Learning the lessons of 2020: An extraordinary year

When the COVID-19 pandemic hit Australia in March 2020 it brought immediate and severe financial gloom. Shares plunged 37% and the economy slumped to its first recession in nearly 30 years. However against that backdrop, 2020 turned out far better for diversified investors than initially feared. The development of vaccines became the good news of the second half of 2020...

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Economic Update and Market Commentary

Risk assets including equities and credit continued to power ahead in April. Locally, the share market and the Australian dollar were supported by rising commodity prices. Investors continued to monitor Covid cases and the pace of vaccine rollouts worldwide. Thankfully there remain very few infections in Australia, although rising numbers elsewhere has provided a reminder that the pandemic is far...

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Good news – Super contribution caps to rise

On 1 July 2021, both the concessional and non-concessional superannuation contribution limits, also known as ‘super contribution caps’, will rise. This is good news because this is the first time these limits have changed since 1 July 2017, when the concessional contributions cap was reduced to $25,000 pa for the 2017/2018 financial year and onwards. Since that time, the non-concessional...

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Saving for your child’s future

As every parent knows (even before they become one), raising a child isn’t cheap. And those expenses don’t necessarily stop once they reach 18. Parents often hope to help their adult children with significant financial milestones in life too. In this article we look at some of the main expenses for parents, how you can start saving for your child’s...

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Transfer balance cap set to increase to $1.7 million

The amount of super savings that can be transferred into a retirement pension (whether you have one or more than one) will increase from $1.6 million to $1.7 million on 1 July this year, but not for everyone. Currently you can transfer a maximum of $1.6 million from your super savings into a retirement pension (or pensions) to generate an...

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Your investment options and strategy

Building your wealth for the long term starts with a sound investment strategy. But with so many options outside your superannuation fund – from bonds to managed funds – where might you begin? Almost every type of investment come with risk Investments can help grow your money. However, there’s not only a risk associated with the various investment types, there’s...

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A family affair: Children, super contributions and SMSFs

The potential increase in members from four to six a in self-managed fund has led to many to consider about whether it is worthwhile to have children as members of the parents’ or ‘family’ SMSF. The options are: should the kids join the fund, have their own, or go elsewhere to an industry or retail fund. Let’s face it, on...

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2021-22 Federal Budget: What it means for You

As the COVID economic landscape continues to take shape, Australian Federal Treasurer Josh Frydenberg has handed down the 2021-22 Federal Budget. Among the proposed changes, he announced continuing tax relief for lower earners, help for older Australians to save for retirement and more assistance for first home buyers. Read on for a round-up of the proposals, and a look at...

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Economic Update

Introduction Volatility associated with November’s US election should finally be over, enabling investors to refocus on economic prospects and the outlook for corporate profitability and central bank policy. Joe Biden was sworn in as the 46th President of the US. The transition of power was far from smooth however, with pro-Trump demonstrators storming the Capitol ahead of Biden’s inauguration. This...

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What is risk appetite?

For some people, risk means excitement and opportunity. For others, it invokes feelings of fear and discomfort. We all experience a degree of risk in our everyday lives – whether it’s simply walking down the street or having investments in the share market. Everyone has a risk profile that defines their willingness to accept risk. It’s usually shaped by age,...

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Understanding account-based pensions

Once you decide to retire you can access your super as a lump sum or start an account-based pension (also known as an income stream) or do a combination of both. The benefit of starting an account-based pension is that it provides a regular tax-effective income during your retirement. How does an account-based pension work? An account-based pension works by...

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The A-Z of Inheritance

Inheritance is an emotional subject on every level. The people leaving an inheritance generally do it with pride and love. The people receiving an inheritance often receive it with gratitude – and sorrow. But while emotional, it’s also a financial transfer that comes with a whole range of legal, financial planning and admin issues attached. For many people inheritance is...

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Property investment vs shares

An age-old question is whether it’s better to invest in property or shares. There is actually no right or wrong answer. It all comes down to your preferences and approach to risk. Growth investments Both asset classes – shares and property – are considered to be growth investments. In other words, over time, a quality investment in shares or a...

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Four thoughts on cryptocurrency in 2021 and beyond

Some cryptocurrencies have experienced a surge in value (and interest) since the pandemic. However, there’s a long way to go before it becomes clear how to determine their fundamental value. Even the Reserve Bank is talking about cryptocurrency, having announced late last year it is exploring the potential use and implications of a wholesale form of central bank digital currency....

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Five simple but effective financial strategies for 2021

2020 may be remembered as the year we’d rather forget. The terrible health consequences and fatalities associated with the spread of Coronavirus both here in Australia and around the world has taken a heavy toll on many of us; particularly for those who have lost loved ones and livelihoods. While nothing can replace the loss of a loved one, and...

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How much super should I have at my age?

A healthy super balance is a key ingredient to living comfortably in retirement. But for many people, retirement is a long way off, and it can be hard to know if your super is on track. If you’ve ever been curious about how your super savings match up, read on to find out. How much super do I need? The...

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2021 – A list of lists regarding the macro investment outlook

Key Points: 2020 turned out far better for investors than was feared. 2021 is expected to provide solid returns and see a further rotation from pandemic winners to cyclical investments. Watch: coronavirus and vaccines; US politics; and the hit to immigration in Australia. Introduction 2020 turned out far better for diversified investors than had been feared when the pandemic hit,...

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Review of 2020, outlook for 2021 – from Pandemic to Recovery

Key points 2020 was dominated by the Coronavirus pandemic but shares saw okay returns on the back of policy stimulus and vaccine optimism, resulting in constrained but positive returns for balanced growth super funds. For 2021, the combination of massive policy stimulus and the prospect of vaccines allowing a return to something more normal by end 2021/early 2022 should see...

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Why it’s important to think about insurance ahead of retirement

If retirement’s coming up on your horizon, you’ll be keen to make sure your plans stay on track. It makes sense to concentrate on things you can control, such as insurance. Too-high premiums can chew away at the foundations of your savings, at a time when they’re more important than ever. Under-insure and one day your floor may collapse, undone...

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Economic Update

Australia: The Reserve Bank of Australia cut the official cash rate to a new historic low of 0.1%. The Treasurer released Australia’s latest Federal Budget. This was essentially a ‘no-surprises’ package of measures designed for Covid-19 challenged times. Given the scope of the challenge, the budget deficit for 2020/21 was unsurprisingly large, at $213.7 billion, or 11.0% of GDP. Even...

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How to get Aged Care at Home

Older people who are struggling to live at home and take care of themselves often face a dilemma. Many don’t want to move into aged care accommodation, but they recognise the gardening, cleaning, cooking or showering is impossible or becoming more difficult. Some worry about placing a burden on their loved ones, others can’t afford the services they need. This...

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Many Aussies in the dark about retirement

There’s always been a lot of unknowns when it comes to retirement but throw a global pandemic into the mix, and we’re feeling more uncertainty than ever before. Things we once thought of as quite certain– like being employed, getting decent returns on investments and savings, and a continual rise in house prices – seemingly changed overnight. And while that’s...

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Nine keys to successful investing

Introduction As an investor it’s very easy to get thrown off by the ever-present worry list surrounding investment markets that relates to economic activity, profits, interest rates, politics, and so on. This has been magnified by a digital media where everyone is vying for attention and the best way to get this attention is via headlines of impending crisis. This...

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Preparing for retirement during Covid-19

Timing is everything. It’s true in comedy, and it’s also the case when it comes to retirement. After decades of work, moving to the next stage of your life is a time of great anticipation. Your super is at its highest, you’ve planned for a lifetime of retirement income... and then…. 2020 happens. In the grip of the covid-19 economic...

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Responsible and ethical investing

If you’d like your money to make a difference to the world as well as to your future, ethical investing may be for you. Almost nine in 10 (89 per cent) Australians would prefer to invest in a responsible investment option that considers ethical, social and governance (ESG) issues as well as financial returns. With responsible investments now accounting for...

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What you need to know if you deferred your loan repayments due to COVID-19

With the initial six-month deferral period coming to an end, lenders have started contacting customers who deferred their home and business loans due to COVID-19. Over the next month, Aussie lenders will contact more than 450,000 borrowers to assess whether they can start repaying their loans. This includes at least 260,000 mortgage deferrals and 105,000 business loan deferrals. More than...

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Five reasons why this downturn and subsequent recovery are different

Key Points This economic downturn and recovery differs from those of the past in that: the downturn was driven by a government shutdown; fiscal and monetary support has been faster and bigger; forced asset sales have been headed off; it’s dependent on containing coronavirus; and it’s seeing more rapid structural change. As a result, we have been seeing almost “deep...

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A Joe Biden Presidency

Implications for Investors and Australia Key points: The US election has been close and final counting as well as legal challenges could still upset the result, but the now highly likely outcome is a Biden Presidency. While there is a possibility that the Democrats could win control of the Senate via runoff elections in Georgia, the most likely outcome is...

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