The key points are as follows:
Starting point valuations – like yields and price to earnings ratios – are key drivers of medium-term investment returns.
For growth assets it’s often more complicated, with the level of interest rates playing a big role.
At present, valuation starting points for term deposits and bonds have improved. For shares they suggest constrained return potential from US shares but are better for Australia.
Money and working in Australia
Budgeting and saving
Spending and paying bills
Spending and paying bills
Superannuation
Insurance
Beware of scams
Tax in Australia
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Review your annual super statement to keep track of your super
Check your personal details are correct
Check your contributions
Review your investments and fees
Review your insurance and beneficiaries
Consolidate your super
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Are you looking to build up your savings for the future but don’t know how or where to start? Check out these money-saving tips you can apply today.
Top 10 money saving tips
1. Record all expenses.
2. Plan your meals.
3. Save water and electricity.
4. Declutter and sell.
5. Skip the credit card.
6. Make coffee at home.
7. Create a grocery list and stick with it.
8. Bring your own bottle of water.
9. Purchase what you can in bulk.
10. Invest in timeless fashion.
The “news” as presented to us has always had a negative bent, but one could be forgiven for thinking that it’s become even more negative with constant stories of disasters, conflict, wrongdoing, grievance and loss. Consistent with this it seems that the worry list for investors is more threatening and confusing. This was an issue prior to coronavirus – with trade wars, social polarisation, tensions with China, worries about job loss from automation and ever-present predictions of a new financial crisis. Since the pandemic higher public debt, inflation, geopolitical tensions and rising alarm about climate change have added to the worries. These risks can’t be ignored, but it’s very easy to slip into a pessimistic perspective regarding the outlook. However, when it comes to investing the historical track record shows that succumbing too much to pessimism doesn’t pay.
Key points
– The natural human tendency to focus on bad news, the increased availability of information and the rise of social media are magnifying perceptions around worries and making it easier to be pessimistic.
– However, to succeed as an investor it makes sense to err on the side of cautious optimism: otherwise, there is no point in investing; growth assets like shares have trended up over the long term; and trying to get the timing right of the 2 or 3 years out of 10 when they fall can be very hard.
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5 key considerations when looking at insurance for professional services:
1. Professional Indemnity Insurance
2. Cyber Insurance
3. General Property Insurance
4. Building and Contents Insurance
5. Business Interruption Insurance
Retirement Planning Tips:
1. Tailor Your Strategy to Your Time Horizon
2. Eliminate Debt as a Priority
3. Invest in Your Health
4. Overreliance on Social Security
5. Neglecting Inflation Consideration
6. Failing to Budget for Medical Expenses
Read full article here.
Key points
- China’s economy is slowing not helped by a property collapse and longer-term structural constraints around poor demographics and threats to productivity growth.
- China needs to save less and spend more, and this requires significant fiscal stimulus. So far policy stimulus has been tepid, but a more forceful response is likely.
- Chinese shares are cheap but short-term risks are high.
- The risks around China’s outlook mean Australia can’t rely on the China/commodity boom indefinitely.
Read full article here
Outgoing Reserve Bank Governor Philip Lowe has highlighted Australia’s weak productivity growth and noted that boosting it “should be the issue that dominates economic discussion”. So why is boosting productivity so important? And why is it seen as so hard to do? It’s worth having another look at it given its importance to our economy and investment markets.
- The last 20 years have seen a slump in productivity growth in Australia from over 2% pa to less than 1% pa. This has curtailed growth in living standards and real wages. It will adversely affect asset class returns if allowed to persist.
- Policies to boost productivity growth include: labour market reforms; more skills training; more infrastructure spending; increased housing supply; deregulation; and tax reform.
- Unfortunately, the political pendulum has moved against many of the policies necessary to boost productivity.
Read full article here.
Over the last 18 months, there has been much talk of recession globally and more recently in Australia. But, despite mild technical recessions (ie, two consecutive quarters of falling GDP in a row) in the US and Europe in the last 18 months, growth has generally been more resilient than expected and now with inflation falling many have started to give up on recession with increasing talk of Goldilocks (ie, where growth is okay and inflation is falling). So, have we dodged the recession bullet?
Key points:
Rapid monetary tightening points to a high risk of recession and, given lags in the way it impacts the economy, just because it hasn’t happened yet does not mean it won’t.
However, a combination of falling inflation, a lack of excesses beyond inflation, excess household saving, the possibility of rolling sectoral recessions & strong population growth (in Australia) mean we could still avoid recession.
We remain of the view that shares will do well on a 12-month horizon, but the risks around recession and higher bond yields mean that the risk of a correction is high.
Key points
For nearly 30 years Australia had benign economic cycles so the current environment may be a bit of a shock for many.
Still low unemployment and still high inflation despite slowing economic growth are not that unusual because they both normally lag big swings in the economic cycle.
The RBA and other central banks need to tread carefully and allow for the lags from the rapid rise in interest rates to work through - lest they end up pushing unemployment for higher than they need to in order to return inflation to target.
Read full article here
The article link below updates seven key charts worth watching in assessing the investment outlook. The key points are as follows:
Shares are at risk of a short term pull back and volatility will likely remain high on central bank and recession risks.
However, we remain reasonably upbeat on a 12-month view as falling inflation takes pressure off interest rates.
Seven key charts worth keeping an eye on remain: global business conditions PMIs; inflation and our Inflation Indicators; unemployment and underemployment; inflation expectations; earnings revisions; the gap between earnings yields and bond yields; and the US dollar. So far so good.
Read full article here
Lodge online with myTax
You can lodge your return using myTax, the ATO's free online tax return. You need a myGov account linked to the ATO to lodge online. Returns lodged this way are usually processed within two weeks.
Lodging with myTax is easy and free. Most information from employers, banks, government agencies and health funds will be automatically included in your tax return by late July. You just check the information is correct, enter any income that isn't included, add any deductions you have, and then submit. MyTax will then calculate your tax for you.
The ATO has 'how-to' videos to help you lodge online using myTax.
Click here to read the full article.
Alert: Suspicious website – Do not deal with www.cambridgeassetmanagement.com
The operators of www.cambridgeassetmanagement.com are promoting various investment plans in leveraged financial products on the website. The operators do not have an Australian financial services (AFS) licence and are not authorised to operate a financial services business in Australia.
Key points
ASIC is alerting investors about suspicious ‘investment opportunities’ offered on www.cambridgeassetmanagement.com. The website is allegedly run by a Hong Kong entity, Cambridge Asset Management, that is operating out of Hong Kong.
The operators of the website are not licensed to provide financial services in Australia. That means Australian consumers are not protected.
ASIC is not associated with the operators of www.cambridgeassetmanagement.com and will never ask you to pay tax to withdraw your investment funds
Click here to read the full article.
Contracts for difference (CFDs)
CFDs let you speculate on short-term market movements. Like foreign exchange rates, share prices, stock market index levels, cryptocurrency rates or other underlying assets. Most people lose money trading CFDs.
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Shop around
Don’t take on too much debt
Allow that interest rates go up and down
Contact your bank if struggling with a mortgage
Seek advice regarding fixed versus variable rates
Allow for rainy days
Credit cards are great, but they deserve respect
Use your mortgage for longer term debt
Start saving and investing early
Plan for asset prices to go through rough patches
See big financial events in their long-term context
Know your risk tolerance
Make the most of the Mum and Dad bank
Be wary of what you hear at parties
There is no free lunch
Read full article here
The key points are as follows:
After the rough ride of 2021-22, the last financial year turned out to be a good one for investors as shares rebounded thanks to falling inflation and hopes rates are near the top.
Shares are at risk of a pull back as central banks remain hawkish and recession risks are high. However, returns over the next 12 months should still be reasonable as falling inflation takes pressure of central banks enabling rate cuts.
The past financial year provides yet another reminder of just how hard it is to time investment markets – with shares rebounding just when everyone was most gloomy about inflation and interest rates. The key as always is to adopt a long-term investment strategy and turn down the noise.
Read full article here
Upskilling and Reskilling: Strategies to Increase Employability
In a fast-paced, evolving work environment, continuous learning and adaptability are paramount to dealing with unemployment and in building and succeeding in one’s career.
Employees and employers alike need to embrace upskilling and reskilling strategies to meet market demands and enhance staff employability.
Click here to read the full article.
Learning From Bananas: Insights Into Stocks and Bonds as Investments
In the world of investing, stocks and bonds often take centre stage. They represent two of the most common types of investments, each offering unique benefits and risks. As an investor, understanding stocks vs. bonds is key to building a diversified portfolio tailored to your financial goals.
Just like bananas, stocks and bonds in the financial market fluctuate in price over time, and these price movements can offer valuable insights into investing strategies.
Stocks vs. Bonds — the Basics
When you invest in stocks (aka equities), you’re buying a small piece of a company. As a shareholder, you stand to benefit from the company’s success in the form of an increased stock price and potential dividend payments.
Bonds, on the other hand, represent debt. Investing in bonds means you’re essentially loaning money to a corporation or government entity for a specified period. In return, you receive regular interest payments. At the end of the term, the bond issuer repays the principal.
Whether stocks or bonds are “better” depends on your personal financial goals, risk tolerance, and investment timeline.
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Life is unpredictable, and financial surprises can arise when you least expect them. This is where an emergency fund comes in
1. Determine your goal amount.
2. Start small.
3. Make saving for it automatic.
4. Allocate windfalls and unexpected savings to your emergency fund.
5. Review and adjust your goal amount periodically.
6. Keep it accessible but separate.
Read full article here.
Retirement is the perfect time to transform your passion into a profitable venture. With your own business, you’ll be free to work on your own terms and follow your dream.
Here’s how you can embark on this exciting journey.
1. Align your business idea with something you’re passionate about.
2. Evaluate market demand.
3. Develop a business plan.
4. Build a robust financial strategy.
5. Network and market your business.
6. Embrace flexibility and lifelong learning.
Please read full article here.
How investments are taxed
Lower tax on your investments can help you reach your financial goals sooner. But don't choose an investment based on tax benefits alone.
How investment income is taxed
Positive versus negative gearing
Tax-effective investments
Investing and your tax return
Ponzi schemes
Ponzi schemes are investment scams that pay existing investors with funds collected from new investors. There is no real investment.
Warning signs of a Ponzi scheme
How Ponzi schemes work
What to do if you have invested in a Ponzi scheme
Read full article here.
Shares are vulnerable to a pull back in the months ahead reflecting the rising risk of recession on the back of central bank tightening and weak seasonal influences.
Falling inflation should enable central banks, including the RBA, to start easing from later this year or early next providing some support for share markets.
Share market falls are painful for investors but the best approach for most is to stick to a long-term strategy.
Click here to read the full article.