News Updates
AS IT HAPPENS
If the need for residential aged care is nearing, following these five steps will help you make a smoother transition. Aged Care 5 Steps to Consider Aged Care, Plan Ahead For The Care You Want
For more information, contact Rick Maggi at Westmount Financial on 9382 8885.
...and sleep better.
Recent market declines have served as yet another reminder how quickly conditions can go pear-shaped.
Market volatility can be particularly stressful for retirees (and pre-retirees), who simply cannot afford to experience a sharp decline in their wealth, as they are less capable of returning to work to earn a salary in order to recover.
To make matters worse, retirees also face another set of risks - longevity (outliving their retirement funds) and inflation (the slow and steady loss of purchasing power).
So a fork in the road exists for retirees. While most would like to preserve (or even grow) their wealth steadily, many are, justifiably, unwilling to risk large declines in their portfolio in pursuit of higher returns. At the same time they are also acutely aware that persistently low returns (currently cash and term deposits) will significantly erode their retirement assets over time - a different kind of 'loss', but the same result nevertheless.
In our experience, the key to creating a successful, comfortable, low-stress retirement can essentially be boiled-down to finding the right investment mix and then staying within well-defined 'goal posts'. That's it.
By employing a number of key strategies to minimise portfolio risk in retirement, coupled with a deep understanding of your retirement goals, your personality and your values, an experienced Financial Advisor can create a retirement solution that get's the balance right, and keep's you informed and on track, so you can get on with enjoying your retirement.
For almost 40 years we've been helping people, just like you, achieve better outcomes. So if you're spending too much time wondering (or worrying) about the future direction of your retirement, don't panic, just call us for an initial discussion.
Fear of fear itself or something more fundamental?
AMP Capital's Dr Shane Oliver weighs in on the market meltdown and asks the tough questions. A must for retirees and investors looking for a calmer, mature assessment of the current climate. Read Here
As the violent market volatility continues and emotions run high, I think this article, written by DFA Australia's Jim Parker ('Outside the Flags') manages to cut through the hysteria, helping to refocus the mind on what matters most when markets go awry. A good read for investors, retirees, and anyone looking for a little perspective. Read Are We There Yet?
Many people wait until their home loan is paid off before investing more in super. However, if you are currently making more than the minimum home loan repayments, you may be better off when you retire if you make additional super contributions instead. Super or Mortgage?
For more information, contact Rick Maggi at Westmount Financial on 9382 8885.
Last year global sharemarkets were hit by a range of worries including a slowdown in Chinese growth, rising US interest rates and slumping commodities prices.
However, despite the global market sell-off over the last few weeks, we expect conditions to somewhat improve during 2016, with global growth continuing and interest rates (monetary policy) remaining highly accommodative.
Interest rates... Interest rates are expected to remain low in 2016, and in Australia they might even go lower. The reality is that growth, while improving in some quarters, is still relatively constrained.
While the US Federal Reserve may raise rates a little further, they are likely to be extremely cautious as they wouldn't want to inadvertently derail the progress being made in the US economy.
Elsewhere around the world we're likely to see further easing, particularly in Japan, Europe and China. On the home front, Australia will continue to perform below potential and that is likely to encourage the Reserve Bank to cut interest rates again.
In short, there will be a lot of incentive for investors to look beyond cash and bank deposits where returns are going to remain very low for some time. For example, global share returns are expected gain in the vicinity of 7%-9%, according to AMP Capital.
Australian property market. The Australian property market is basically slowing down. However, the various capital cities and regions have been performing quite differently from each other, with price declines in Perth and Darwin, modest growth in Adelaide, Hobart, Canberra and Brisbane, and significant strength (at least in recent years) in both Sydney and Melbourne.
The slowdown has been in Sydney and Melbourne with negative house prices and lower auction clearance rates taking hold over the last three months, primarily due to the government's push to slowdown bank lending through tougher lending requirements and higher interest rates. These factors have combined to dampen investor sentiment and the downturn is expected to accelerate into 2017. That said, we don't see a property crash coming either.
Implications for investors? The combination of okay global growth, still low inflation and easy money remains positive for growth assets. But ongoing emerging market uncertainties combined with Fed rate hikes and geopolitical flare ups are likely to cause volatility.
> Global shares are likely to trend higher helped by a combination of relatively attractive valuations compared to bonds, continuing easy global monetary conditions and continuing moderate economic growth.
> For shares we favour Europe (which is still unambiguously cheap and seeing continued monetary easing), Japan (which will see continued monetary easing) and China (which will also see more monetary easing) over the US (which may be constrained by the Fed and relatively high profit margins) and emerging markets generally (which remain cheap but suffer from structural problems).
> Australian shares are likely to improve as the drag from slumping resources profits abates, interest rates remain low and growth rebalances away from resources, but will probably continue to lag global shares again as the commodity price headwind remains.
> Commodity prices may see a bounce from very oversold conditions, but excess supply for many commodities is expected to see them remain in a long-term downtrend, so patience is required.
> Very low bond yields point to a soft return potential from sovereign bonds, but it’s hard to get too bearish in a world of too much saving, spare capacity & low inflation.
> Commercial property and infrastructure are likely to continue benefitting from the ongoing search by investors for yield.
> National capital city residential property price gains are expected to slow to around 3-4%, moving into negative territory during 2017 as the heat comes out of the Sydney and Melbourne markets.
> Cash and bank deposits are likely to continue to provide poor returns, with term deposit rates running around 2.5%.
> The downtrend in the $A is likely to continue as the interest rate differential in favour of Australia narrows, commodity prices remain weak and the $A undertakes its usual undershoot of fair value. Expect a fall to around $US0.60.
This update is published by Westmount Financial/Westmount Securities Pty Ltd (ABN 42 090 595 289/AFSL 225715). It is intended to provide general information only and does not take into account any particular person’s objectives, financial situation or needs. Because of this, you should, before acting on any information in this document, speak to us and/or a taxation/finance professional.
While as a nation we collectively face a large retirement savings gap, there are a number of smart things you could consider doing to help make sure your future financial security isn't at risk. Read more here
For more information, contact Rick Maggi at Westmount Financial on 9382 8885.
Falling oil prices are currently in lockstep with share prices, which is unusual. So understandably, plunging prices have been seen in a negative light, but is it all bad news? Is there an upside to low oil prices? AMP's Dr Shane Oliver takes a balanced look at this recent phenomenon. Read more here
When we look back at the things that helped make 2015 a great year, our warmest and fuzziest feelings come when we think of you, our client.
So thank you for choosing Westmount. Here's to another prosperous, healthy, exciting year full of possibilities!
The Westmount Team
After much delay and much warning, the Fed has finally raised the Fed Funds rate from a range of 0-0.25% to 0.25%-0.5%. The move signals confidence in the ongoing recovery in the US economy after the crippling effects of the Global Financial Crisis. More importantly, the language of the Fed was sufficiently dovish with regard to future rate hikes.
At the time of writing, the ASX200 has gained almost 100 points, on top of the previous day's 118 point rebound, and BHP shares are up over 5% - a major relief to for investors who watched the local bourse fall in each of its six prior sessions.
As the end of 2015 draws to a close, it's a good time to take a look at the year we've had, but also consider what the year ahead might look like. With the US economy accelerating, and Chinese growth slowing, we're moving into less familiar territory, potentially unnerving inexperienced and seasoned investors alike - so going forward you'll need to keep your wits about you.
AMP Capital's Dr Shane Oliver provides an excellent overview of 2015/16. Read more here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
Selling a small business can be a challenging, complicated and uncertain time. So too can retiring. Combine the two and you have a situation where early planning and advice is critical. Retiring from Small Business
For more information, contact Rick Maggi at Westmount Financial on 9382 8885.
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
Why don't the media run more good news? One view is bad news sells. If people preferred good news, the media would supply it. But markets don't see news as necessarily good or bad. Read on
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
In this article, AMP Capital's Dr Shane Oliver discusses what is on everyone's mind lately, the strong possibility of an interest rate hike in December. Is this something that should be feared or celebrated? Read more here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
The Standard & Poors scorecard, which compares active manager investment performance with index fund performance is here, and the results further validates Westmount's investment philosophy - great news for our clients. Read more here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
As broadly expected, the Reserve Bank of Australia (RBA) decided to hold off a little longer and keep interest rates steady today.
While there is a general consensus out there that the RBA stands ready to cut interest rates in the future should the Australian economy remain sluggish, the RBA wants to see more economic data filter through the system as some parts of the Australian economy are actually showing signs of life. And if the economy continues to gradually improve, the RBA will be less likely to move on rates (a good thing).
So in short, the RBA, by it's language today, is effectively saying that conditions are by no means ideal, but good enough for now.
Of course, the RBA will also be looking over its shoulder to the US, where interest rates are widely expected to rise either this or early next year.
We'll keep Westmount clients informed of any new developments going forward.
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
A record number of Australians are entering retirement and the majority have no idea how they’ll pay for it.
Over half of Australians don’t believe their superannuation fund will provide enough income for a comfortable retirement, forcing them to either work longer or find additional income sources, according to a new report by the Financial Services Council and ING DIRECT.
The report found 55 per cent of Australians believe they’ll need to work longer and draw on other assets such as property to fund their retirement. One in nine Australians are counting on an inheritance.
The report also found that workers of all ages were open to the idea of working beyond their planned retirement age in order to build enough wealth to pay for retirement, mindful that mental and physical health and access to employment were potential impediments.
It’s clear from the report’s findings that the majority of Australians don’t have any certainty or confidence when it comes to retirement and they need to start planning a lot earlier.
For many Australians, it simply won’t be possible to work well into their 70s nor do they have other assets or a wealthy benefactor to fall back on. Even those fortunate enough to have wealthy relatives can’t bank on an inheritance given Australians are now living longer than ever which increases the risk of potential benefactors exhausting most of their wealth before they die.
This conundrum highlights the importance of saving and planning for retirement early. It also highlights the need for financial advisers to help more people prepare for, and transition to, retirement.
A professional adviser can help clients work out how much income they’ll need to meet their retirement needs and goals, and put a plan in place which will maximise the chance of them achieving their goals with minimal risk.
The amount of income people need in retirement is highly individual and depends on factors such as their lifestyle and expectations. The report found around half of workers believe $500,000 is enough to fund a comfortable retirement. A further 39 per cent estimate that they need $1 million or more to achieve their retirement goals.
By comparison, the Association of Superannuation Funds of Australia (ASFA) estimates the lump sum needed to support a comfortable retirement is $640,000 for a couple and $545,000 for a single person, assuming they own their own home and receive a part Age Pension.
An encouraging takeout from the report was that consumers, particularly baby boomers, were increasingly engaged with their superannuation and keen to take control of their wealth. Baby boomers were also the most likely group to have received professional financial advice.
If you need to take another look at your retirement or superannuation, call Westmount or your current adviser, before the holiday season takes hold.
Beginning 2016 with a clear picture and an achievable retirement action plan will make for a more relaxing break and an energised start to the new year.
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
This update is published by Westmount Financial/Westmount Securities Pty Ltd (ABN 42 090 595 289/AFSL 225715). It is intended to provide general information only and does not take into account any particular person’s objectives, financial situation or needs. Because of this, you should, before acting on any information in this document, speak to us and/or a taxation/finance professional.
Australian housing remains overvalued, and the Sydney and Melbourne markets, in particular, appear to be cooling. Property investors need to be careful going forward as price falls of around 5-10% are expected in the coming year or two - a potential problem for highly indebted property owners. Read more here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
Following steep overnight falls in Europe and the US, today our own market followed suit, with the benchmark S&P/ASX200 index down a hefty 195.1 points, or 3.82 per cent, to 4,918.4 points.
So far this quarter, local markets have fallen by just over 9 per cent. So with just one day left in the quarter, it is likely to be the worst period for investors since the third quarter of 2011, when the market fell 13 per cent amid an economic crisis in Portugal, Ireland, Italy, Greece and Spain.
This time however, the explanation is an easy one to understand – China’s slowing economic growth. Over the September quarter, and especially the past two months, China's manufacturing sector has come under severe pressure.
With iron ore prices flat lining over the quarter, oil prices down and the price of copper in free-fall, it’s easy to understand why Australia’s resource sector, which is heavily dependent on demand from China, is experiencing the perfect storm.
Remember, copper is viewed as a baseline for the health of the Chinese economy because it is used heavily in industrial building, housing construction and technology.
AMP Capital's head of portfolio management Debbie Alliston said China is the key factor in plunging share prices. "Markets are reacting to fears that this going to slow global growth significantly, particularly for those countries that are reliant on Chinese demand," she said.
Weakness in the Australian banking sector, amid moves by regulators to slow lending to property investors amid soaring Sydney and Melbourne home prices, has also weighed on the share market.
On top of that are the usual worries about the timing of a US Federal Reserve interest rate hike.
But Ms Alliston said members of superannuation funds with investments in a range of assets should not panic about the market's downturn, and sit tight instead. "This is definitely not another GFC," she said.
According to another analyst, the market's heavy fall has “Australian shares looking cheap, and stock valuations are probably near the point of luring buyers back into the market, especially with interest rates set to remain low.”
We'll keep Westmount clients updated on any important developments.
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
This update is published by Westmount Financial/Westmount Securities Pty Ltd (ABN 42 090 595 289/AFSL 225715). It is intended to provide general information only and does not take into account any particular person’s objectives, financial situation or needs. Because of this, you should, before acting on any information in this document, speak to us and/or a taxation/finance professional.
Produced by Russell Investments, I'm afraid to say that this particular illustration, going back to August 1984, brings back many, many memories. Worth a quick look. View Here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.
