Market update...
The Chinese share market has fallen dramatically in recent months. So what does this mean for you? Read more here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
06/07/15: Greece after the "no" vote
Should you be worried?
As generally expected, the "No" vote won the day, with over 60% of Greeks rejecting further 'austerity' measures. So clearly it's back to the negotiating table, for now. So what does this mean for investors going forward. Read more here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
18/06/15: Tax concessions and tax reform in Australia
A well balanced commentary...
As house prices rise and/or when economic activity slows, the inevitably cries for tax reform can be heard from both sides of politics. This note focuses on the debate around the four major "tax concessions" in Australia - negative gearing, capital gains tax discounts, dividend imputation and, of course, superannuation. Read more here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
03/06/15: The Australian economy...
Where are we headed?
As local markets slide and interest rates fall, it would be easy to assume that Australia's fortunes have taken a sudden turn for the worst. That would be a mistake. Read more here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
27/05/15: Super Co-contribution: Are you eligible?
Still worth it...
The Government's superannuation co-contribution for lower income earners seems to shrink by the year, but it's still worth the effort. Read here for more information.
Or if in doubt, call us on 9382 8885 before June 30th.
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
21/05/15: Don't look back - what drives potential returns?
A medium term view...
AMP Capital's Dr Shane Oliver discusses the thinking behind their investment projections, and offer some interesting insights for the medium term.
This is an excellent read for retirees and investors - a little technical in parts, but worth persevering. In the end, I think the most important takeaway is that we should have reasonable return expectations going forward, and watch your asset allocation more than usual. Please call me if you have any questions.
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
20/05/15: EOFY strategies to consider, right now...
A checklist
With just over a month to go, and the Federal Budget behind us, now is the time to prepare for the end of the financial year. Created by AMP, this is an excellent link for those clients needing a checklist. As you would expect, it's AMP-centric, but the fundamentals are universal. As always, feel free to call me personally if you'd like to take a closer look at your personal situation. Read EOFY checklist
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
07/05/15: 'Wealthier' retirees to take a hit
Age Pension eligibility tightens...
This morning, the Social Services Minister, Scott Morrison, announced a plan that targets wealthier retirees by reducing the threshold at which part pension cuts out.
Currently, couples can own $1.15 million in assets on top of their family home and still qualify for the part pension. However, starting in 2017, that threshold will be reduced to $823,000 for couples.
To help compensate, the assets test threshold (for the full pension) will be increased from $286,500 to $375,000 for couples who own their own home.
If passed, it is estimated that about 91,000 people will no longer qualify for the Age Pension, while another 235,000 will have their pension reduced.
While we anticipate a significant number of our clients being adversely impacted by this proposal, the bulk of retirees (across Australia) will either see no changes to their pensions, or will receive a small boost.
Thankfully, the Government also stated that the family home would not be included in the asset test, and that those affected by the tighter pension rules will be guaranteed access to the Commonwealth Seniors Health Card, which provides the same concessional access to pharmaceuticals as given to those on the pension.
I'll keep you posted of any further developments.
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
13/05/15: 2015/16 Federal Budget
Just the facts...
Last night the Federal Government handed down the Budget for the 2015-16 year, and as foreshadowed, the Budget contained relatively few surprises, with a number of announcements made in the previous weeks.
Of course the most notable announcement impacting clients were the 2017 Age Pension changes and the ‘no new superannuation taxes’ commitment I highlighted last Friday (click here for another copy).
Self-managed super funds also dodged a bullet with no mention of implementing proposed changes to limited recourse borrowing arrangements.
The Government appears to be banking on small business to lead the recovery and has set out a series of generous new tax concessions for businesses with turnovers of less than $2 million. These include a drop in the corporate tax rate to 28.5 percent, immediate tax deductions of up to $20,000 for capital expenses, and FBT exemptions.
Primary producers also do well, regardless of their size with generous depreciation concessions for fencing, water rights and fodder.
So where is the sting in this Budget?
The Government has been careful in its targets. Rather than increasing taxes, the Government has focused on loopholes where there is a clear argument for ‘fairness’.
For example, Multi-national companies who avoid paying tax on business profits in Australia are in the firing line, and GST will be extended to imported digital products and services.
Also, fly-in fly-out (FIFO) clients may lose the zone tax offset, and caps will apply to salary sacrificed meal and entertainment expenses for employees of charities, hospitals and public benevolent institutions.
For a more detailed summary of the Federal Budget Click here.
Even better, feel free to call me personally if you’d like to know whether this year’s budget is likely to impact on you personally.
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
12/05/15: Correction time?
Or something worse?
The last few weeks have seen the investment scene hit another rough patch. So is this just a seasonal glitch or something more sinister in the making? Read more here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
12/05/15: The interest rate wheel
It doesn't need to be difficult...
Forecasting interest rates is a tough job. Even when you get it right, there's no guarantee the market will react as you expect. The good news is you don't need to be able to forecast rates to earn the returns from fixed interest. Read more from Jim Parker
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
08/05/15: Words of wisdom from two old pros
Quotes to invest by...
With interest rates at an all time low, many cash investors are now, somewhat reluctantly, being forced to consider alternatives. But with this comes some danger and discomfort.
At 81 and 94, Warren Buffett and Charlie Munger have earned the market's respect through performance, but they've also earned the appreciation of the broader investment community through their willingness to share what they've learned and how they've been so successful.
So it seems timely to revisit some of their more famous quotes and advice...
Warren Buffett:
“Time is the enemy of the poor business and the friend of the great business.”
"Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years."
“I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”
“Price is what you pay; value is what you get.”
Charlie Munger:
“When any guy offers you a chance to earn lots of money without risk, don't listen to the rest of his sentence. Follow this, and you'll save yourself a lot of misery.”
“People have always had this craving to have someone tell them the future. Long ago, kings would hire people to read sheep guts. There's always been a market for people who pretend to know the future. Listening to today's forecasters is just as crazy as when the king hired the guy to look at the sheep guts.”
I'm not sure that I entirely agree with Charlie's last point, but I'm happy to give him due deference.
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
06/05/15: Treasurer vows no super tax changes
Encouraging news
As the Federal Budget moves ever closer (next Tuesday evening), the rumour mill is working overtime, so it was encouraging to get some clarity from Treasurer Joe Hockey this morning, with regard to possible tax changes on superannuation. Read more here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
05/05/15: Interest rates cut
A record low...
Today the Reserve Bank of Australia (RBA) finally decided to take the plunge and reduce the cash rate by 25 basis points to 2.00%, a record low.
This wasn't a huge surprise as economists this morning were factoring in a 78% chance of a rate cut today. Interestingly, the RBA provided no outlook statement for interest rates going forward, so unless the Australian economy deteriorates significantly from here, this could be the last of the rate cuts. We'll see.
At the time of writing, the Australian share market was initially up 1.1%, however has since fallen into negative territory as the Australian dollar, surprisingly, went up in defiance of the interest rate cut.
While this is welcome news for borrowers, the decision will put more pressure on investors, particularly retirees, with significant cash/term deposit holdings - interest rates are low and will stay low for some time to come. If you need income, it's time to consider your options.
On a different matter, the Federal Budget will be announced next Tuesday night (12 May) and, as usual, the rumours have been flying fast and furious, from superannuation to negative gearing to pensions.
Our advice is to ignore the background noise. Typically, the lead up to every Federal Budget is a showcase of worse case scenarios and general fear mongering, coming from both side of politics, usually leading to fairly unspectacular, watered-down announcements on the night.
We'll distill the budget details into a simple, easy to understand report for our clients soon after budget night, once we've had a chance to thoroughly weigh-up the proposals on the table. More importantly, we'll contact you individually should there be anything important to discuss.
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
10/04/15: Australian home prices and interest rates
Where are we headed?
The interplay between falling interest rates, the Australian dollar and housing demand is a complex one. While the RBA would dearly love to see our dollar fall, rising house prices, particularly in Sydney and Melbourne, isn't part of the script. So what happens if, as widely expected, interest rates are cut again in the coming months? Another interesting read from AMP's Dr Shane Oliver.Read more here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.