Australian interest rates seem likely to fall further this year. Does this mean investors should reduce their asset allocation to cash and fixed income? Falling Interest Rates In February, the Reserve Bank of Australia cut the cash rate by 25bps. In doing so, they shifted people's expectations about the future path of interest rates, which are now expected to fall further and remain lower for longer. Indeed, many other central banks have unexpect.....
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Housing Market Performance As has been the case historically, there is a significant amount of variance in performance across the nation’s capital city housing markets, with Sydney (5.8%) the key driver of value growth so far this year. In fact, only Melbourne (3.5%), Hobart (0.9%), Darwin (0.4%), and Canberra (4.1%) have recorded value growth so far this year. Values have fallen over the first quarter of 2015 in: Brisbane: 0.5% Adelaide: 0.9% .....
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Has the Australian dollar hit rock bottom?Over the past several years the Australian dollar has depreciated sharply against many other currencies. By mid-March, the A$ was down almost 30% from it's 2011 peak against the US$, and down by almost 20% against a trade-weighted basket of currencies.The DriversOur view on the Australian dollar outlook is based on the observation that the two biggest drivers since the GFC have been commodity prices and i.....
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When it comes to protecting your wealth, there are few vehicles that can rival the family trust. From a tax perspective, a family trust can start delivering you more tax-free income.But while a lot of people go into setting up a family trust with tax minimisation as a motivator, tax savings are just the beginning when you consider the peace of mind family trusts have to offer.“What makes family trusts such attractive vehicles to hold assets in is.....
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Investment Markets The global economy in aggregate is ticking along, with positive economic growth against a backdrop of low inflation. The growth, though, is quite varied across the globe – the U.S. has been leading and China has been slowing down. Central banks have cut interest rates, including in Australia. Locally, not a lot has changed, with the Australian economy still growing albeit more slowly than usual. What is of concern is that valua.....
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The commodities boom made Australia the lucky country. But rising debt and a slump in Chinese demand for resources signal tough times ahead Down Under During the boom years of the so-called commodities “super cycle” China couldn’t buy enough of everything that Australia dug out of the ground. While the rest of the world suffered from the aftermath of the global financial crisis, Australia’s economy – closely tied to China – appeared impervious, w.....
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The equity markets continue to change. It used to be that investors would buy shares directly or place their money with a funds manager, who would select stocks on their behalf. However, within the past few years the rise of passive investing using exchange-traded 'index-tracking' funds has changed the flow of money in the sharemarket. Exchange traded funds (ETFs) are transparent, easy to use and cheap. They are bought and sold on the sharemarket.....
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From time to time, equity markets will experience bouts of volatility due to a variety of reasons. Here are 10 key messages that can be used to stop you making rash moves. 1. Volatility is a normal part of long-term investing From time to time, there will inevitably be volatility in stock markets as investors react to changes in economic, political and corporate environments. As an investor, your mind-set is critical. When we are prepared at the.....
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"Where a lot of investors make mistakes, I believe, is they go looking for a quick buck and that just doesn’t happen. Whether it be property or shares, it just takes a heck of a long time to get these things to work.”Billionaire property developer Lang Walker1. Shares“It is far more important to minimise the inevitable investment mistakes than be obsessed with trying to find the tenfold investment winners.”Hamish Douglass, Magellan Group CEO, CIO.....
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Interest Rate LiftIn recent weeks many banks have started to lift interest rates on investment loans.It might seem a strange thing to do while the official cash rates is so low, but there’s a reason for it.What’s happening?The latest announcement from RBA is "rates on hold". However discretion prevails with the lenders.Many lenders including major banks such as ANZ, Commonwealth Bank and NAB have announced an interest rate rise on investor loans......
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