Olivers Insights
An excellent overview of 2012 and a refreshingly bold attempt to map out the next twelve months, by AMP Capital's Dr Shane Oliver. Take a close look at the table of investment returns and forecasts. Enjoy! Rick Maggi
05/12/12: RBA cuts cash rate to 3%
But the song remains the same
While the RBA once again loosened monetary policy in December, the Bank continues to see a silver lining on every economic cloud and is yet to acknowledge that the Australian economy is entering a much more difficult environment now that mining investment has peaked. While many believe that the RBA will ultimately be forced to cut the cash rate to 2%, it seems pretty clear that the RBA still remains hopeful that the rate cuts it has already undertaken will be sufficient to revive growth. As such, it appears that until there is irrefutable proof that mining investment has peaked, or that unemployment is rising sharply, the RBA will remain a reluctant rate cutter, as indeed it has been over the past year. Rick Maggi Update: Since the 25 basis point cut yesterday, most of the major banks have since cut their loan rates by about 20 basis points.
20/11/12: November Market & Economic Update
November 2012 Economic Update (Easy Reading)
AMP Capital's Dr Shane Oliver presents a brief market and economic snapshot. Enjoy. Rick Maggi. Market & Economic Update
06/11/12: Rates on hold in November
Interest rates left on hold for now
The Reserve Bank has elected to leave official interest rates on hold at 3.25 per cent, defying economists bets on a Cup Day cut. A survey of 27 economists by financial news service Bloomberg had 20 tipping a rate cut. However, the RBA has elected to break a six-year streak of moving interest rates on the first Tuesday in November.
The decision keeps the cash rate just above a low of 3 per cent that it dropped to in 2009 during the peak of the economic fallout from the Global Financial Crisis. The general view is that the RBA, always vigilant to fight off inflationary pressures, is taking a wait and see approach as the US economy slowly recovers and China's economy begins to stabilise.
Australia now has the highest interest rates of anywhere in the developed world. While lower interest rates would be a welcome development for borrowers, retirees will benefit from today's decision. But it's also important to note that very low rates is a sign that conditions have deteriorated - never a good thing So i think today, along with the Melbourne Cup, is a good day to celebrate.
31/10/12: Is the mining boom over?
CommSec Video (3.36min)
In this addition, CommSec comments on the mining sector and whether the mining boom is actually over. Enjoy! Rick Maggi. Watch video here
20/10/12: Viewpoint: Jim O'Neill
Jim O'Neill, Chairman of Goldman Sachs...
Below is a brief global economic update (China, US, UK & Eurozone) from the Chairman of Goldman Sachs, Jim O'Neill… Viewpoint with Jim O'Neill
16/10/12: Managing super in challenging times
Your questions answered...
The last few years since the GFC have been difficult for investors - each time share markets take a step forward, changes in the global economy pull them back. Paul Clitheroe joins AMP Capital's Dr Shane Oliver to provide their views on where share markets are placed and how to navigate the period ahead. Also included is a link on the Eurozone (easy reading). Enjoy. Rick Maggi.
25/10/12: What does the US election mean for markets?
Dr Shane Oliver discusses forthcoming US elections...
The US elections are only a few short weeks away and the polls have Mitt Romney and Barack Obama neck and neck. This video explores the potential consequences of either a Romney or an Obama win. Watch video here
02/10/12: RBA cuts interest rates
25 basis point cut...
The Reserve Bank has cut interest rates by 25 basis points, taking the official cash rate to 3.25 per cent. More here. Rick Maggi
19/09/12: Q&A on QE3
What is it? Why do it?
AMP Capital's Dr Shane Oliver discusses the potential consequences for investors and retirees of the US Federal Reserve's recent decision to commence another round of 'quantitative easing'. This is an easy to understand article, well worth a quick read. Enjoy. Rick Maggi. Read more here.
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
29/07/12: Have shares lost their appeal?
History is on the side of shares.
After several years of poor performance, is the "stocks for the long term" still valid? Are long term investors right to sit tight? Or is this downturn different? Read more here Rick Maggi
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
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
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.
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 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
13/04/12: Some encouraging modern history...
March quarter foreshadows strong returns ahead...
In this brief article, filled with positive messages, Elm Capital's John Robertson takes a look at the strong start to 2012 and what we might expect for the remainder of 2012, based on modern history. Let's hope he's right. Enjoy! Rick Maggi Read here