Markets are breathing a sigh of relief after yesterday's elections in Greece, with the moderate centre-right party winning enough seats to govern in a coalition with another, established pro-austerity party. At the time of writing, share markets have rebounded strongly on the positive news. Watch video here. Rick Maggi
Recent share market falls have taken some of the lustre from the stellar gains we've witnessed over the last year, although investment returns remain extraordinary to date. So is the perennial "sell in May and go away" behind the recent market correction or is there more to it than that? The following is an easy to understand three-minute video commentary (just released) from AMP Capital's Dr Shane Oliver that should help to calm the nerves... Rick Maggi. Watch Video
The 2013/14 Federal Budget will not be the most memorable. However, there are $43 billion worth of savings to, hopefully, drive the budget into a wafer-thin surplus by 2016/17. Thankfully, the superannuation tinkering did not extend any further in this Budget but re-enforced the announcements made on 5 April 2013. Again, it is important to note that, in this election year, most of the proposals announced are not yet law.
From a financial planning perspective, the Budget did deliver some amendments in the social security and family benefit payment space which may impact on some clients. The superannuation, pension and social security proposals further highlights the importance of getting good financial advice.
The following is a summary of the changes (Westmount), commentary/implications (AMP) and a video summary (MLC). Rick Maggi.
Federal Budget Analysis 2013 Commentary/Implications Video Summary
With the end of the financial year fast approaching, now is a great time to take advantage of various superannuation, insurance and tax strategies to reduce costs, save tax and streamline your finances.
Below is a useful guide to help you get there, but if you have any doubts or concerns, please contact us or discuss your personal circumstances with your financial adviser or tax specialist before taking action. Rick Maggi. Read Smart EOFY Guide
The Reserve Bank of Australia has just reduced the cash rate by 0.25% to 2.75% effective 8 May 2013. The RBA's Media Release is below. This action is in response to a slowing Australian economy (unemployment is rising, retail and government spending is falling, mining is sluggish, and taxes are set to rise).
Leading brokers are now predicting that our cash rate is headed to 2% and billionaire investor George Soros is betting that the Australian dollar will fall. Against this backdrop, interest rates are likely to continue their drift downwards, which is bad news for term deposit investors, and will probably encourage more Australians back into higher dividend yielding shares, much like the recent American experience (US markets are now trading about 4% above their all-time highs, primarily on the back of very low interest rates).
As the Australian market remains 23% below pre-GFC levels, it is quite conceivable that our markets will get a boost from falling interest rates, provided the global picture doesn't deteriorate. Rick Maggi. RBA Statement
Following the recent changes to Japan's monetary policy, AMP Capital's Dr Shane Oliver discusses it's implications for global share markets. Rick Maggi. Watch Now
A refreshing take on the new year from Vanguard's Robin Bowerman… Read Here
The Dow Jones Industrial Average soared to an all-time record high on Tuesday, passing the five-year old mark to leave behind the deep losses of the economic crisis. The positive impact on Australian superannuation and pension funds has been huge. Read More Here. Rick Maggi.
With an inconclusive election result and a general unwillingness to reform their economy, Italy's future (and therefore Europe's), is back in the spotlight, impacting on share markets and overall confidence. This is a brief report on the topic. Rick Maggi Italian Election/European Risk
This article discusses the Bank of Japan's recent decision to raise its inflation target and introduce open ended 'quantitative easing'. It sounds complicated but it is a good read and simply explained. Enjoy. Rick Maggi Japanese Reflation
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
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.
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.
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.
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
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
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.
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.
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
Last weeks EU Summit was, in many ways, a surprising success. While the noise going into the meeting was not encouraging, in the end Germany's Angela Merkel 'blinked' and agreed to a variety of measures to spur European growth, protect the Spanish banking system and lower borrowing costs. Markets around the globe are now rallying to the good news, but the road ahead is a long and twisting one. Read more here.
