Hedges Asset Planning in North Adelaide, South Australia | Financial planner

Hedges Asset Planning

Locality: North Adelaide, South Australia

Phone: +61 8 8267 2000

Address: Suite 1, 54 Melbourne Street 5006 North Adelaide, SA, Australia

Website: https://hedgesassetplanning.amp.com.au/

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25.01.2022 The Energy Project Shaking Up Global Alliances.. In 1981 President Ronald Regan imposed sanctions on the Soviet Union. It was in response to a plan to create a pipeline from its vast gas fields into an energy-hungry Western Europe. 40 years later history is repeating itself. The Nord Stream 2 natural gas pipeline is an $11.2 billion project that connects Russian gas fields, under the Baltic Sea, direct to Northern Germany (see pic below). ...Continue reading

24.01.2022 August falls wont be the last for Australian housing market. According to CoreLogic, house prices in Australian capital cities declined by 0.5% in August, their fourth fall in a row and a record that stands in stark contrast to their steady gains between June last year and April. Average prices have now fallen 2.5% since that peak; however, the pace of decline has slowed in comparison and five of those eight cities recorded flat or rising prices in August. A tale of two ci...Continue reading

24.01.2022 January construction numbers hit by lower migration and non-residential weakness............... One of the features of this extraordinary period in our economic history has been the extent to which timing has affected certain indicators. Building approvals, for example fell by 19.4% in January (consensus expectations were for a 2% decline) off the back of a huge rise in December, in which housing approvals reached record highs. Building approvals are a volatile series even in... normal years, and it’s worth noting that despite this weakness in January, they are still up 39% year-on-year. December’s results were largely due the anticipated withdrawal of the Federal Government’s HomeBuilder package, which was ultimately extended until March, as well as a $10,000 drop in the payment to a total grant of $15,000. It is likely that the January’s poor performance was in turn affected by a fast tracking of applications in order to meet the December deadline. Units lag detached housing approvals : Within these figures a sharp disparity has emerged between house and unit approvals. In January, detached house approvals were down 12.2%, but still up 38% on last year; unit approvals were down 39.5% - to the lowest level recorded since January 2012 - and also down 22.7% compared to a year ago. Unit approvals have actually been following a downward trend since the last residential construction boom in late 2017. Demand in semi-detached dwellings is typically reliant on migration, and border closures have acted as a drag on the sector since the beginning of the pandemic. Prior levels of over-building in inner-city apartments across the major capital cities have also contributed to this lacklustre performance. On the bright side, investor housing finance increased by nearly 10% through January, up 22.7% on a year ago, which, given that investors own two-thirds of apartment stocks (compared to one-quarter of houses) this should bode well for future construction in the sector. Demand for detached dwelling approvals is likely to remain strong over coming months. HomeBuilder has had a significant influence on new housing construction, and the extension of the program until March should continue to boost new housing demand over the period. Non-residential construction remains a concern............... Outside of residential activity, news for the construction sector is less positive. Non-residential building approvals fell by 16.3% in January, down by more than 30% over the past twelve months, which is something of a worrying sign given the need for increased business investment in Australia over the rest of the year. Uncertainty around the future of office and retail space, along with general uncertainty about the full recovery of the economy, are in all likelihood affecting future investment in the space. However, if the broader economy continues to rebound there should be some expectation for non-residential construction to eventually follow suit.

24.01.2022 Have a property in your SMSF? COVID-19 relief could be on the table As the COVID-19 pandemic continues to affect our lives, SMSFs are impacted by its financial consequences. Not only do we see the downturn in share markets worldwide, but related or third parties who have leased property from SMSFs may end up having to default on rent. But what can be done where a business has been required to shut its doors or there is a huge drop in business? Rent relief for tenants?...Continue reading

23.01.2022 Here’s peace of mind, when you and your family need it. Talk to us about TAL or one of the other many insurers we recommended to protect your lifestyle, family and needs #insurance #lifestyle #family #children #insuranceagent

23.01.2022 We here at Hedges Asset Planning have worked with clients through the many market corrections such as the current COVID-19 correction, the 2018 Global Stock Market Downturn, the GFC, SARS, the Stock market downturn of 2002, the Dotcom meltdown, 911, the Asian financial crisis to name a few If you have any questions or concerns, whether if you are a client or not, please contact us anytime We are here to help. But as always, the view for investments in growth assets such as property or shares, can be explained in the picture below

22.01.2022 What could the lasting impacts of COVID-19 be? Lets assume for a moment that we are able to contain the outbreak in Victoria and any clusters in New South Wales in the coming weeks. Throw in also the possibility of an effective vaccine emerging, and theres good cause for optimism about the prospect of life returning to a new normal sometime next year. Im going to stress the word new, however, because while weve been hiding out, working from our kitchen tables, the world...Continue reading

22.01.2022 Fiscal cliff or fiscal slope? Refreshed stimulus measures and the Australian economy One of the big learnings from events in history, The Great Depression, is that tightening the purse strings during a financial crisis can serve to put the brakes on the economy. In that sense, stimulus becomes one of the vital mechanisms to keep the economy ticking, until it can start to function normally on its own. With that in mind, its hard to over-play the importance of income support ...measures. For example, we estimate that were it not for JobKeeper, the effective unemployment rate would be over 15% versus what it currently is at 11.3%. As speculated and expected, the federal government has confirmed it will extend its JobKeeper and JobSeeker programs, which were originally scheduled to end in September. Even though the cost of continuing these stimulus measures may appear immense, income support is essential to sustain economic activity and prevent the unemployment rate from rocketing. What the refreshed package looks like : The JobKeeper payment has been extended to 28 March 2021, but with payments stepping down from the current rate of $1,500 per fortnight to: $1,200 per fortnight between 28 September 2020 and 4 January 2021; and then to $1,000 between 4 January and 28 March 2021 for those who worked 20 hours or more per week in February this year; and to $750 per fortnight then $650 for the same periods for those who worked less than 20 hours per week in February 2020. For JobSeeker, the supplement will be extended from 25 September to 31 December 2020, but at the reduced rate of $250 per fortnight (down from $550) with reinstated means testing but an adjusted-income taper test. This takes the daily payment under JobSeeker down to $57.90 (compared to the pre-coronavirus level of $40). Implications for the Australian economy The Government estimates the cost of extending JobKeeper to be $16 billion and the extension to the JobSeeker supplement at $3.8 billion. This combined with an extra $2 billion of Federal spending on apprentice subsidies and JobTrainer announced last week means a total extra stimulus of $22 billion, or 1.2% of GDP. The numbers are big, but they serve to both support the economy and prevent a fiscal cliff, which could have otherwise occurred from October if the income support programs had abruptly ended. With this softening and staging down, that fiscal cliff is looking more like a fiscal slope.

22.01.2022 The Worlds Factory Is on the Ropes {Chinas} days as the worlds factory are done. - That is the conclusion that the worlds largest electronics manufacturer has come to. Foxconn which is famous for assembling iPhones (among other devices) has conceded that Trump has won his trade war. Going on to state that:...Continue reading

20.01.2022 Exploring growth and value in an essential sector The mining services industry seems to have a favourable macro backdrop, earnings growth and cheap valuations. While the macro side was very shaky for a few months through the COVID-19 pandemic, the sector actually has become even more positive given Chinese stimulus and record low interest rates, leading to even higher gold and iron ore prices. Despite some COVID-19 hiccups on the operating side, most mining services compan...Continue reading

20.01.2022 Separation of super at the end of a relationship When a relationship ends, splitting and rebuilding super can be difficult, especially if it happens later in life. Here are some things to know and things that may help make a fair and reasonable division of super. Family law and superannuation: - In the event of a relationship breakdown, the treatment of super is governed by the Family Law Act 1975, which generally applies to relationships including married, formerly marri...Continue reading

20.01.2022 Remember Brexit? An important deadline looms for the UKs economy. The COVID-19 pandemic has overshadowed the progress of the Brexit negotiations, but a disorderly exit for the UK could send shockwaves through its economy. The mid-year deadline to extend the transition period for the UKs exit from the EU from 31 December 2020 is rapidly approaching. The transition period importantly allows for current trade arrangements to stay in place until December 31 this year, while...Continue reading

19.01.2022 What do Julys strong building approval numbers say about Australias growth prospects? Building approvals in Australia surged by 12% in July, up 6.3% compared to a year ago. This was a much stronger result than consensus expectations of a fall in the order of 2%, and follows a run of better than anticipated numbers since Aprils low point. As an important leading indicator of national construction activity, and with implications for the lending sector as well, this is someth...ing of an encouraging sign for economic growth over the coming quarter. That said, approvals are still well below their pre-COVID levels, which were already declining before the pandemic hit our shores. The outperformance was led in large part by multi-density approvals (such as, apartments), which rose by more than 20%, against 8% for house approvals. Non-residential building data remains extremely volatile, with the value of approvals down by 19.8% in the June quarter, on the heels of a 20.7% rise in the prior month. Looking through this monthly volatility, the trend for last few months shows a demonstrable weakening. Construction contributes about 8% of Australian GDP, and the sectors woes were responsible for 0.6% of the countrys contraction in gross value added through the June quarter. A sustained recovery construction would be positive news for Australias path out of recession, but there are a number of complicating factors. First, restrictions on movement in Melbourne will continue to constrain the number of workers on construction sites in that city over the next few months at least, and potentially delay the entry of new projects into the pipeline. Its worth noting that the July approval numbers pre-date Victorias state of disaster declaration and further tightening of COVID-19 restrictions at the beginning of August. Second, drastically lower migration rates are dampening demand for housing and will likely affect investment in the sector whilst our international borders remain closed. Third, consumer and business confidence will be tested by eventual shifts in unemployment that will accompany the phase-out of government assistance packages in 2021, and flow-on effects to investment in construction projects are entirely possible. Weighing against each of these factors will be the effectiveness of the governments HomeBuilder program, which was designed to stimulate residential construction, and which should benefit alterations and approvals construction in particular, which fell by 1.1% in July.

19.01.2022 The sectors and strategies were backing in the hunt for income. We are charged with generating income for our clients and we think now is a crucial time for clients to reassess where their portfolios are positioned in the high-income area of Australian equities. It was only in March that, some days, local markets would be down by 8-10 per cent on the market open, following some difficult overnight moves in the US. Now, markets are trending upwards, and we are around bull...Continue reading

18.01.2022 Why a revenge buying ramp up is one to watch for investors.. China was the first country into the pandemic and out of it, so its patterns can be indicative of whats to come for the rest of the world. Early indications of an uplift in consumer spending is good news in this sense, as pent up demand finds its outlet. What is revenge buying?...Continue reading

18.01.2022 Tax deductions and working from home during COVID-19.. Did you know that one in three employees claims a tax deduction for work expenses for work done away from their employers workplace? With the explosion in the numbers of people now working from home due to COVID-19, the situation has changed significantly. The ATO says that in the past, claims for home office expenses were relatively small for work occasionally done at home, such as at weekends, in the evenings, or w...Continue reading

18.01.2022 The RBAs progress report on the Australian economy.. At the Reserve Bank of Australias (RBAs) meeting this week, there were no great surprises. The central bank left the cash rate on hold at 0.25% for the fourth month in a row, and no change is expected there at the moment. I dont see the RBA moving into negative territory with rates, as there is no substantial evidence that approach would be effective. The RBA indicated it is prepared to do whatever it can to support t...he economy. I think they could do more quantitative easing, which means pumping more money into the economy, bringing the value of the Aussie dollar down, and bringing the longer-term cost of borrowing down even lower. For now, it looks like the focus is on fiscal policy for future support for the Australian economy. This particularly applies to existing programs like JobKeeper, and whether it is extended beyond the end of September. The RBA didnt make any specific mention of the situation in Victoria, which in recent days has continued to worsen. This has, as we know, resulted in a lockdown of metropolitan Melbourne for six weeks. This will no doubt have an impact on the Victorian economy, which is a significant contributor to Australias GDP. More broadly though, the RBA indicated a little more confidence that the economy has bottomed out. However, it is uncertain about the speed of the recovery, and made it clear that recovery remains dependent on the control of COVID-19.

18.01.2022 ABA Says Three Quarters Of Households Still In Distress Over Loans CEO of the Australian Banking Association Anna Bligh revealed alarming figures today, showing that around 75 per cent of Australians are still struggling to pay back their loans. In an interview with Fran Kelly on the ABC, Ms Bligh said that only 9 per cent of customers are exiting the deferral scheme completely, and another 15 per cent are returning to partial or full payments. But the grim reality of the COV...ID-19 crisis is that the majority of Australians are struggling to pay back their loans and are in major financial distress. At the beginning of July, Ms Bligh announced the banks would be extending, to those who are struggling to make any payments, an additional four months of deferrals. She also said that banks in the coming months would be contacting their customers, to tailor payment options. There is going to be thousands of solutions, every circumstance is going to be different. There is a lot of distress for hundreds of thousands of households and hundreds of thousands of small businesses. Prior to Melbournes second lockdown, over 900,000 Australians had been granted loan deferrals amounting to $250 billion. In regards to customers who are able to make partial payments, Ms Bligh said, banks will work with them individually to restructure their loans where they can, do things like lengthening the term of the loan, dropping the interest rate, move to interest-only for a period of time or a combination thereof. Customers who are able to make payments will be expected to do so. Ms Bligh said, it is in their best interest to do that, it is not in their interest to continue to accrue debt and have their loan lengthened. After announcing loans would be extended for another 4 months on a case by case basis from September, Ms Bligh recognised the worsening economic situation and said, banks will be looking to do everything in their power to get customers back into a position where their loans are performing and their financial well-being is as safe and secure as possible. Other customers may need to make more serious decisions to avoid foreclosure of their home or business. However, Bligh has said that banks will be working hard to minimise that prospect and give every customer the best chance of getting back on their feet.

17.01.2022 Three considerations for the post-coronavirus property market OVID-19 has impacted many of the big, fundamental drivers of property markets in Australia. There is potential for this to have a lasting impact, which could be good news for the chronic affordability issues in the residential market. The fundamentals driving property prices in Australia:...Continue reading

17.01.2022 Well, maybe this will give our sector a level playing field finally, and not having the industry funds blind members and the regulators with their smoke and mirrors reporting. The rest of the sector was cleaned up in the Royal Commission About time these guys are held accountable and the public and even us financial planners can have some honesty from them when comparing the pair for our clients.. https://www.theaustralian.com.au//fdac77fe7c4267274da06117

16.01.2022 The differences between the COVID-19 crisis and The Great Depression The substantial slump in economic activity triggered by COVID-19, coupled with images of Australians queuing around the block for Centrelink payments, has made some fear The Great Depression II. The optics might be alarming, but the parallels are not particularly strong. Every Australian knows someone, or is someone, who has lost a job, a tenant, a place to live. This is an entirely unfamiliar experience for...Continue reading

16.01.2022 Australia and a Recession Going into a recession is bad news. When the economy goes backwards, spending contracts, the jobs market gets tougher, wages go down the list goes on. This period ahead has come as a shock to many Australians, but there are some things worth noting that might make it easier to bear. Australia has been battling through a calamitous start to 2020 so far. We kicked off the year with devastating bushfires, which were already detracting from growth in t...Continue reading

15.01.2022 Insights from the RBAs latest gaze into the crystal ball.. Predicting the future is a hard act at the best of times, and especially so during a global pandemic. Nevertheless, RBA assistant governor Luci Ellis had a crack at it on Friday, in a speech at the Australian Business Economists Lunchtime Briefing. Ellis comments accompanied the central banks quarterly Statement on Monetary Policy, which includes its latest set of forecasts on the primary inputs for the Australi...Continue reading

15.01.2022 An EOFY checklist for SMSFs. Next week is the end of the 2019/20 financial year. But before it does, here is a checklist of 10 items to consider for an SMSF before its too late. 1. Concessional (tax deductible) contributions...Continue reading

14.01.2022 Four ways the COVID-crash in March wasnt like other crises The financial world is taking a breath this month after being spanked in March, time which has given investors an opportunity to identify what happened. Four factors stood out that were unusual about the market moves in March, according to Janus Henderson global head of fixed income Jim Cielinski. At the time, investors started dumping stocks as the world realised the COVID-19 virus had breached Chinas great wal...Continue reading

14.01.2022 Implications for Australian investors and the economy following the RBAs meeting The Reserve Bank of Australia (RBA) met on Tuesday May 5, and as widely expected, it left the cash rate on hold. The central bank has said it doesnt want the cash rate to go to zero or negative, so we expect the current rate is effectively the lower bound. More broadly, there were no new substantial monetary policy moves, for the simple reason that the RBA made some big moves back in March in ...Continue reading

14.01.2022 2020 Federal Budget worth the wait for investors in Australian equities...................... Josh Frydenberg’s delayed Federal Budget contained a bundle of good news for domestic-focussed businesses in Australia and for investors in those companies. Containing almost $100 billion in new spending, it signals a sharp change in direction from the Government’s pre-COVID focus on fiscal discipline. Having well and truly turned on the tap and expanded spending by almost a third, t...Continue reading

14.01.2022 What does the share market need to see now? Share markets have rallied in the last month, but theyre well off their pre-coronavirus highs. Here, we look at what markets might need to see before strengthening again. Lockdown restrictions are starting to ease now across Australia, albeit slowly. At the federal level, the government has always maintained that schools are a safe place for children, and is now urging parents to send their children back. State leaders in NSW, Quee...nsland, the Northern Territory and Western Australia have also kicked off plans to start slowly returning lifting social distancing restrictions, after about one month of lockdown. Western Australia was the first state to do this, after recording no new coronavirus cases for several days. Its understandable to think that share markets might rally at these early signs that domestic activity in Australia might show signs of life soon. As weve discussed previously, local activity grinding to a halt is among the chief concerns for markets, more so than international travel being paused and borders being closed to non-citizens. However, for several days and even weeks now, its been clear that Australias containment efforts are on track. Australia hasnt had the experience of countries like the US, UK and Italy. The US, for example, has now exceeded a million cases, the most reported cases in the world, and its death toll has surpassed 57,000. Australia has over 6,730 cases nationwide and the death toll is (currently) at 84, making it one of the more successful countries at this stage of achieving containment. It seems markets have already factored in Australias progress in containing the infection. At the moment, share markets in Australia have rallied about 17% since their lows during the coronavirus pandemic. Though theyre still down about 26% since their pre-coronavirus peak, that is a strong recovery over a relatively short time frame. Right now, its difficult to see how markets could rally substantially more without significant new information at a time when the economic data is deteriorating significantly. Economic data for April should be the news of a vaccine, wider antibody testing or widespread use of antivirals all represent examples of moves that could be a game changer for the COVID-19 pandemic. These could ultimately assist in moving society back to a more regular or familiar way of functioning, and help markets find their feet.

14.01.2022 Markets craving guidance ahead of August reporting woes.. For many big corporates, the upcoming earnings season will be the first proper chance for the market to assess the damage of the COVID-19 pandemic. How will markets respond and what could investors do to insulate themselves from the fallout? For Australian equities, the beginning of the new financial year is likely to mark a turning point for the Robin Hood rally, where significant gains have been on offer for tho...Continue reading

13.01.2022 Heres how long the experts reckon it will take for the Australian economy to return to growth: The Australian economy is set to end 2020 lower than what it began but economists expect better years ahead. The Reserve Bank believes it will take until 2022 for the economy to reach its pre-COVID levels a view shared by several other economists in the private sector including from NAB and the CBA. There have also been concerns raised that Victorias second lockdown could derail... the national recovery even with other states loosening restrictions. But what does the rest of the decade hold for the Australian economy? Bloombergs James McIntyre is one of the few economists to have looked that far ahead. This week he forecast that by the end of the 2020s, growth will reach an average 2.8 per cent. The expectation for 2020, however, is a 2.8 per cent contraction on an annualised basis. That negative trend is expected to reverse by 2021, with growth of 2 per cent forecast and accelerating after that. Despite the second wave in Victoria, McIntyre is optimistic about the recovery. He believes it will only delay and not derail the economy in light of other states experiences. Australia has suffered a lighter blow from the pandemic than other major advanced economies, McIntyre said. Australias virus outbreak was not as severe as expected, and the economy began re-opening from the nationwide lockdown sooner than anticipated. McIntyre made a similar suggestion about the impact of Aucklands containment measures on the rest of New Zealands economy. He predicts a 4.1 per cent fall in New Zealands GDP in 2020 followed by a similar acceleration in growth in subsequent years. Factors critical to growth: Australian GDP growth is predicted to be 2.3 per cent less than what it would have been if COVID-19 hadnt happened. But McIntyre says several factors will be critical to ensuring a return to growth. These include a pickup in capital accumulation, population growth (potentially spurred through immigration) and public investment. The public investment boost, both pre- and post-pandemic, should provide some support for productivity gains, he said. A resurgence in such outlays is likely to be sustained given support from a loose monetary policy, and acknowledgment of the need for investment across transport networks to catch up with population growth. McIntyre has previously acknowledged the mining sector as one of the key sectors in Australias recovery, particularly in Western Australia. While he thinks mining will be important going forward, he says Australia shouldnt put all its eggs in one basket. Australias distance from global manufacturing centres favours a boost in non-mining investment across strategic sectors, as part of post-pandemic realignments of global supply chains, he said.

12.01.2022 We are excited to offer full Accounting services to all our existing and potential clients now though the acquisition of Solace Accounting. Solace Accountings specialty is Small to Medium business and taxation for the Medical Industry, but also happily supplies taxation advice through to Mums & Dads as well. Our pricing is very, very competitive, described as Big Firm advice and strategy, at a Small Firm price. Through our systems and processes here, we are able to offer ...services at a much lower price than you would expect. Solace is headed by Diana Liu, who is a Chartered Accountant as well as a Chartered Tax Adviser and a Senior Business Services Accountant. She is a passionate supporter of innovation, entrepreneurs, technological advancement and economic growth. Having a bubbly personality and a caring nature, she shares infectious enthusiasm with her clients and team. Taking a holistic approach when providing accounting, tax and advisory services, Diana applies her broad experiences and in-depth knowledge in advising business owners, high net worth individuals and start-up businesses. Diana has advised clients from, or with affairs in, Singapore, China (including Hong Kong), United States, Ireland and New Zealand. Additionally, she is currently actively involved in the tertiary education sector through lecturing at Adelaide Uni, subjects include Accounting Information System, Auditing and Assurance, and Income Taxation across both undergrad and postgrad levels. In her spare time, Diana enjoys cooking, gardening and spending time with her friends and family including two beautiful fur babies "Blackie" and Pepper.

12.01.2022 The most asked investment question of the past month or so is: Is now a good time to invest?. The short answer, of course, is yes. But its not really the right question to ask. Whats more important is: Why are you apprehensive about investing?. Its probably that you are worried about buying a share for $1 and tomorrow it is trading at 90c. In other words: youre worried about the price of your investment going down.... You need to reframe your thinking. Think less about the price of the shares and more about the value of your share in that company. Remember, buying shares on the stock market is just a convenient way to trade a stake in a business. If you bought into a private business, lets say you bought a 25% stake in Hedges Asset Planning today for $1 million. For the next 5 years would you run around town asking other people how much theyd buy that stake for? And get upset when Alex from the queue at the local coffee cafe offers your $900,000 or Crystal who you bumped into at the gym says $500,000? Or would you focus on advertising revenue, monthly traffic, costs and overheads and profit growth? This is the difference between price and value something Warren Buffett once summarised with the following quote. Price is what you pay, value is what you get. Sure, you might feel safer today with money in the bank, earning you 1% before tax and inflation, but do you really think investing in a portfolio of leading companies, over the long run, wont yield a better result? So yeah, it is a good time to invest. As good a time as any. Nobody knows what the price of anything will be tomorrow, the next day, next month or next year. It may be more expensive; it might be cheaper. Why worry about something you have no control over and no ability to forecast accurately? Instead, focus on the long term value your investment portfolio is likely to create.

12.01.2022 Did you know that since the ASX bottomed out on March 23, the average ASX share has gained 85 per cent and only 181 out of 2,108 sit in negative territory? While most rose after a sharp decline over the proceeding five weeks, many stocks have gone above and beyond their pre-COVID states. Thirty stocks have gained 500 per cent or more and six have gained over 1000 per cent. This should be reflective in your super fund balance Is it?... Call us on 8267 2000 to have a non-obligational financial check of your portfolio and see if you are invested correctly for the post COVID19 era.

12.01.2022 What could a low-yield environment mean for returns? In a year where the global economy entered into its deepest crisis since the Great Depression, stock markets have demonstrated remarkable resilience, and investors who held firm or added to their portfolios though the initial crash have generally been rewarded for their confidence. The median balanced growth super fund returned 7.3% p.a. over the past ten years, which is high by current standards but might seem underwhelmin...Continue reading

11.01.2022 Five asset classes were watching in the COVID-19 recovery At a time when most investors are seeking out defensive positioning, savvy managers should have an eye to the opportunities provided by the unfolding pandemic. These may be asset classes that are already undervalued at the present moment, but also include those which stand to benefit from an eventual recovery to an extent not currently priced in by the market. The latter might not necessarily represent buy now opp...Continue reading

11.01.2022 A combination of short-term, over-bought market; an increase in virus case-loads in some parts of the US and perhaps a case of sell the fact as the Fed confirmed its current monetary stance prompted the biggest sell-off in Australian equities since March. The S&P/ASX 300 had fallen -3.0% over the past last week. US bond yields also fell. However key industrial commodities held onto most of the recent gains, as did the Australian dollar, while credit only saw a small sel...Continue reading

10.01.2022 Australian housing finance is booming but can it continue? According to figures from the Australian Bureau of Statistics (ABS), the total value of new loan commitments for housing and within that, the value of owner occupier home loan commitments each reached record highs last month. Some key figures include:... 1. The total value of new loan commitments for housing rose 8.6 per cent to $26 billion (seasonally adjusted.) This represents a 31.2 per cent increase on December 2019. 2. The value of new owner occupier home loan commitments rose 8.7 per cent to $19.9 billion. This is 38.9 per cent higher than December 2019. 3. The value of owner-occupier approvals for existing dwellings rose 4.0 per cent, while approvals for new construction rose 15.3 per cent. And this chart attached gives an idea of the patterns with Australian housing lending, excluding refinancing. Why the jump? The surge in housing finance, like the rebound in home prices, is being driven by a combination of a few factors. This includes record-low mortgage rates, home buyer incentives and economic recovery. It also seems consistent with further gains in house prices ahead, as these loans are drawn down and listings remain relatively low. But, can it continue? Right now, the rate of growth in total housing related debt is modest with RBA credit data for housing debt showing a rise of 0.4% in December and 3.5% year on year because existing borrowers are focused on rapidly paying down debt and the housing finance commitment data leads the flow of new credit with a lag. However, the RBA is likely to be starting to get a bit more concerned given the pace of the rebound in lending commitments and house prices, albeit it’s not that concerned at this stage as there is not much evidence of a deterioration in lending standards yet. At the very least, it would make sense for home borrower incentives to be wound back in the months ahead and not extended. If housing credit growth accelerates significantly, I think we may see a renewed tightening in lending standards by year end or early next year. As was the case a few years ago, tighter lending standards rather than rate hikes are likely to be the RBA’s preferred path at least initially as it will likely remain premature for the RBA to start raising interest rates or ending bond buying entirely, considering continuing uncertainty and spare capacity in the wider economy at least out to the end of next year. https://www.abs.gov.au///lending-indicators/latest-release

09.01.2022 We are back open from Monday morning...

08.01.2022 Tax relief for some SMSFs with rental properties. The past financial year has been exceptional with the uncertainty created by the natural disasters we have all faced, both locally and internationally. With the 2019/20 tax year now over, maybe its time for members and trustees to take stock of some of the things they might need sort out with their SMSFs before the inevitable meeting with the funds accountant or administrator. This is especially so with some of the conce...Continue reading

07.01.2022 A new financial year with some new super rules. !! Please contact either Garry or Graeme to discuss any of these changes in detail and how they can affect you, or used to your advantage. The start of a new financial year always brings with it new rules for super funds. Sometimes there are lots of changes, which are wide-reaching, and in other years theres just a few. For the 2020/21 financial year, the two main changes are: the abolition of the work test for anyone aged 66 ...Continue reading

07.01.2022 Is the Bottom Is about to Fall out the Property Market? Well, its been a good run I suppose. A three-decade run to be exact From the early 1990s up until today, the property market has been a one-way ticket to riches for most Australians. Not even the ferocity of the GFC in 2008 could put a halt to it. This property price resilience was in stark contrast to the experience in the rest of the world. And it cemented the belief that Aussie house prices only ever went one way ...Continue reading

07.01.2022 Australian shares in the 2020s: A very different decade so far. The turn of a decade is a significant thing for people who make predictions for a living, and a lot of economic commentators took the opportunity around the beginning of this year to publish outlooks for the decade ahead. But if any of them had managed, at the time, to adequately convey a sense of how events would actually unfold over just the first nine months of the decade I wonder whether wed actually have ...Continue reading

07.01.2022 How the Australian economys recovery prospects are looking https://player.vimeo.com/video/442579546

06.01.2022 The Reserve Bank of Australia (RBA) had its August board meeting on Tuesday 4th, and though there were no real surprises, I think we can expect more out of the central bank in the coming months. In its meeting, the RBA made mention of the situation unfolding in Victoria, which is sadly seeing COVID-19 infect more people in the state now than it did back at the pandemics initial outbreak in March and April. I think this is what will trigger further response from the central b...ank. The stage four lockdown which has ensued in Victoria will dent Australias recovery (good one Victoria!), and the central bank has previously said it will do everything in in its power to support the economy through this period. As a result, I think we can expect more broad-based quantitative easing from the RBA. The central bank has said it doesnt want negative interest rates, though there is a possibility it could cut rates to 0.1%. Its questionable whether this would really have much impact, but it remains a possibility. The RBA has also said it doesnt want to directly finance government spending, or intervene in the foreign exchange market. In addition to this, there will be more pressure on the federal government for stimulus, as growth takes more of a hit than forecast in the current quarter from the situation in Victoria. As such, we can expect more support measures from Canberra in the months ahead.

06.01.2022 The UBS economics team expects to upgrade its forecasts for GDP and employment after the Morrison government flagged further stimulus measures yesterday. Ahead of its economic update tomorrow, the government announced a range of extensions most notably to its JobKeeper payments program With markets growing wary of the September cutoff date for the initial six-month JobKeeper phase, the program was extended for another six months to March 2021.... Economic cliff avoided for now That was a longer extension than UBS had expected based on previous government comments, albeit with reduced payment amounts. The banks economics team led by George Tharenou said it now expected to upgrade its growth forecasts following tomorrows official announcement. UBS said that along with JobSeeker, the extension of the programs would be worth a combined $20bn to the economy in the December quarter. That equates to more than 1 per cent of annual GDP growth, except the activity will be concentrated in Q4. As a result, this reduces the downside risk for growth and employment in Q4, the analysts said. We have been particularly concerned that the end of JobKeeper could have driven a second wave of job losses, UBS said, however, Q4 GDP and employment are still likely to be better than we feared, with upside risk to our current forecasts. The changes to JobKeeper will see the current flat rate of $1,500 per fortnight (which covers 3.5 million people) replaced by a $1,200 payment for those that work more than 20 hours per week, with a $750 payment for part-time workers. In the March quarter next year, those rates will reduce to $1,000 and $650, respectively. UBS said the changes were designed to limit the number of people who were receiving a higher wage from the JobKeeper subsidy than they were being paid previously. Estimates indicate that around a quarter of the 3.5 million JobKeeper recipients are now receiving higher wages, although the actual incidence is less given many of these workers are casual and/or part-time and work multiple jobs, UBS said.

02.01.2022 Markets may soon start to pay attention to the US election Investor focus on the US election waned earlier this year after Bernie Sanders dropped out of the Democratic primary race in favour of Joe Biden. At the same time coronavirus became the main focus for markets. However, markets may soon start to pay more attention. Though COVID-19 is a major focus, the election is rapidly approaching in the US. While Joe Biden is a moderate, he is proposing higher taxes and more regula...Continue reading

01.01.2022 Is the COVID19 Downturn like the GFC? https://www.reddit.com//the_bear_case_vs_bull_case_argum/

01.01.2022 Good news in Australia’s confidence. We’re by no means out of the woods, economically or epidemiologically speaking, but there’s certainly a number of optimistic indicators on our prospects heading into 2021. Extremely positive results from trials of three of the leading vaccine candidates, as well as the news that immunity may be longer-lasting than first thought, are good reasons for optimism, and these developments have come on top of the most recent Westpac/Melbour...ne Institute survey which showed consumer sentiment already at its highest level since late 2013. Consumers appear to be particularly encouraged by the strength of the housing market, which in turn is being driven by the Reserve Bank’s commitment to hold interest rates at record lows for longer than had previously been dictated by policy. This effect seems to be overriding the other questions hanging over the housing market, such as the prospect of sustained high unemployment and lower immigration. The survey shows that consumers are increasingly bullish about prospects for the broader economy over the next twelve months, and that this confidence is spilling over into a propensity to spend on major household items good news for retailers this Christmas. Opinions on the future state of the labour market, however, were decidedly more pessimistic. According to NAB’s monthly business survey, business confidence has also rebounded strongly to its highest level since mid-2019. This comes on the back of re-openings in Victoria, where confidence surged in October, although remaining lower overall there than in the rest of the country. Gains were shared across most industries, apart from mining (which has of late been operating in a vastly stronger climate to the rest of the economy) and transport, where obvious difficulties will persist as long as movement continues to be restricted. The caveat here comes in the same survey’s assessment of business conditions for employment, which declined by 5%. This is a consistent theme at the moment, and a soft labour market looks as if it could potentially be an Achilles’ heel in the prospects for a full recovery. That said, I am not too worried about this as the labour market has already seen a stronger-than-expected recovery and if spending picks up, it will continue to improve albeit at a slower rate than has so far been the case. Both of these surveys capture a slice of Victoria’s recovery, to various degrees, but none of the effects of developments on the vaccine front, so it’s likely that confidence will continue to improve into the new year, especially if the country continues to record low numbers of new infections. The impact of ongoing government support and particularly tax cuts, and monetary easing should also not be underestimated, giving businesses confidence to retain staff and ultimately hire more, as well as giving consumers the confidence to run down the huge June quarter spike in saving.