Welcome to 2010!
The working year has officially started. The kids are back at school and the holidays now seem a distant memory. In Style Magazine (North) which will be out next week, look out for our article on how to obtain TAX FREE Education funding for your children.
In the past couple of weeks we have been busy meeting with fund managers and getting their views on the economy and where their funds are heading in the coming 12 months. The consensus is that we did manage to avoid a recession and actually the last 6 months of last year where quite solid from a returns point of view. We are entering the company reporting season and to date there have been some good profit upgrades, notably Commonwealth Bank and Flight Centre to name a few. What has become apparent is that the quality managers have outperformed when the share market has been down.
Institutions and cautious investors still have a lot of money on the sidelines waiting to reinvest. We believe this will only drive the share market forward. As shown with last week and into this week, the Australian Share market is taking its lead from Wall Street. President Obama will release his State of Union Address tonight, outlining what he wants to achieve in government for the next 12 months and into the future. He has been focusing on cleaning up the practices on Wall Street, which currently have very little regulation. We see this as a good sign. Although, being able to implement his vision might be a different story. Australian banks survived the GFC due to our regulatory environment and an improving US financial system will be a long rocky process which will help prevent future meltdowns.
We have updated our market return graphs in the office, which clearly show the bump of the past 18 months. Next time you are in the office, make sure you have a look. If you haven’t been in for a review in a while, feel free to call Rachel to schedule a time. We’re more than happy to see you to update and review your circumstances.
We have analysed our investment and super model portfolio over the past 7 years and it has still returned 9.81%pa after fees. This is within our long term investment return range. This includes the last 18 months of turmoil.
Be aware, the media over the weekend and into next week will be all about Interest Rates, will they or won’t they rise and how this rise will affect you! One needs to remember the long term average of interest rates is around 7%. Where we consider gearing strategies, all of our modelling and projections are based on interest rates being between 9 - 11%. If you cannot afford the cost at these levels, it may not be the strategy for you. With most home loan lenders variable rates are between 6.00-6.75% which we can expect a rise over the long term. Remember sensational headlines sell newspapers and advertising space.
If you are in the market or know someone who is the market for purchasing a new home, we are pleased to announce we now have a conveyancying service added to our list of services we can offer clients. We have discounted rates with Kelly Lawyers on Racecourse Rd, Ascot to provide a professional client orientated service when it comes to the legals of buying and selling your property. Don’t forget Richard from Lion Financial is also downstairs in our office that can take care of your lending needs.
Finally, a note to all the males – Valentine’s Day is coming! Don’t forget! If you are planning on taking your special lady for lunch or dinner, have a look at the restaurants on Racecourse Rd, Baguette, Lido, Vagelis, to name a few. But make sure you book ahead.
Information contained in this document is General Advice and does not take into account any person's particular financial objectives, situation or particular needs. Before making a financial decision based on this advice you should consider, with or without the assistance of a financial adviser, whether it is appropriate to your particular financial needs, objectives and circumstances.
