On hold for now...

As widely expected, the Reserve Bank of Australia decided to keep interest rates on hold this afternoon.

From an investment perspective, 6-12 month Term Deposit rates will remain around the 3.7% mark, no doubt encouraging more investors into higher-yielding, higher-risk assets such as shares and property.

While we remain very optimistic about 2014, particularly share markets, investors should avoid tinkering too much with the 'balance' of their superannuation, pension or investment portfolios, in the search for better yields in a low-interest environment. Rather than exposing portfolios to higher risk and upsetting carefully diversified portfolios in the hunt for income, investors should focus more on their portfolio's totalreturn - that is the combination of its income and capital growth.

Again, were excited about the prospects going forward, but taking a more 'holistic' view about investment returns will keep investors on track to achieving their long-term goals without taking unnecessary risks.

By the way, this is an opportune time for borrowers to take a closer look at their finance arrangements, so feel free to call us if you need an impartial second opinion. Rick Maggi (Westmount. Financial Solutions.)