Investors with self-managed superannuation funds (SMSFs) have increased their allocation to equities from 32% in December 2008 to 42% in December 2009 and reduced their allocation to cash.
According to a Multiport survey, over the last six months SMSFs reduced their cash holdings from 28% to 22%.
"The cash built up over 2008 and remained that way in the first half of 2009, then commenced a shift into equities in good correlation to the rising market over recent months," Multiport chief executive John Mcllroy said.
"The average SMSF still has cash of around $190,000 ready to invest, so there is room for further substantial changes in market participation if greater stability is seen in sharemarkets."
Tuesday, January 19, 2010
Monday, January 18, 2010
Bank and investor taxes to be slashed
Australia will buck the international trend towards higher taxes on banks and financial institutions and lower financial services taxes under new government proposals unveiled by Minister for Financial Services Chris Bowen on last Friday.
Mr Bowen launched a report into making Australia a regional hub for financial services and increasing the nation’s exports of financial services saying Australia stands out as a safe haven for international investors.
The report recommends the removal of withholding tax on interest income earned by foreign banks in their Australian branches. The report also highlighted that tax law does not allow investors in a unit trust to gain a tax benefit from losses.
Other tax breaks and incentives for fund managers and banks were also suggested by the government commissioned report by former Macquarie Bank CEO Mark Johnson and Treasury officials.
Meanwhile US President Barrack Obama unveiled plans on Friday for a new punitive tax on the US banking system to collect almost $100 billion from institutions to recoup taxpayer money used to bail out banks during the global financial crisis.
Mr Bowen launched a report into making Australia a regional hub for financial services and increasing the nation’s exports of financial services saying Australia stands out as a safe haven for international investors.
The report recommends the removal of withholding tax on interest income earned by foreign banks in their Australian branches. The report also highlighted that tax law does not allow investors in a unit trust to gain a tax benefit from losses.
Other tax breaks and incentives for fund managers and banks were also suggested by the government commissioned report by former Macquarie Bank CEO Mark Johnson and Treasury officials.
Meanwhile US President Barrack Obama unveiled plans on Friday for a new punitive tax on the US banking system to collect almost $100 billion from institutions to recoup taxpayer money used to bail out banks during the global financial crisis.
Mr Bowen launched a report into making Australia a regional hub for financial services and increasing the nation’s exports of financial services saying Australia stands out as a safe haven for international investors.
The report recommends the removal of withholding tax on interest income earned by foreign banks in their Australian branches. The report also highlighted that tax law does not allow investors in a unit trust to gain a tax benefit from losses.
Other tax breaks and incentives for fund managers and banks were also suggested by the government commissioned report by former Macquarie Bank CEO Mark Johnson and Treasury officials.
Meanwhile US President Barrack Obama unveiled plans on Friday for a new punitive tax on the US banking system to collect almost $100 billion from institutions to recoup taxpayer money used to bail out banks during the global financial crisis.
Mr Bowen launched a report into making Australia a regional hub for financial services and increasing the nation’s exports of financial services saying Australia stands out as a safe haven for international investors.
The report recommends the removal of withholding tax on interest income earned by foreign banks in their Australian branches. The report also highlighted that tax law does not allow investors in a unit trust to gain a tax benefit from losses.
Other tax breaks and incentives for fund managers and banks were also suggested by the government commissioned report by former Macquarie Bank CEO Mark Johnson and Treasury officials.
Meanwhile US President Barrack Obama unveiled plans on Friday for a new punitive tax on the US banking system to collect almost $100 billion from institutions to recoup taxpayer money used to bail out banks during the global financial crisis.
Friday, January 15, 2010
Australian wealth survey report
The New Year is almost 2 weeks old and, sadly, many New Year resolutions have already been broken. Amidst the activity and, hopefully, relaxation of the holiday season, it is worthwhile to consider where the last two years have taken us and what is likely to lie ahead for investors in 2010.
The Global Financial Crisis and investors
As 2008 dawned and it became clear that the world faced a genuine financial crisis, many were thrown into panic. Underlying weaknesses in even advanced economies like the USA and the UK were thrown into stark relief. Massive stimulus packages and record low interest rates could not stem the bleeding. Investment banks Bear Sterns and Lehman Brothers collapsed and AIG - once the world's largest insurer - went to the brink.
As the bad news continued, dramatic measures were taken to protect Australia. In February 2009, the Federal Government's AU$42 billion stimulus package was passed in the Senate. Perhaps even more significantly, between August 2008 and February 2009, the Reserve Bank of Australia slashed official cash interest rates by 4%.
This did not stop the announcement in March 2009 that Australia experienced a negative growth of 0.5% in the first quarter - something not seen in Australia in the past 8 years. Furthermore, although growth in the following quarter was slightly positive (thereby avoiding a technical recession), economists were quick to point out that this was largely caused by a decrease in imports and an increasing population, rather than a more productive economy.
As could be expected, investors in more volatile asset classes were hit hard by all of these developments. The S&P/ASX 200 stock market index lost nearly half of its value between late 2007 and early 2009, effectively losing an entire decade's worth of growth. Stories abound of people being forced to abandon retirement plans and of retirees forced to return to work to cover the shortfall in their retirement savings.
Wealth survey reports
All this has caused many Australians to question the adequacy of their retirement plans. In late 2009, Citibank released its 'Australian Wealth Survey'. Among its findings was the worrying fact that around one in two Australians are not confident that their retirement savings will be sufficient to provide for a decent lifestyle post-work. This correlates with the similar findings in the 2009 AMP.NATSEM Income and Wealth Report that many retirement funds will not last for the length of the average retirement.
So where to for investors?
Business collapses have, of course, been occurring since the beginning of time and stock markets will always be subject to dramatic swings. But having an adequate savings and investment strategy is imperative if we are to enjoy a decent lifestyle in retirement.
Investors, particularly those nearing retirement, need to be able to access stable and reliable investment options. In doing so, they should never forget the three immutable rules of investing:
At Intellichoice, we are committed to helping you increase your wealth in a safe and fairer way. We ensure that there is no conflict of interests and any recommendations we make for growing your wealth is aligned with your goals and gives you peace of mind.
For more information about our services and how we can assist you with retirement planning, speak to our financial planners at 1300 55 10 45 or visit https://www.intellichoice.com.au/.
The Global Financial Crisis and investors
As 2008 dawned and it became clear that the world faced a genuine financial crisis, many were thrown into panic. Underlying weaknesses in even advanced economies like the USA and the UK were thrown into stark relief. Massive stimulus packages and record low interest rates could not stem the bleeding. Investment banks Bear Sterns and Lehman Brothers collapsed and AIG - once the world's largest insurer - went to the brink.
As the bad news continued, dramatic measures were taken to protect Australia. In February 2009, the Federal Government's AU$42 billion stimulus package was passed in the Senate. Perhaps even more significantly, between August 2008 and February 2009, the Reserve Bank of Australia slashed official cash interest rates by 4%.
This did not stop the announcement in March 2009 that Australia experienced a negative growth of 0.5% in the first quarter - something not seen in Australia in the past 8 years. Furthermore, although growth in the following quarter was slightly positive (thereby avoiding a technical recession), economists were quick to point out that this was largely caused by a decrease in imports and an increasing population, rather than a more productive economy.
As could be expected, investors in more volatile asset classes were hit hard by all of these developments. The S&P/ASX 200 stock market index lost nearly half of its value between late 2007 and early 2009, effectively losing an entire decade's worth of growth. Stories abound of people being forced to abandon retirement plans and of retirees forced to return to work to cover the shortfall in their retirement savings.
Wealth survey reports
All this has caused many Australians to question the adequacy of their retirement plans. In late 2009, Citibank released its 'Australian Wealth Survey'. Among its findings was the worrying fact that around one in two Australians are not confident that their retirement savings will be sufficient to provide for a decent lifestyle post-work. This correlates with the similar findings in the 2009 AMP.NATSEM Income and Wealth Report that many retirement funds will not last for the length of the average retirement.
So where to for investors?
Business collapses have, of course, been occurring since the beginning of time and stock markets will always be subject to dramatic swings. But having an adequate savings and investment strategy is imperative if we are to enjoy a decent lifestyle in retirement.
Investors, particularly those nearing retirement, need to be able to access stable and reliable investment options. In doing so, they should never forget the three immutable rules of investing:
- Rule 1: Never put all your eggs in one basket
- Rule 2: A higher rate of return always equals higher risk
- Rule 3: Getting rich slowly will never go out of fashion.
At Intellichoice, we are committed to helping you increase your wealth in a safe and fairer way. We ensure that there is no conflict of interests and any recommendations we make for growing your wealth is aligned with your goals and gives you peace of mind.
For more information about our services and how we can assist you with retirement planning, speak to our financial planners at 1300 55 10 45 or visit https://www.intellichoice.com.au/.
5 steps to choosing the right account
There are five steps to choosing the right bank account that will suit your needs and not cost too much in fees and charges.
Step 1 - Assess your needs
Step 2 - Weigh up fees
Step 3 - Ask about waivers
Step 4 - Does it meet your needs?
Step 5 - Look into add-ons
Some banks waive monthly fees if you deposit your salary, package your home loan or do a lot of business with the bank. Add-ons such as an online saving account may help you save for that big purchase.
Step 1 - Assess your needs
Step 2 - Weigh up fees
Step 3 - Ask about waivers
Step 4 - Does it meet your needs?
Step 5 - Look into add-ons
Some banks waive monthly fees if you deposit your salary, package your home loan or do a lot of business with the bank. Add-ons such as an online saving account may help you save for that big purchase.
Thursday, January 14, 2010
Increasing wealth means higher rates
The per capita wealth of Australians is almost $46,000, up $6,500 in the past three months, according to research from CommSec.
"Financial wealth now stands at the highest levels in two years and further improvement can be expected in 2010, although probably not at the same pace witnessed in the past three months,'' CommSec chief economist Craig James said.
Per capita wealth slumped nearly $20,000 as the global financial crisis took hold. That trend is now reversing.
"The improvement in financial wealth, together with higher house prices and a stronger job market will support consumer spending in 2010,'' Mr James said.
The Reserve Bank highlighted the surge in household wealth in its recent decision to lift interest rates.
"Financial wealth now stands at the highest levels in two years and further improvement can be expected in 2010, although probably not at the same pace witnessed in the past three months,'' CommSec chief economist Craig James said.
Per capita wealth slumped nearly $20,000 as the global financial crisis took hold. That trend is now reversing.
"The improvement in financial wealth, together with higher house prices and a stronger job market will support consumer spending in 2010,'' Mr James said.
The Reserve Bank highlighted the surge in household wealth in its recent decision to lift interest rates.
Wednesday, January 13, 2010
Aussies lose $3K per year
Australians cannot account for $59 in cash each week – around one third of their total cash spend and one of the highest proportionately in the world, according to a new survey commissioned by Visa.
The international research surveyed more than 12,000 adults in 12 markets around the world (including 1,003 Australian consumers) asking respondents to estimate their “mystery spending,” or the cash they spend but cannot account for every week.
The survey shows that Australians cannot account for $59 a week, 34 percent of their total $176 cash spend a week and equivalent to $3,068 per person each year.
The international research surveyed more than 12,000 adults in 12 markets around the world (including 1,003 Australian consumers) asking respondents to estimate their “mystery spending,” or the cash they spend but cannot account for every week.
The survey shows that Australians cannot account for $59 a week, 34 percent of their total $176 cash spend a week and equivalent to $3,068 per person each year.
Tuesday, January 12, 2010
Credit card debt sneaking up
The average credit card balance is AU$3131.00, slightly higher than it was one year ago, according to new data from the Reserve Bank. Approximately 72% of that balance is accruing interest for the cardholder because it wasn’t paid off within the interest free period.
Last year, the average credit card balance was AU$3127 – of which 71% was accruing interest. While debit card use is increasing, analysts say in dollar terms, credit cards still dominate the market.
If you would like help with budgeting, savings and managing your credit card debt, speak to a financial consultant from Intellichoice today.
Last year, the average credit card balance was AU$3127 – of which 71% was accruing interest. While debit card use is increasing, analysts say in dollar terms, credit cards still dominate the market.
If you would like help with budgeting, savings and managing your credit card debt, speak to a financial consultant from Intellichoice today.
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