News Updates
AS IT HAPPENS
The decision about whether to take super benefits as a lump sum, superannuation pension or both as a lump sum and a pension is a key financier issue. But be careful, funding your retirement requires serious resources… Read more here Rick Maggi (Westmount. Financial Solutions.)
Since 1950 the average cyclical bull market in Australian shares lasted 48 months with a 126% gain. The current bull market has gone for 28 months with only a 37% gain. So where are we now in the cycle? Are we heading into a bear market already or is there more growth to come? Read on… Where are we now? Rick Maggi (Westmount. Financial Solutions.)
Overnight the US Federal Reserve announced that it will begin carefully and slowly scaling back its massive stimulus program next month. It is the central bank's first step towards winding back the stimulus that has helped the US recover from its worst recession since the 1930s and a sign that the US economy is recovering.
In response, the US share market surged by almost 2% and at the time of writing, local markets are up by about 1.5%. Our local currency immediately dropped to 88.18 US cents but then quickly recovered to 89.45 US cents as investors digested the news. Most importantly, this should be viewed as good news. AMP Capital's Dr Shane Oliver discusses the implications for investors here. Rick Maggi (Westmount. Financial Solutions.)
It's that time of year again where we can take a look at the year that was, and then look forward to the next twelve months. Read more here Rick Maggi (Westmount. Financial Solutions.)
AMP Capital's Dr Shane Oliver looks discusses the potential consequences of a deflationary spiral versus rising inflation on your hip-pocket. Enjoy. Read more here Rick Maggi (Westmount. Financial Solutions.)
An effective 'salary sacrifice' strategy now could be the key to getting more from your super in the future. Read more here Rick Maggi (Westmount. Financial Solutions.)
The strong growth in the prices of many Australian shares over the past year is attributable, in part, to the buying of yield-hunting investors. A number of high-yielding financial stocks, for instance, are trading at or near to record highs.
Predictably, in the prevailing low-interest environment, many investors are now turning to more concentrated portfolios of high-yielding shares in an effort to maintain their investment yields and their lifestyles. But, unfortunately, this pursuit of yields comes at the cost of undertaking a higher level of risk for an investor's overall investment portfolio.
Rather than exposing portfolios to higher risk and upsetting carefully diversified portfolios in a hunt for income, investors should focus more on a portfolio's total return – that is the combination of its income and capital growth. With this approach, investors in need of more income than produced by a portfolio draw an amount taken from their portfolio's total return, taking into account cash-flow and capital appreciation.
In this way, investors can remain on track to achieving their long-time goals without upsetting their portfolio's diversification and without taking greater risks. Rick Maggi (Westmount. Financial Solutions.)
The corporate regulator has issued a warning about SMSF spruikers who are encouraging consumers to invest in residential property via the National Rental Affordability Scheme (NRAS).
“ASIC is aware that a number of SMSF promoters include misleading statements in their ads about the grants that may be available under NRAS,” said the regulator.
The NRAS offers property investors direct payments and tax offsets for building and leasing to moderate income earners at a rate that is 20 per cent below market value.
“ASIC has seen ads stating that consumers can use their superannuation to purchase a property using the scheme and receive ‘$100,000 tax free’,” said the statement.
The regulator said the advertisements do not provide balanced messages about the “features, benefits and risks” of investing in an NRAS property via an SMSF.
The advertisements fail to mention that the eligibility to participate in the scheme is subject to restrictions; there are fees associated with purchasing, tenanting and managing NRAS properties; to receive a total financial incentive of $100,000 consumers need to remain in the scheme for 10 years; consumers will be required to rent out the property at 20 per cent below market value to eligible tenants, said the Australian Securities and Investments Commission (ASIC).
The regulator noted that if consumers purchase an NRAS property through an ‘approved participant’ there is no requirement for the incentives to be passed on.
In addition, any contractual arrangements should be checked to ensure the relevant NRAS-approved participant will comply with all legislative requirements, said ASIC.
ASIC commissioner Greg Tanzer said consumers need to be cautious when approached with an offer that appears too good to be true.
“ASIC is focused on protecting consumers and where we see people recommending consumers invest using their SMSF, we want to ensure they are providing balanced messages that comply with the law,” he said.
“It is important that ads are clear, accurate and balanced, especially when consumers are looking for investments for their long-term retirement,” said Mr Tanzer. Rick Maggi (Westmount. Financial Solutions.)
