05/05/12: Federal Budget 2012

What the Budget means for the economy and investors...

Last night's Federal Budget contained only a few surprises as many of the measures had already been legislated pr pre-announced. The main winners were lower income earners, families and the elderly. Below is a summary of the budget measures ('Budget Wrap') plus two videos from Dr Shane Oliver which discuss the implications from and economic and market perspective. The main proposals which may affect you, our client, include

(1) the deferral of higher contribution caps for individuals aged 50 and over - in other words, everyone will be limited to $25,000 in concessional contributions for 2012/13;

(2) reduced tax concession on concessional contributions where annual income exceeds $300,000;

(3) the company tax rate cut has been abandoned;

(4) a range of means testing arrangements for social security benefits.

If you have any questions regarding the budget, don't hesitate to contact me personally.  Rick Maggi

Budget Wrap

What does it mean for the economy? (video)

What does it mean for investors? (video)

21/04/12: Aged-care changes to aid baby boomers

Landmark aged care changes announced

The Government has released a range of proposed changes to aged care and options for older Australians.

Many of the proposals address issues raised by the Productivity Commission including (a) options to allow individuals to continue living in their home (b) contributions to the cost of care by individuals and (c) centralised areas for seeking information. At this stage there is no legislation to support the changes, so it is possible that the details may change once legislation is introduced into Parliament.

A quick video summary can be found here. For more specific details, feel free to contact Westmount.  Rick Maggi

18/04/12: Tax Effective Investments - Be careful!

Be inquisitive...

As June 30 is just around the corner we are moving into the sharp end of the tax season. Tax is major headwind to any investment and everyone has the right to minimise the amount of tax they pay through legal tax planning arrangements. Indeed the after tax return is the critical measure for any investment. But sometimes the desire to reduce tax can blind people to the risks - both investment and legal - that certain tax schemes, sophisticated and otherwise, carry with them. In recent years, the collapse of a number of high-profile agribusiness and financing schemes have painfully served to alert people to the dangers of committing to tax schemes that promise upfront tax benefits and potential investment returns that ultimately never materialised. Last year, the ATO produced a helpful, plain language guide - Understanding tax-effective investments (helping you make the right decisions) on what to look out for among some of the more common types of tax schemes that the ATO has encountered that have caught out both individual investors and businesses. Cynicism often masquerades as wisdom, especially in a post GFC world, so it is important that investors don't become paralysed with fear, taking the easiest route, which is to do nothing. But doing your homework is also an important part of the risk/reward equation, so by all means be optimistic and hopeful, but don't forget to be inquisitive. In other words, don't be afraid to see what you see.  Rick Maggi  Read Understanding Tax Effective Investments

18/04/12: IMF expects solid Australian growth

Good news...

Today, the International Monetary Fund (IMF) kept a broadly upbeat outlook on Australia's economy. Read more here  Rick Maggi

13/04/12: When should I retire?

A question for baby boomers...

Older baby boomers are increasingly asking themselves a short yet often difficult-to-answer question: When should I retire?

The answer, of course, can depend on many factors including health, satisfaction or otherwise with work, the availability of work, the size of a person’s retirement savings, and the outcome of discussions with spouses.

Interestingly, an article in The Wall Street Journal this month headed – “He Wants to Retire…But She Doesn’t” – suggests that many spouses do not agree about when their partners should leave the workforce.

Journalist Kathleen Hughes quotes research by a US investment fund manager which found that 62 per cent of couples surveyed disagreed with the timing of their spouse’s retirement.

The latest issue of an ABS report, Retirement and Retirement Intentions, Australia, shows that the average age at retirement of those who retired over the past five years was 61. (The average retirement age for men in this group was almost 63 compared to 60 for women.)

Not surprisingly, the ABS report shows that Australians are retiring at older ages than in the past.

Of the 3.2 million retirees aged over 45 in 2010-11 when these ABS figures were collected, the average age of retirement was 53. And of the male retirees in this group: 27 per cent had retired at under 55; 53 per cent between 55 and 64; and 20 per cent over 65.

The Wall Street Journal article and the ABS report on retirement are valuable reminders that we should carefully plan for retirement well ahead of any expected retirement date. And we should think of both the financial and social aspects of retirement – including, of course, the views of our spouses. Rick Maggi.

13/04/12: When cash is king, what does tomorrow hold?

The importance of diversification...

The Australian love affair with cash has been understandable one since the beginning of the GFC. Where else could you get a guaranteed, government backed asset paying 5% plus while all around was failing miserably? Vanguard's Robin Bowerman highlights investors to the age old 'health warning' that applies to all investments - namely that past performance is no guarantee that the future will deliver the same outcome.  Rick Maggi  Read here

13/04/12: Some encouraging modern history...

March quarter foreshadows strong returns ahead...

In this brief article, filled with positive messages, Elm Capital's John Robertson takes a look at the strong start to 2012 and what we might expect for the remainder of 2012, based on modern history.  Let's hope he's right. Enjoy!  Rick Maggi  Read here

02/04/12: Protect your wealth and stay on track

It's important to get the right advice...

Your hard work has built a great lifestyle, and a big future, for yourself and your family. But with this hard work comes the responsibility to protect everything you’ve achieved against sickness and injury.

As financial advisers, we specialise in helping people protect their financial independence with life insurance and income protection. So if you can’t work because of a serious injury or accident, your family has the financial support they need to maintain the lifestyle you enjoy today.

Finding the right solutions should be simple and straightforward. So if you’d like some advice on how you can get the cover you need, contact us today.  Rick Maggi

02/04/12: April 2012 Snapshot

Today's cost of living: it's a mixed bag

Few dinner table conversations pass without some mention of the high cost of petrol at the local bowser, hikes in gas and electricity prices, or the cost of fruit and vegetables - it's almost a national pastime.   Rick Maggi

Inflation (Flash Version)     Inflation (PDF Version)

22/03/12: Mining boom to shift into overdrive

$60 billion export surge

The pay-off from the surge in resource investment is at hand, with rapid growth in export volumes now evident and set to continue for the next 5 years, far outweighing any weakness in prices. Read more here.   Rick Maggi

14/03/12: Dow Rises to Highest Level Since 2007

Good news...

US stocks advanced strongly again, sending the Dow Jones up over 200 points, to the highest level since 2007, well past 13,000. Read more here

30/03/12: Shopping for advice

ASIC's 'Shadow Shopper' survey is in...

In this article, Vanguard's Robin Bowerman discusses the recent shadow shopper survey results and what it all means.  Rick Maggi Shopping for advice

08/03/12: Investing with an eye on the big market cycles

Where are we in the economic cycle?

AMP Capital's Dr Shane Oliver explains where we are in the investment cycle and implications for investors. This is an informative and easy to understand video (approx 9 min) and it reinforces the importance of getting the right mix of assets or 'asset allocation' in your investment or superannuation strategy. Enjoy!  Rick Maggi   Watch video here

24/02/12: Low return world ten years on...

...and what does it mean for investing?

This article, yet another from Dr Shane Oliver, will be interest to all investors, superannuation, pension and wealth accumulators alike.  Rick Maggi  Read Oliver's Insights

22/02/12: Europe seals Greek bailout

Default averted, but risks remain

Please read on for information about the new deal.  Rick Maggi Wall Street Journal

17/02/12: Greece & Europe: What are the risks?

What's the risk of a disorderly default and euro break-up?

Utterly exasperated, many would now like to see Greece immediately comply or leave the Eurozone. This article looks at the risks and potential impact. Rick Maggi  Read here

13/02/12: Warren Buffett: Why stocks beat gold and bonds

Warren Buffet

At a time when many investors have become jaded and cynical about shares, often tempted to run to the relative 'safety' of cash or bonds, Warren Buffett's shareholder letter explains why it may pay too be a little more patient. Enjoy. Rick Maggi  Read article here

07/02/12: Rates left on hold

The Reserve Bank has shocked the markets and homeowners by deciding to keep rates on hold at 4.25 per cent.

Despite overwhelming pressure for a rate cut the RBA has adopted a more conservative "wait and see" approach after two consecutive rate cuts last year.

The Australian dollar shot above $US1.08 immediately after the RBA announcement and the stock market shed 35 points as investors digested the surprise move. The RBA board judged the setting was "appropriate" as growth was close to trend, lending rates were close to their medium term average and inflation close to its target level.

Clearly, the RBA has left the door wide open for future rate cuts, depending on whether global and local economic conditions deteriorate much further.    Rick Maggi

03/02/12: Dow and S&P500 have best January since 1997

Some good news...

It's the best start in 15 years. In what was mostly a slow and steady climb, the Dow Jones Industrial average rose 3.4 per cent in January and Standard & Poor's 500 gained 4.4 per cent, the best performances for both indexes to open a year since 1997.   Rick Maggi  Read more here

18/01/12: 2012 and beyond - a list of lists

Oliver's Insights

As always, AMP Capital's Dr Shane Oliver provides an excellent, easy to understand overview of markets and the economy. This will assist investment, superannuation and pension clients to formulate their strategies and expectations going forward. Enjoy!   Rick Maggi Oliver's Insights