Market Update

Market Update

Markets are still positive and ASX on Monday went up 0.78% to 5,948.90. The Dow up slightly 0.01% to 20,658. The next few days the ASX could pass through the 6000 point barrier. Recent surveys show market confidence to be high and those surveyed show 1 in 2 believe the market will be higher in 12 months’ time. When you look at the size of the global debt at US $216 trillion, 325% of global GDP and increase of US $70 trillion in the last decade, one does get concerned and wonders if investor confidence is a little unrealistic. Unrest in the Middle East shook markets for a few days. President Trump carrying out strikes on Syria raises questions about his wider foreign policy and how he will proceed forward. Maybe its time to still be a little more conservative in our approach to investing. A rebalance of our investment portfolios could be...
President Trump’s First Week

President Trump’s First Week

First week for President Donald Trump and he has signed a dozen executive orders. Yes, it appears we are going to build that wall and maybe Mexico may pay for it or face a 20% tax on their imports. He has signed for the construction of two new oil pipelines which has been on the agenda for a decade. He has reduced the Regulatory burden on US manufacturers President Trump in his first week has received considerable criticism for his immigration policies and his trade protectionist policies. The US has had strong corporate earnings and traders on Wall Street like what they are seeing with President Trumps first week. The Dow Jones went through the 20,000 barrier. This will probably be good long term for our markets however our market this week will probably be slightly lower after trading on Friday in the US. The Market did not like some of President Trumps policies on immigration especially, and has reacted accordingly. This is what we will experience this year, the market reacting to executive orders and policies being...
Australian share market update

Australian share market update

The Australian Share Market is still showing a weak performance being down last week by 1.7%. This was mainly due again to a weak performance in source stocks. Oil prices have weakened causing the energy sector to fall 5%. We are seeing mines in the Hunter area close due to a weakness in the mining services sector, and demand falling off. Resources were off 3.2% as commodity prices weakened further. Even though we have seen little growth in the building sector, building materials also...
Market outlook

Market outlook

While the share markets have recovered from previous weeks and US stock have mostly recovered, there was a dip on Tuesday due to energy and oil prices sliding. Further, the US trade deficit rose by 7.6% in September to $43 billion from August. This was up more than expected and was due to weak exports to Europe, China and Japan. While Australian share market has recovered from previous weeks’ lows, it still seems to be basically going sideways. Australian equities gained 2.2% last week and small caps 0.7% resources as expected were flat. China it seems will not meet its 7.5% target this year. The growth rate is likely to be 7%. There is evidence that there is jobs growth. Many of China’s industries such as automation, technology and telecom are still doing well. Sectors such as housing and heavy industry are still struggling and this will impact on the Australian economy. This means we need to be cautious on commodities and...
Our obsession with property

Our obsession with property

ANZ Chief Executive Officer Phil Chronican says negative gearing is the key driver behind Australia’s “irrational obsession” with property.  Is negative gearing the driver or is it people are looking for some diversification in their investment portfolios? With the Australian Share Market going nowhere, you can understand their thinking. Some Australians have always liked property. Is it irrational and is it negative gearing that drives this so call irrational obsession? I have to question that. Each of the assets classes go through cycles and have their day. Isn’t that why we diversify our...
Important social security changes from 1 January 2015

Important social security changes from 1 January 2015

If you are currently in receipt of an income support payment (age pension, disability pension, NewStart, Carers payment), or are eligible to receive this payment before 1 Jan 2015, you may be affected by the new rules. It may be beneficial for you to commence an account based pension prior to 1 Jan 2015, or at least review your situation so that you can receive the most beneficial treatment for your situation. If you are in receipt of an income support payment and you have commenced an account based pension prior to 1 Jan 2015, then the current rules will be grandfathered (i.e. no change to your situation). The new rules state that from 1 January 2015, account-based pensions that are not grandfathered will be treated as financial investments for Centrelink purposes. This could result in you being tested under the income test and may result in a smaller Centrelink payment. Currently account-based pensions are treated quite favourably for the income test whereby a portion of the income that you receive from your account based pension is considered a return of capital and therefore does not form part of your assessable income for Centrelink purposes. What you could do: Refresh existing account-based pensions (particularly relevant where you have an SMSF). Review account-based pensions and consider the benefits of consolidation. Review the current provider/platform of your account-based pension and ensure it is still appropriate. Commence an account-based pension. Consider adding a reversionary beneficiary, where appropriate, to extend grandfathering status after the death of the primary beneficiary. We need to consider the age of your spouse or dependent and any impact...