INSIGHTS

As you know this year has been turned upside down by the COVID-19 pandemic. The global and local economy has been dealt a hammer blow with a force not seen before and we are unlikely to return to a pre-COVID environment anytime soon.

There have been a couple of rounds of economic stimulus announced by the Government, to help us cope with the economic and social displacement caused by the Coronavirus. These measures are designed to assist people suffering hardship and include early access of superannuation, temporary reduction of superannuation minimum drawdown rates, and a reduction in social security deeming rates.

There are of course a range of business measures for owners and employees alike, such as cash flow assistance, JobKeeper payments and more, in addition to possible loan repayment relief.

The dramatic fall in share prices over the past few weeks has generated much media coverage and uncertainty around of the effects of the coronavirus on individuals, supply chains and the broader economy. This is understandable, given the rapid fall in shares of around 15%, but let’s put things into perspective.

We are of the view that this event is just another correction, although share prices may still have more downside.

What is a lumpy asset and how do you begin to manage the issues and risks around having a large, dominating asset in your SMSF portfolio? A “lumpy asset” is an asset that cannot be acquired in small increments, but must be obtained in large, discrete units.

We regularly design investment portfolios for clients, considering their unique circumstances, individual requests, needs and objectives, as well as specific investment selection criteria like valuation, balance sheet health, earnings growth, governance, and overall quality. Below are some of the common circumstances, considerations and life events that are associated with the different stages of your personal and financial life and what we can do to ensure your portfolio’s optimal performance.

Wow, there sure is a lot of noise in the financial media these days. There is nothing like a bit of fear mongering and misuse of information to stir up a bit of chaos and confusion. Is any of this news actually useful and what does it all mean?

A lot of recently published articles on the economy might be ‘newsworthy’, but lack perspective and rarely rationally discuss the long-term implications.

Since the start of this calendar year, and certainly since the Federal election, the topic of interest rates, and what direction they will move in, is always popular at social and business functions. Maybe it’s an easy topic for small talk, as everyone has an opinion and people are really interested in knowing (or guessing) the movement up or down and which central bank will be next to cut.

In the current state of economic uncertainty, with the Banking Royal Commission, record low interest rates, and conflicting views about the health of our economy, some consumers are tempted to ‘throw the baby out with the bath water’ and hide their retirement savings under the mattress, instead of seeking financial advice. It’s a shame, because research shows that having a dynamic, productive relationship with a trustworthy, experienced and independent financial adviser helps improve wealth.

One of the positive outcomes from the Royal Commission is the cost of managing investments. The cost of investing in superannuation, or other investment vehicles, is coming down.

As we head into the federal election, one of the more contentious policy announcements has been the removal of refunding franking credits, in certain circumstances.