Australia’s superannuation system is often held up as a model of success in the developed world. However Franklin Templeton's 2019 Retirement Income Strategies and Expectations (RISE) Survey found that Australians facing retirement are anxious about whether their savings will last the distance. In fact, 70% of pre-retirees feel that they are behind on saving for retirement.
Five reasons why I am not so fussed about the global outlook
Dr Shane Oliver, Head of Investment Strategy and Economics and Chief Economist.
The attached note looks at five reasons why I am not so fussed about the global outlook. The key points are as follows:
There is no denying concerns about global debt, seemingly never ending QE, more debt trading on negative interest rates, inequality & geopolitical threats.
However, some of these concerns are exaggerated and there are five reasons why I am not so fussed about the global outlook. In particular, there is good reason to expect a pick-up in global growth over the next 12 months. This should help underpin further gains in share markets over the next 6-12 months.
Aged care: Dispelling the myths
Six practitioners answer some commonly asked questions about aged care advice. The key questions are as follow :
Q1. Why did you decide to offer aged care advice?
Q2. How do you start the aged care conversation?
Q3. How did you market your aged care service?
Q4. Has aged care advice grown your business?
Q5. What does your business model look like?
Q6. How do you charge for aged care advice?
Q7. What would you do differently if you were just starting your aged care advice business?
Q8. Can you share a client story that illustrates the value of aged care advice?
Ethical investment mythbuster
We’ve been managing money in line with our Ethical Charter for 33 years and our track record speaks for itself. But despite the strong performance of the ethical investment sector we still hear the same old arguments. Here are some of the most common myths about ethical investment - busted!
The key points are as follow :
MYTH #1 – Ethical investing means sacrificing returns
MYTH #2 – Limiting the investable universe increases risk
MYTH #3 – Divestment achieves nothing
MYTH #4 – What is considered ‘ethical’ changes constantly
What are shares
Ever contemplated investing in shares but don’t know where to start?
The key points are as follow :
How do shares work?
How to trade shares?
Why are shares a great wealth-generating strategy?
What are the most common investment strategies?
A safer approach
Five good reasons for seeking financial advice
Financial advice isn’t just for people with wealth. Whether you’ve set your sights on owning a home or retiring early, advice from a financial planner can help you make it happen.
The key points are as follow :
Buying a home
Starting a family
Providing for your family
Getting rid of debts
Enjoying your retirement
More 21 great investment quotes
Shane Oliver, Head of Investment Strategy and Chief Economist.
The world of investing can be confusing and scary at times. But fortunately, the basics of investing are timeless and some investors (often the best) have a knack of encapsulating these in a sentence or two that is insightful and easy to understand. In recent years I've written several insights highlighting investment quotes I find particularly useful. Here are some more.
What is a Power of Attorney?
Just as having a Will ensures assets are managed properly when you die, a Power of Attorney allows someone else to look after your finances when you’re unable to. Phillip Richards, Director of Endorphin Wealth Management explains more about what’s involved in having a Power of Attorney and why you’d be wise to have one, just in case.
The key points are as follow:
What is a Power of Attorney?
Why would I need a Power of Attorney?
Who can be my Power of Attorney?
How do I go about making a Power of Attorney arrangement?
Five great charts on investing for income (or cash flow)
Shane Oliver, Head of Investment Strategy and Chief Economist.
The attached note looks at five great charts on investing for income (or cash flow). The key points are as follows:
The collapse in interest rates has made it harder for many relying on interest on bank deposits for income.
These five great charts help illuminate key aspects of investing for income (or cash flow): there are alternatives to bank deposits for income; the gap between yields on different assets provides a guide to relative value; shares can provide stronger growth in income with less volatility than bank deposits; a high and sustainable income yield from an investment provides security; and yield is a guide to future returns.
How to plan for travel in retirement
For many, retirement is the perfect time to explore the world. For World Financial Planning Day 2019, we talked to Nathan Nash CFP® about how he’s helping clients #planwell2livewell by getting the balance right between travel goals and everyday living expenses.
The key points are as follow:
Looking at all the numbers
Flexible income options
Do away with debt
Get set for travel
Going solo in retirement
With divorce rates rising among couples aged 55+, more people could find themselves going it alone in retirement. We explore the pros and cons for your lifestyle and finances and speak to Dianne Kemp about her experience of planning for retirement after divorce.
The key points are as follow :
The financial impact of divorce
Retirement, then divorce
The pros and cons of independence
Making the most of a settlement
Navigating changes and opportunities
Making sense of Medicare and your tax obligations
This article talks about :
Who pays what?
Rebates for private health insurance
What exactly is the lifetime health initiative?
Will the world slip up on oil again? – after oil prices spike as attacks disrupt Saudi production
Shane Oliver, Head of Investment Strategy and Chief Economist.
The attached note takes a look at the risk posed to the global and Australian economies from the spike in oil prices. Key points are as follows:
Oil prices have risen over the last few days reflecting drone attacks that impact 6% of world oil supply.
The choke point for global growth from higher oil prices is normally a doubling in prices. We are a long way from that just yet. Key to watch will be how long the supply disruption lasts, whether there are more attacks and retaliation from Saudi Arabia and the US.
A significant spike in Australian petrol prices would pose a further threat to consumer spending and growth in Australia, adding to pressure on the RBA to ease further.
Volatility: 10 key messages for investors
The attached note takes a look at the 10 key messages to help investors steer their portfolios through volatile times. The key points are as follows:
Volatility is a normal part of long-term investing
Over the long term, equity risk is usually rewarded
Market corrections can create attractive opportunities
Avoid stopping and starting investments
The benefits of regular investing stack up
Diversification of investments helps to smooth returns
Invest in quality, dividend-paying stocks for regular income
Reinvest income to increase total returns
Don’t be swayed by sweeping sentiment
Active investment can be a very successful strategy
Australian house prices back from the abyss - seven things you need to know about the Australian property market
Shane Oliver, Head of Investment Strategy and Chief Economist.
The attached note takes a look at the outlook for the Australian residential property market. The key points are as follows:
The Australian housing market remains far more complicated than optimists & doomsters portray it to be.
Yes, it's expensive and heavily indebted but talk of mortgage stress is overstated & it's been undersupplied.
The combination of rate cuts, the election and a modest regulatory relaxation have helped turn property prices back up, but the upswing is likely to be constrained.
Estate planning – when should I start?
Money & Life bring you expert insights from Chris Morcom CFP®, Director of Hewison Private Wealth and Bernie O’Sullivan, Principal at Bernie O’Sullivan Lawyers on why an estate plan is so important and when you should make a start on yours.
The wallet challenge – savings and budget checklist
Budgeting and savings might sound very basic, but many people find it difficult to get these fundamentals right, or don’t have these in place at all. Here are some tips to help you get started, and on the right track to building your personal wealth.
The key points are :
Have a plan
Learn to budget
Be smarter about your costs
Become more disciplined
Better manage your debts
Get advice
Nine reasons why recession remains unlikely in Australia
Dr Shane Oliver, Head of Investment Strategy and Economics and Chief Economist, AMP Capital.
The attached note looks at the risk of recession in Australia. The key points are as follows:
Australian growth is likely to remain weak over the next year. Expect further monetary & fiscal stimulus.
However, while the risks have gone up, recession remains unlikely: tax cuts should help growth in the current half year; the threat from falling property prices has receded; infrastructure spending is booming; the low $A is helping growth; the drag from falling mining investment is over; the current account is in surplus; there is scope for extra fiscal stimulus; population growth remains strong; and cyclical spending is low.
Negative rates, QE & other measures the RBA may deploy – why? will it work? what would it mean for investors?
Dr Shane Oliver, Head of Investment Strategy and Economics and Chief Economist, AMP Capital.
This article talks about the negative rates, QE & other measures the RBA may deploy :
The key points are as follow :
The RBA is likely to first exhaust conventional easing by cutting the cash rate to 0.5% by year end before deploying unconventional measures beyond forward guidance which is already being used.
Unconventional monetary policy measures could help the economy, but negative interest rates are unlikely and quantitative easing would be most effective and fairest if combined with fiscal stimulus.
For investors it means low interest rates for even longer.
Craig James's Economic Update
CommSec
Attached is Craig James’s economic update, taking into account Australia’s resilience through challenging times, giving a quick snapshot into how the Australian economy is currently tracking.
The presentation touches on:
Inflation, unemployment and interest rates
Spending, wages and prices
The gig economy
First home buyers market
Interest rates and the dollar