The emergence of the COVID-19 pandemic became an economic event of extraordinary scale across the world. In response to the economic effects of COVID-19, in March 2020, the Reserve Bank implemented unconventional monetary policy measures in Australia, joining central banks in other advanced economies.
Click here to view an outline of these measures
As we’ve seen recently growth assets like shares have periods of bad short-term performance versus bonds & cash. But they provide superior long-term returns which is essential to grow retirement savings. It makes sense for superannuation to have a high exposure to them.
The best approach is to simply recognise that super and investing in shares is a long-term investment
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In March and April 2020, a whole range of payments have been announced for Australians looking for financial relief as a result of the COVID-19 pandemic and economic crisis. Click here to find out how you could benefit from the Federal Government’s economic stimulus package.
With weeks, and perhaps months, of self-isolation ahead, many of life’s conveniences like streaming and delivery services will become our essentials. But if you’re used to spending unlimited amounts to make life that little bit easier, now is a good time to look at what you can live without to make your budget go further.
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The federal government has announced early access to super as one of their measures to support people experiencing financial hardship during the COVID-19 pandemic. However, there are things to consider when you access a lump sum from your super early, including ramifications, playing catch-up, and other options.
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The unprecedented disruption caused by COVID-19 has left may coping with redundancy. Find out how you can best prepare yourself financially and emotionally for being off work, and whatever may come next, by clicking here
The recent JobKeeper initiative is a wage subsidy paid to eligible employers, who may receive $1,500 per fortnight per eligible employee.
Please click here to find out more
Along with the horrible human consequences, the coronavirus pandemic is having a huge impact on the way we live, and as a result, investment markets. This note provides a simple Q&A for most of the main issues from an economic & investment perspective.
Significant government support is essential to enable parts of the economy to successfully hibernate;
This will be financed by borrowing and is affordable, given Australia’s relatively low public debt and low borrowing rates;
Central bank support to keep financial markets functioning properly is also essential and quantitative easing is part of this; and
We are more likely to see a U-shaped recovery than a V or L.
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To assist people adversely financially impacted by the coronavirus, the Government has passed laws to allow eligible people to access up to $10,000 of their superannuation in financial year 2019-20, plus a further $10,000 in the period between 1 July and 24 September 2020 in financial year 2020-21.
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One of the latest Government initiatives to help keep businesses afloat is the recent $1,500 JobKeeper subsidy. Employers will be paid a subsidy of $1,500 per fortnight per employee if they meet certain criteria. Click here to read more
Released on 22nd March 2020, the second round of government stimulus package includes:
early release of superannuation - individuals in financial distress may be able to access up to $10,000 of their superannuation in this financial year, and the next ;
temporary reduction of pension draw down rates for this financial year, and the next;
deeming rates have been reduced;
supplements increased, access extended and eased; and
bankruptcy safety net
Click to read more about what the stimulus package includes for individuals and businesses.
There has been a significant increase in Australians being targeted with COVID-19 related scams and fishing emails. These phishing emails are often sophisticated, preying on people’s desire for information and imitating trusted and well-known organisations or government agencies.
Click here to read more about these scams, and how to avoid them
Women’s superannuation is not so super. At retirement, Australian women on average have $157,050 whereas men have $27,0710 - a gap of $113,660, according to data released by the Association of Superannuation Funds of Australian in 2018.
There’s no easy fix for the problem, but women should consider the following steps - Read more
Morningstar
Investors in shares must expect market shocks as part of the long-term benefits of owning part of a company, and on average over time, stock markets fall one year in every five. History provides a valuable guide to how markets normally recover from shocks, showing the missed opportunities of exiting equities and not re-entering.
Shane Oliver, Head of Investment Strategy and Chief Economist.
The attached note looks at the plunge in share markets over the last week. The key points are as follows:
Share markets have fallen sharply on the back of coronavirus concerns.
Shares may still have more downside and the uncertainty around the coronavirus crisis is very high, but we are of the view that it’s just another correction.
Key things for investors to bear in mind are that: corrections are normal; in the absence of recession, a deep bear market is unlikely; selling shares after a fall locks in a loss; share pullbacks provide opportunities for investors to buy them more cheaply; while shares may have fallen, dividends are smoother; and finally, to avoid getting thrown off a long-term investment strategy it’s best to turn down the noise during times like this.
Can you guess the top mistakes that people make with their finances? Financial planning professionals discuss the most common mistakes that see.
At the 2019 FPA Congress, Money & Life Team asked financial planners what their key financial advice is for Australians in 2020. The most common answer? Ask more questions! Whether it’s something you don’t understand or something that sounds too good to be true, planners say the best thing you can do for yourself and your finances is ask. Watch the video for more advice on how you can best handle your finances.
Shane Oliver, Head of Investment Strategy and Chief Economist
The attached note takes a look at the worry list for investors, which is currently focussed on coronavirus, and how to turn down the noise around investing. The key points are as follows:
The coronavirus outbreak, while horrible from a human perspective, is just another of a long list of worries for investors.
Our natural inclination to zoom in on negative news combined with a massive ramp up in the availability of information is arguably making us worse investors: more fearful, more jittery, more short-term.
Five ways to help manage the noise and turn down the worry list are: put the latest worry in context; recognise that shares return more than cash in the long-term because they can lose money in the short-term; find a process to help filter noise; make a conscious effort not to check your investments so much; look for opportunities that investor worries throw up.
Many of us have debts and bills to manage, but what happens when you’re really struggling to pay? Find out what to do when you fall behind with bill or loan payments and what to expect if you don’t.
The key points are as follow :
What to do if you can’t pay
Accessing super to pay debts
What can happen if you don’t pay
What to do about debt recovery
How long can debts last?
Shane Oliver, Head of Investment Strategy and Chief Economist.
The attached note looks at five charts worth keeping an eye on regarding the global investment outlook. The key points are as follows:
Shares are at risk of a short-term correction or consolidation after a strong run over the last year and with sentiment now very bullish. However, this year should still see good returns for investors as global growth edges up and interest rates remain low.
Five key global charts to watch are: global business conditions PMIs; global inflation; the US yield curve; the US dollar; and global trade growth.
So far so good, with PMIs improving a bit, inflation remaining low, the yield curve steepening, the $US showing signs of topping and the US/China trade truce auguring well for some pick up in world trade growth.