean of all the data since 2010.

5-yr Average Annual Performance

Although Slack Investor collects yearly figures, the 5 and 10-year compound annual performance gives me a much better idea about how things are really going. Long-term results will smooth out any dud (or remarkable!) yearly figures. The Slack Fund is still ahead of most Benchmarks – but running a close second is Brisbane Residential real estate over a five-year period.

*The Slack Fund **average 5-yr compound yearly return** vs BENCHMARKS in chart form.*

10-year compound annual rate of return

The Slack Fund has been around a while and generating some good long term data (10-year compound ‘rolling’ annual rate of return). Over this time frame, the Slack Fund has been performing very well. For FY 2025, a 10-year annual rate of return of over 17% – Go Slack Fund! The 10-yr data is shown below in table and chart form.

It is useful to note that, the 10-yr rates of return for the Median Balanced Fund, Vanguard Growth fund, ASX200, and residential property in Brisbane and Melbourne are also good long-term investments. These appreciating assets generate a 10-yr compound annual rate of return in the region of 6-9% p.a.

The Slack Fund average 10-yr compound yearly return vs BENCHMARKS in table form. Prior to 2022, 10-yr Vanguard Growth fund figures were not available. AV. YEARLY is the annual mean of all the data since 2019.

Although Cash is necessary to add stability and flexibility to a portfolio. From the chart below, Cash as a long-term investment vehicle, is a poor choice.

*The Slack Fund **average 10-yr compound yearly return** vs BENCHMARKS in chart form.*

15-year compound annual rate of return

Perhaps because Slack Investor is showing signs of age, he notices that there is enough accumulated data for rolling 15-yr rates of return. Happy to report solid long-term results.

The Slack Fund average 15-yr compound yearly return vs BENCHMARKS in table form.

Growth of a $10 000 Investment Since 2009

The beauty of compounding with a succession of good performance results can be seen in the chart below showing the growth of an initial investment in June 2009 of $10 000.

The growth of $10 000 invested in the Slack Fund vs BENCHMARKS. The Median Balanced Fund (41-60% Growth Assets), Vanguard Growth Fund, ASX 200 Accumulation Index, PropTrack Home Price Index in both Brisbane and Melbourne, and Cash (Australian Super Cash Fund).

The Slack Fund has exceeded my expectations. Also, the chart shows that investing in either shares or residential property has been a solid way of growing your money over the long term.

Growth Professionals … and June 2025 – End of Month Update

Slack Investor has a healthy regard for those who make a living based upon their performance. It is a general financial wisdom that, if you are following large companies, you will very probably be better off in the long term with passive index funds.

Percentage of **active** funds that **underperform** (orange) over a 15-yr period – Spiva

However, some active boutique stock pickers may have an advantage when it comes to smaller international companies. In this category, 33.65% of active funds are able to outperform over a 15-yr period.

Slack Investor is currently backing his own abilities on the stock picking front. But, there will come a time when I lack the ability or inclination to do the (admittedly limited) research work. Also, there are some Slack Investor readers who would like to outsource this task.

Hyperion Global Growth Companies Fund ETF (ASX: HYGG)

I don’t follow individual companies in overseas markets that closely – but there are those that do – and do it very well.

Hyperion are Brisbane-based and started this managed fund back in 2014. They have also offered access as a listed ETF on the ASX since 2021. The ETF would be the way that I would buy it.

HYGG is not a low-cost fund as it has a Management Expense Ratio of 0.70% and an outperformance fee of 20% against benchmarks. The ETF, to date, has not paid a dividend. However, in this case, it seems that the managers are offering good value net of fees.

Growth of the Hyperion Global Growth Companies Fund **after fees and costs have been extracted** since 2014 – Hyperion

One-year performance (2024 May +47.3%) is impressive. However, Slack Investor is after the real grafters who can produce impressive results over the long-term. Hyperion is establishing a case for consideration.

5 and 10 year Performance of HYGG – net of fees – Hyperion

The advantage of an active fund manager is that they can be nimble and take advantage of any opportunities that the Hyperion analysts discover.

Holdings	% Portfolio Weight	1-Year Return	Forward P/E
Tesla Inc	12.29	65.9	166.67
ServiceNow Inc	9.42	34.16	60.98
Microsoft Corp	7.95	10.73	33.11
Palantir Technologies Inc Ordinary Shares – Class A	7.65	498.55	263.16
ASML Holding NV ADR	7.15	-20.81	28.74
Spotify Technology SA	7.1	143.26	71.43
Amazon.com Inc	7	12.14	33.67
Block Inc Class A	5.72	2.88	17.73
Meta Platforms Inc Class A	4.61	41.9	28.65

_{Table of the top holdings of HYGG, their portfolio weight, 1-yr return, and forward PE at May 2025.}

When it is time to really ‘get on the couch’, Slack Investor would take a look at these blokes to invest his money. This Hyperion crowd seem to know what they are doing.

June 2025 – End of Month Update

The financial year closes and the Australian, UK and US markets are all in positive territory for the financial year.

Slack Investor remains IN for all followed markets. The ASX 200 (+1.3%) and FTSE 100 (-0.1%) moved modestly. It is a continuation of good times in the US with the S&P 500 rising 5.0%. Are our American friends delusional in an expensive US market? Or, is Slack Investor missing something.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index). The quarterly updates to the Slack Portfolio have also been completed.

The Slack Factor – March 2025 End of Month Update

A WordPress AI generated weird image that reassuringly does not make any physical sense.

Reporting Season

During February, most companies report on their progress up to the end of December. There is a similar reporting season in August for the period up to 30 June. Once all the analyst projections for future earnings are in, it is a good time to update the state of play for companies in the Slack Portfolio.

It took a while for Slack Investor to understand that a company could come in with a great report on the business and still, the price of the shares might go down. This is because reporting season is all about expectations. If a company was expecting an increase in earnings of 22% – and they ‘only’ achieved 20%, the share price is likely to get knocked down on the announcement.

As the Slack Portfolio consists of mostly growing stocks with a relatively high Price to Earnings Ratio. The growing stocks usually have high prices as the company’s growth is priced in. These stocks can get punished severely when an earnings target is missed – price falls of 10-20% are not uncommon. But, it is long term results that really count and Slack Investor is willing to endure any short-term pain for a growing company. This period of ‘Trumpenomics’ is an example of such a time.

Slack Investor uses the excellent Market Screener site (requires email registration) to get information from the Financials tab for each company. Analyst information is not available for ETF’s so, only data on the individual companies that are in the Portfolio is gathered.

In the table below, information is listed for the forecast P/E Ratio (PE 2027), the forecast Return on Equity (ROE 2027), the forecast Earnings Per Share Growth (EPSG 2025) (EPSG 2026) (EPSG 2027) and the average of the three Earnings Per Share Growth figures (EPSG AV). There is some fudging of the figures as some of the forecast EPSG figures were unavailable. Also, for some of the companies that are new to profit, their EPSG figures are skewed – I have limited the EPSG (AV) to a maximum of 50. I have ranked the companies in order according to their Slack Factor.

The Slack Factor

What is the Slack Factor? It is well known that Slack Investor likes

Profitability – measured in terms of the forecast Return on Equity – ROE 2027
Growth – measured as the average forecast Earnings Per Share Growth – EPSG (AV) for the three years 2025, 2026 and 2027.

It is well known that Slack Investor does not like

High Price to Earnings Ratios – measured in terms of the forecast Return on Equity – PE 2027. Sometimes, great companies are just too expensive.

ROE is the forecast ROE (ROE 2027), EPSG is the forecast EPSG for the next three years (EPSG AV) and, PE Ratio is the forecast PE Ratio (PE 2027).

So, things he likes go on the top line and the things that he doesn’t like go on the bottom line. This reduces a lot of the complicated information in Slack Investor’s tiny brain to one number. He has made no attempt to scale (normalise) each input into the Slack Factor. It is just a simple way to rank companies with qualities that he thinks are good. The bigger the number, the more likely the company has attributes that Slack Investor likes – profitability, growth and a price tag that is not too expensive. With these traits … surely good things are more likely to happen?

The fast growing Telix Pharmaceuticals (TLX) is a company that Slack Investor is a fan of, and it has a high Slack Factor of 52. The growth dullard Commonwealth Bank (CBA) has a Slack Factor of only 3 – and, is of no interest to Slack Investor.

Name	Symbol	PE 2027	ROE 2027	EPSG 2025	EPSG 2026	EPSG 2027	EPSG (AV)	SLACK FACTOR
Telix Pharmaceuticals	TLX	25	26	230	70	30	50	52
REA Group	REA	40	32	98	11	17	42	34
Codan	CDA	19	23	20	23	18	20	25
Alphabet (US)	GOOGL	15	25	12	14	16	14	23
Supply Network	SNL	29	38	23	14	15	17	23
Megaport	MP1	50	19	-9	160	40	50	19
Pro Medicus	PME	115	53	40	42	30	37	17
WiseTech Global	WTC	42	20	32	38	34	35	17
Technology One	TNE	48	34	18	20	19	19	13
CSL	CSL	20	18	12	15	16	14	13
Goodman Group	GMG	18	11		34	12	20	12
Coles Group	COL	18	32	-2	17	5	7	12
RPM Holdings	RUL	38	18	10	25	40	25	12
XRF Scientific	XRF	20	18	17	11	11	13	12
CAR Group	CAR	28	15	35	18	12	22	12
ResMed	RMD	20	23	9	10	11	10	12
Wesfarmers	WES	24	33	3	13	9	8	11
Nick Scali	NCK	15	29	-28	29	14	5	10
Cochlear	COH	34	25	15	7	16	13	9
Macquarie Group	MQG	15	13	6	18	8	11	9
Botanix Pharma	BOT	Not	Ranked	–	Not	Enough	Info

Over the next quarter, I will try and sell some of the Slack Investor owned companies with a relatively low Slack Factor – and invest more in those with a high Slack Factor. For homework, using Market Screener, try to work out the Slack Factor for some of the companies in your own portfolio.

March 2025 – End of Month Update

The current ‘Trump Slump’ in stock prices can be attributed to the largest upheaval to global trade since the Second World War – Thanks Donald! All followed markets fell this month. The ASX 200 down 4.0%, the FTSE 100 down 2.6%, and the S&P 500 down 5.8%. For now, each Index remains above their stop losses. Slack Investor remains IN for the FTSE 100, the ASX 200, and the US Index S&P 500.

Slack Investor took the opportunity to tighten up his stop loss values for the FTSE 100 and the ASX 200. On the UK Index chart below, by drawing a black wavy line under the monthly minimum values, it can be seen that some new ‘higher lows’ have been established. It made sense to move up the stop loss to the most recent ‘higher low’.

Monthly price chart for the FTSE 100 – incrediblecharts.com

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index). The quarterly updates to the Slack Portfolio have also been completed.

Long Term Returns … Boring?

Boring isn’t it. How Slack Investor goes on and on … and on and on … about long-term returns. But firstly, some short-term returns. All numbers are in for 2024 and the Slack followed markets all had an ‘above average’ year when dividends are included. The average returns are based upon the 2024 Vanguard Index chart 30-yr returns and, for the FTSE, the 20-yr return.

Index	2024 Index Return	2024 Total Return (inc. Div)	Av. Yearly Total Return
ASX 200	7.5%	11.4%	9.1%
FTSE 100	5.7%	9.7%	6.9%
S&P 500	23.3%	25.0%	11.1%

The beautiful histogram of annual ASX 200 (and proxies) returns (that include dividends) from MarketIndex.com.au has been updated for 2024. Slack Investor is always pleased with an addition on the positive side of the ledger – he notes that there are many more positive years than negative – this also helps his disposition.

Historical Annual Returns of the ASX 200 (including dividends) – Source: MarketIndex.com.au

A similar pattern with the S&P 500.

The last 151 years of annual returns (without dividends) for the S&P 500 Index – From visualcapitalist.com

For both the S&P 500 and the ASX 200, 19% of calendar years delivered a negative return. Therefore, on average, we can expect a negative return for one in every five years.

2025 Predictions?

Slack Investor is no seer. The Financial Press has come up with a range of views for 2025. In a very 2025 move, Slack Investor asked the AI Bot Perplexity for its predictions for the S&P 500 for 2025.

Based on various Wall Street analysts’ predictions, the S&P 500 is expected to deliver positive returns in 2025, with estimates ranging from approximately 9% to 20%. – Perplexity

From experience, Slack Investor knows that the financial press predictions are not very good. Perplexity cautions that the past S&P 500 predictions have generally been inaccurate and unreliable.

Whatever 2025 brings, Slack Investor will take the short-term returns on the chin – he does rely on positive returns in the long-term. As the chart below indicates. If you held a World Index Fund such as Vanguard MSCI Index International Shares ETF (VGS) for 5 years, you would expect positive returns on 88% of occasions. Longer holding periods will almost certainly yield you positive returns. VGS has a relatively low management fee of o.18% and does not hold Australian shares.

Some say that long term investing is boring – but Slack Investor finds it exceptionally satisfying.

Intergenerational Wealth Transfer and December 2024 – End of Month Update

The incomparable cartoonist David Rowe capturing Donald Trump in the Australian Financial Review taking the Republican party for a swim in the sewer.

The Clown in Chief – Stable Genius? Great Investor?

Far be it for Slack Investor to disparage the wisdom of the majority of voting Americans that have just elected Donald Trump for four years as their president. Despite Trump declaring himself as a ‘stable genius’, my mother wisely used to say that ‘Self-praise is no recommendation’.

“I built what I built myself” – Donald Trump

PolitiFact disputes the extent of this claim. There is no doubt that Donald’s path to being a billionaire was helped by intergenerational wealth transfer. Around 1974, his father lent him $140 million in today’s dollars – most of which was never paid back.

“Fred Trump actually lent him at least $60.7 million, or $140 million in today’s dollars.” – New York Times: Special Investigation

There is some contention on how much was available in ‘free cash’ but, if the available amount was invested in S&P 500 stocks in 1974, PolitiFact estimate that it would be worth at least $3 billion today. Using different initial estimates, the National Journal estimates that passive investing in stocks could have enriched Donald by $US8 billion. So, it seems that Donald was destined to be a billionaire – whether investing in real estate – or the stock market.

“Bloomberg puts Trump’s current net worth at $2.9 billion, Forbes at $4.1 billion. The National Journal has worked out that if Trump had just put his father’s money in a mutual fund that tracked the S&P 500 and spent his career finger-painting, he’d have $8 billion.” – Source: National Journal

To further harp on about the miracle of compound interest , there are huge advantages in starting to invest at an early stage. The chart below contrasts the case of Investor 1 at age 25 and investing $5000 per year for 10 years – then stopping, and allowing the compounding interest to do its work. Investor 2 doesn’t start his investing quest till the age of 35, and invests $5000 per year for 30 years. He never catches up to Investor 1.

Source: Federal Reserve Bank of St Louis

Of course, Slack Investor is all about personal empowerment and the chart above rings the bell on starting your investment journey as soon as possible. In the journey of life, you may be one of the lucky ones to receive a gift or inheritance along the way – this advantage is huge! Slack Investor acknowledges his privilege and was given a gift from his grandfather’s estate equivalent to 30% of a year’s salary in his early thirties. The gift went straight on my mortgage.

This makes Slack Investor ponder about the help that a monetary gift can bring. Slack investor is all for self improvement, through education or travel. However, if given a gift of money, he would recommend, at least, using a good portion of it to reduce any debt – or invest. But do it now.

December 2024 – End of Month Update

OK, someone must have been naughty! The year closes and there was no December ‘Santa Rally’ this month. All followed markets fell. The ASX200 down 3.3%, the FTSE100 down 1.4%, and the S&P500 down 2.5%. Slack Investor remains IN for the FTSE100, the ASX200, and the US Index S&P500.

I haven’t yet done the maths on the market yearly gains that include dividends. In raw terms, for calendar year 2024, the ASX 200 was up 7.5%, the FTSE 100 up 5.7%, and the S&P 500 up 23.3%.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index). The quarterly updates to the Slack Portfolio have also been completed.

Money Makes Money – and November 2024 – End of Month Update

My Dad was an amateur finance bloke and would often spend the quiet hours of the night with a notebook and reading matter that would usually have the theme of unlocking great wealth for his family. One of his sayings was:

‘Money Makes Money’ – My Dad

We were from a large family and there were always sufficient ‘outgoings’ to make sure that my Dad never really got to test the theory on his own funds. But, he believed that if only he could amass a chunk of money, then this could be invested wisely and, it would keep on growing and, he would never have to worry about money, ever again!

He had seen many examples of the rich getting richer. People with money increasing their wealth in a seemingly effortless fashion e.g. A Sydney harbourside home bought for $10 million selling for $26 million four years later. He was also a fan of Noel Whitaker and bought one of the first editions (in 1987!) of Noel’s great book Making Money Made Simple. My Dad understood the simple truth of saving more than you earn, investing these savings and letting the compounding do its work over time. Although it takes more time than harbourside investing, Noel’s advice still holds up.

I have since learned that my Dad might have got the ‘money’ quote from Benjamin Franklin who, expresses the full beauty of the compound interest process.

“Money makes money. And the money that money makes, makes money.” – Benjamin Franklin

So, it is not only the money that you invest, but all the earnings are earning too.

The one-eyed political investor

Let’s suppose you were such a committed US political investor that you only had funds in the market when ‘your president’ was in power – and, quickly withdrew your investments when the other team got in. Using 70 years of S&P 500 data shows that you might be better off if you were a Democratic investor. However, your gains would be tiny compared to the situation where you were more relaxed and just kept your money in the market – regardless of President. The lesson is, that time in the market is the key.

Investing in the US S&P 500 index from Jan 1953 to September 2024- Source Financial Synergies

It is time in the market that matters – not who you vote for!

The following pair of charts presents another way of looking at the effects of one-eyed political investing, either Democrat or Republican, over a 10-yr time frame and also, a 70-yr period. The time periods are different to the above chart and hence the different final dollar totals.

If you invested ONLY when your political party was in power, you would be much worse off.

Using S&P 500 and proxy data for 10 years and 50 years till December 2023 – Source: Steelpeak Wealth

Slack Investor has seen the shape of the green curve on the right hand side before. It echoes the hundreds of compound interest charts that I have looked at for inspiration. It starts flat and then rapidly increases with time.

“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” – attributed to Albert Einstein

Let’s say you managed to save $10 000 per year and you invested the money with an average return of 10%.

The blue line indicates the value of investing $10 000 p.a. and, compounding over 30 years. The green circle is where your interest earnings start to exceed the amount of your own money invested – Source: A Wealth of Common Sense

The brown line shows savings of $10 000 p.a., for 30 years, amounting to $300 000 of your money. The grey line represents the total compound interest on your investments. For the first 15 years you think you are getting nowhere – then the compounding kicks in with the help of time – your money plus earnings on that money plus time. Using the above assumptions, the total accumulated amount would be over $1 660 000.

The 10% earnings seems a little wishful. Although, past 30-yr averages for US shares, International shares, Australian stocks and Australian Listed property are, respectively, 11.1%, 8.2%, 9.1%, 7.8%. If your investments averaged 8% p.a., the total value of your investments would be $1 233 449 – Not Bad! However, life is not really like an Excel spreadsheet.

Slack Investor’s case study of compounding

A real-life example of compounding returns can be found in Slack Investor’s own tracking of Net Worth. He has diligently tracked his Net Worth (Assets – Liabilities) for 34 years since 1990 using the free software Microsoft Money Sunset International Edition. There is no magic in this chart – except for the miracle of compounding! As a family, we achieved a savings rate (including superannuation) that varied between 20% and 45%p.a. of take home salaries. During this time we have had home loans and have always been investing.

Slack Investor’s (+Ms SI) Monthly Net Worth Chart over the 34 years of saving and investing since 1990 – Microsoft Money

Even though Slack Investor is familiar with the concept of compounding interest – he is continually astonished with the spectacular gains in net worth over the latter years.

My Dad was right … Money makes Money! Start saving and investing now and get on this ride!

November 2024 – End of month update

Slack Investor is IN for Australian index shares, the US Index S&P 500 and the FTSE 100.

To Slack Investor’s bewilderment, in what can only be described as a ringing endorsement for Trump economic policies, the S&P 500 raged ahead by 5.7 % in November.

For the ASX 200 (+3.4%) and the FTSE 100 (+2.2%) – it has also been a great month.

Slack Investor feels it is time to tackle another valuation of the markets next post.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).