Australia still the envy of the developed world...
In light of recent comments about the state of our economy, I thought this was a refreshing article... Read more Rick Maggi.
14/08/12: If you invested $10,000 thirty years ago...
The Vanguard 2012 Index Chart
There's nothing quite like time to smooth out the rough patches and provide investors with some perspective. This chart, just released by Vanguard, shows what would have happened to a $10,000 investment made in 1982 had an investor selected either Australian shares, international shares, US shares, listed property, Australian bonds or cash. While the final result will likely surprise many, I believe the wide gap between Australian shares and cash is the standout statistic. View Chart Here
03/08/12: Will more monetary easing work?
Will Quantitative Easing Mark III be successful?
While recent announcements coming out of the US and the European have been disappointing, there is little doubt that both will need to take extra steps to bolster their economies. When this eventually occurs, will it be as effective? Read more here Rick Maggi.
27/07/12: The search for a decent yield
Oliver's Insights
The uncertain investment environment and poor returns from shares since the GFC has seen the popularity of bank deposits surge while that of shares has collapsed. With term deposit rates falling it makes sense for investors to consider some of the alternatives. This article, written by Dr Shane Oliver of AMP Capital, takes a closer look at some of the options available. Rick Maggi. Read more here
19/07/12: USA: What on earth is the "fiscal cliff"?
Yet another alarming sound-bite?
In recent weeks, US politicians and economists have been quoting the term 'fiscal cliff' in the media with increasing regularity. The coming fiscal cliff they are referring to would take effect on January 1 2013, after the US elections in November. So what exactly is it? Should Australian investors be worried? Read more here
29/06/12: Australian house prices - is the crash upon us?
Where to from here?
New home sales data released today for May by the HIA confirm that the housing market remains chronically weak right now. This article looks at the outlook for Australian house prices. Rick Maggi Read more here
28/06/12: What about the US?
Greek relief for now - but what about the US?
In addition to providing a brief update on Europe, this note (courtesy of AMP Capital) focusses on the US economy, both in terms of the slowdown evident in some economic indicators and the impending fiscal tightening from January 1 next year. Read more here
25/06/12: End of financial year checklist
Plan for the year ahead...
With June 30 fast approaching, now is a good time to review your portfolio and plan for the year ahead. And this year, there are a few time sensitive issues surrounding superannuation that you may want to pay particular attention to. Below is a useful checklist which you may want to quickly run through to ensure that you are fully prepared for 2012/13. Rick Maggi EOFY Checklist
11/06/12: Super: Big changes for over 50s
The caps come down on July 1st...
The 'concessional contributions' caps for superannuation contributions are being significantly reduced on 1 July 2012, so if you're over 50 this could impact you in a number of ways. These two articles focus of the caps themselves plus 'transition to retirement' strategies. If in doubt, please contact us before the end of June - its extremely important to get this right. Rick Maggi
01/06/12: Bond funds vs term deposits
Which is better in the current environment?
Jeff Brunton, Head of Credit Markets (AMP) discusses the benefits of bond funds in an environment of declining interest rates. Rick Maggi. View video here
16/05/12: Greeks heading back to the polls
Markets slump...
The Australian share market fell to a two-month low this afternoon, led by miners, as Greece's political leaders prepare for a second election in just over a month. Read more here.
21/04/12: Aged-care changes to aid baby boomers
Landmark aged care changes announced
The Government has released a range of proposed changes to aged care and options for older Australians.
Many of the proposals address issues raised by the Productivity Commission including (a) options to allow individuals to continue living in their home (b) contributions to the cost of care by individuals and (c) centralised areas for seeking information. At this stage there is no legislation to support the changes, so it is possible that the details may change once legislation is introduced into Parliament.
A quick video summary can be found here. For more specific details, feel free to contact Westmount. Rick Maggi
18/04/12: Tax Effective Investments - Be careful!
Be inquisitive...
As June 30 is just around the corner we are moving into the sharp end of the tax season. Tax is major headwind to any investment and everyone has the right to minimise the amount of tax they pay through legal tax planning arrangements. Indeed the after tax return is the critical measure for any investment. But sometimes the desire to reduce tax can blind people to the risks - both investment and legal - that certain tax schemes, sophisticated and otherwise, carry with them. In recent years, the collapse of a number of high-profile agribusiness and financing schemes have painfully served to alert people to the dangers of committing to tax schemes that promise upfront tax benefits and potential investment returns that ultimately never materialised. Last year, the ATO produced a helpful, plain language guide - Understanding tax-effective investments (helping you make the right decisions) on what to look out for among some of the more common types of tax schemes that the ATO has encountered that have caught out both individual investors and businesses. Cynicism often masquerades as wisdom, especially in a post GFC world, so it is important that investors don't become paralysed with fear, taking the easiest route, which is to do nothing. But doing your homework is also an important part of the risk/reward equation, so by all means be optimistic and hopeful, but don't forget to be inquisitive. In other words, don't be afraid to see what you see. Rick Maggi Read Understanding Tax Effective Investments
13/04/12: When should I retire?
A question for baby boomers...
Older baby boomers are increasingly asking themselves a short yet often difficult-to-answer question: When should I retire?
The answer, of course, can depend on many factors including health, satisfaction or otherwise with work, the availability of work, the size of a person’s retirement savings, and the outcome of discussions with spouses.
Interestingly, an article in The Wall Street Journal this month headed – “He Wants to Retire…But She Doesn’t” – suggests that many spouses do not agree about when their partners should leave the workforce.
Journalist Kathleen Hughes quotes research by a US investment fund manager which found that 62 per cent of couples surveyed disagreed with the timing of their spouse’s retirement.
The latest issue of an ABS report, Retirement and Retirement Intentions, Australia, shows that the average age at retirement of those who retired over the past five years was 61. (The average retirement age for men in this group was almost 63 compared to 60 for women.)
Not surprisingly, the ABS report shows that Australians are retiring at older ages than in the past.
Of the 3.2 million retirees aged over 45 in 2010-11 when these ABS figures were collected, the average age of retirement was 53. And of the male retirees in this group: 27 per cent had retired at under 55; 53 per cent between 55 and 64; and 20 per cent over 65.
The Wall Street Journal article and the ABS report on retirement are valuable reminders that we should carefully plan for retirement well ahead of any expected retirement date. And we should think of both the financial and social aspects of retirement – including, of course, the views of our spouses. Rick Maggi.
13/04/12: When cash is king, what does tomorrow hold?
The importance of diversification...
The Australian love affair with cash has been understandable one since the beginning of the GFC. Where else could you get a guaranteed, government backed asset paying 5% plus while all around was failing miserably? Vanguard's Robin Bowerman highlights investors to the age old 'health warning' that applies to all investments - namely that past performance is no guarantee that the future will deliver the same outcome. Rick Maggi Read here