Here’s what you need to know today

• Australia’s economy grew 1.8% in the 12 months to June, above the 1.4% annual rate in the 12 months to March. This was also above forecasts of 1.6%. While it is good to see Australia’s economy growing faster than expected, it is still “at a pedestrian pace compared to its historical trend”. (AFR)
  
  

• Australia’s better-than-expected GDP growth has dimmed the prospects of more interest rate cuts in the short term. With a strong jobs market, inflation ticking upwards and the economy growing faster-than-expected (albeit still slowly), the RBA is likely to not feel any pressure to act quickly.
  
  

• Former Victorian Premier Dan Andrew surprised many when he shook hands with Xi Jinping at a Chinese military parade celebrating 80 years since the end of World War Two. Former NSW Premier Bob Carr is also in China, but chose not to attend the parade. (9 News)
  
  

• The CEO of Australian Super, Paul Schroder, has unveiled plans to invest $40 billion in the Australian economy over the next five years, across housing, health, the energy transition and artificial intelligence. Schroder has advocated a model where governments initiate projects and, once built, sell the assets to long term investors like Superannuation funds. (Bloomberg)
  
  

• A US Appeals Court ruled that most of Trump’s tariffs are illegal, although the ruling allowed them to remain in place until 14 October while the Trump Administration considers an appeal to the Supreme Court. (CBS News)
  
  

• AI company Anthropic just raised US$13 billion at a $183 billion valuation. This makes the company behind the chatbot Claude one of the most valuable private companies in the world, behind SpaceX ($350bn), ByteDance ($300bn) and OpenAI ($300bn). (Bloomberg)
  
  

• Good news for Alphabet shareholders. A federal judge in the company’s antitrust case ruled that it would not have to sell its popular Chrome web browser. The judge also did not block Google making payments to third-party companies like Apple to be their default web browser. Alphabet shares were up 7% after hours on the news. (Barron’s)
  
  

• Packaged food giant Kraft Heinz will be splitting into two listed companies, with one companies focused on sauces, spreads and seasonings while the second will focus on packaged groceries. This split will unwind a Warren Buffett-backed merger that brought Kraft and Heinz together in 2015. (Capital Brief)
  
  

• Indian officials are scrambling after President Trump doubled their tariff rate from 25% to 50% as punishment for continuing to buy Russian oil. After months of negotiation, India and the US had landed on a deal for 25% tariffs, but Trump last week doubled the rate. Asked yesterday if he would consider lowering the rate, Trump replied “no” and called the trade relationship “a totally one sided disaster”. (CNBC)

What the…?

Ryanair is increasing the bonus it pays staff who catch passengers with oversized cabin bags. From November, workers will earn €2.50 per intercepted bag, up from €1.50, and the €80 monthly cap on earnings will be scrapped.

CEO Michael O’Leary said the move is aimed at deterring the small minority of rule-breakers and that he did not feel sorry for "chancers" trying to bring "rucksacks" aboard.

"We're the airline with the lowest air fares in Europe," he said. "Those are our rules. Please comply with the rules, as 99.9% of our 200 million passengers do, and you won't have any problem." (BBC)

Investing is a lifelong journey

Here’s what you can learn today.

Don’t confuse stocks with the stock market

This is taken from the Equity Mates Book ‘Don’t Stress Just Invest’ (Amazon)

Companies die, indexes are forever

When you next hear about someone losing all of the money they invested, listen closely to the story. Did they invest in a stock market index or did they invest in an individual company?

When it comes to the risk of losing money, individual companies and index ETFs are very different.

Individual companies often go bankrupt. And they go bankrupt for a variety of reasons -bad behaviour from a CEO, tough economic conditions or just a business that didn’t make sense in the first place. When an individual company goes bankrupt, shareholders rarely get their money back. If there is any money left over after the company has paid off its debts, we might get something. But don’t expect a lot. If there’s money left over, why did they declare bankruptcy in the first place?

So, when you’re investing in individual companies, you can lose everything.

Geoffrey West in his book Scale calculated that since 1950, some 28,853 companies have traded on the US stock market - and that 22,469 of those companies had gone bankrupt by 2009. That is 78% of companies that have listed on the stock market going bankrupt. Those don’t sound like great odds. But this is where individual companies and stock market indexes are different.

Indexes track a group of companies. If one company in the index goes bankrupt, it gets replaced by the next company in line. Let’s say we’re investing in Canada’s TSX 60 index, and the largest company in Canada’s index, Royal Bank of Canada, goes bankrupt. Royal Bank of Canada shares become worthless and the index falls. But then the 61st biggest company in Canada gets added to the index and the TSX60 keeps going.

Every quarter companies are added to and taken out of stock market indexes so we can be sure we’re always tracking the biggest companies. That way, as companies slow down, get smaller or go bankrupt the index just keeps on going.

Even though Geoffrey West found that 78% of companies listed on the US stock market went bankrupt between 1950 and 2009, the US stock market has grown 23,249% in that time. Or put another way, despite more than three-quarters of companies going bankrupt, each $100 invested with dividends reinvested has turned into more than $200,000.

Get Started Investing is available from all good bookstores, including Amazon 

A message from Ausbil

From 8 September 2025, the Ausbil Active Dividend Income strategy will be made available as an active ETF,  giving investors and advisers dual access to its Active Dividend Income strategy.

ASX: DIVI, an actively managed ETF, holds between 25 and 50 listed companies, which Ausbil believes support consistent franking credits for investors that grow with inflation over time. It provides regular monthly income drawn from dividends of Australian companies, whilst aiming to protect investors’ capital against inflation.

Disclaimer: Offer is subject to disclaimer on registration page. Ausbil Investment Management Limited ABN 26 076 316 743 AFSL 229722.

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