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April 2017 Market Commentary

April 2017 Market Commentary   Since our last commentary we have had new presidents elected in France and South Korea, missile tests from the latter’s northern neighbor, unprecedented actions from the US president and continued Brexit negotiations in Europe. Closer to home the talk about a housing bubble and the potential impact on the banks should it burst has been unrelenting, and this topic was also central to the latest federal budget. And yet, though these events might ordinarily be expected to lead to instability in investment markets, we have seen volatility remain low and major global share market indices maintain modest to impressive year to date gains. The patience to maintain a long-term focus and the discipline to filter the noise that pervades the short-term view is what has led to the welcome recent strong portfolio performance, and is what we will continue to deliver in our management of your portfolio. 20170516 – MXA – Monthly Commentary Click on the link to read our Monthly Economic & Investment Market Commentary for March 2017 attached. If you have missed any previous monthly commentaries and wish to receive a copy, please contact our office.   20170516 – MXA – Monthly Commentary MXA Financial Planning Pty Ltd is a Corporate Authorised Representative No. 1252255 My Planner Professional Services Pty Ltd AFSL No 425542 General Advice Disclaimer Information provided on this flyer is general in nature and does not constitute financial advice. Information can change without notice and MXA Financial Planning Pty Ltd does not guarantee the accuracy of information on the flyer, including information provided by third parties, at any particular time. Every...

The Budget 2017/2018

  The Budget 2017/2018 The government’s economic plan to ensure Australia continues to successfully transition from the mining investment boom to a stronger, more diversified, new economy Let’s slice and dice the budget to see who gets what. Where every dollar comes from and how it is spent. Taxation   Major bank levy From 1 July 2017, a major bank levy will be imposed on Authorised Deposit-taking Institutions (ADIs) with licensed entity liabilities of at least $100 billion. The threshold will be indexed in line with nominal gross domestic product. The levy will be calculated quarterly as 0.015% of an ADI’s licensed entity liabilities for an annualized rate of 0.06%. Increase in Medicare levy From July 2019, the Medicare levy will increase by half a percentage point from 2.0 to 2.5 % of taxable income. Other tax rates that are linked to the top personal tax rate, such as the fringe benefits tax rate, will also be increased. Indexation of Medicare levy thresholds The threshold for singles will be increased to $21,655. The family threshold will be increased to $36,541 plus $3,356 for each dependent child or student. For singles senior and pensioners, the threshold will be increased to $34,244. The family threshold for senior and pensioners will be increased to $47,670 plus $3,356 for each dependent child or student.   This applies for the 2016-2017 financial year.   Lower threshold for HELP debt repayments From 1 July 2018, a new minimum threshold of $42,000 will be established with a 1% repayment rate and a maximum threshold of $119,882 with a 10% repayment rate.   Expanding tax incentives for...

20170505 – Portfolio Activity

20170505 – Portfolio Activity Update from Michael Cooper on Vimeo. On Monday the ASX 200 index hit a two year high of 5956, falling short of the March 2015 peak. This was quickly followed by four days straight of losses as declines in commodity prices saw the Resources Sector sell off. The market today looks likely to close around the 5,830 level, down 1.6% for the week. Globally, stock markets have been mixed, the Japanese stock market has been closed for three consecutive days for holidays and in Hong Kong the market was closed on Wednesday for The Birthday of the Buddha. As widely expected, the Reserve Bank of Australia decided at their Board meeting on Tuesday to keep the cash rate unchanged at a record low of 1.5% for the eighth consecutive month. The statement is similar to last month with little hint of any change to the policy rate in the near future. The Governor repeated his broad guidance that the current stance of policy was consistent with sustainable economic growth and achieving the inflation target over time. In the US the Federal Reserve announced on Wednesday that the benchmark interest rate would remain unchanged after a two-day policy meeting, as had widely been expected. The only new information from the meeting came from changes to the Federal Open Market Committee’s statement where the committee adjusted language to acknowledge the weaker inflation and consumption data of late is ”likely transitory” and the risk in the near-term remains ”roughly balanced”. The Committee did not signal a change to its interest rate projections or balance sheet policy. PACE OF...

20170428 – Portfolio Activity

20170428 – Portfolio Activity from Michael Cooper on Vimeo. Australia’s inflation rate has edged up in the first three months this year, driven by higher costs of both fuel and healthcare. Headline inflation in the March quarter was 0.5% and yearly inflation was 2.1%. Underlying inflation which strips out volatile factors is the measure most keenly observed by the Reserve Bank. It remained below the RBA’s target edging up by 1.8% over the year and this is consistent with the RBA’s forecasts. Across the Tasman New Zealand’s CPI inflation was the strongest in over five years, with the March quarter reported to be 1%, which is a surprise to the upside. In Europe the European Central Bank left its interest rates unchanged, commenting that ”underlying inflation pressures continue to remain subdued and have yet to show a convincing upward trend”. Also in Europe the first round of the 2017 French presidential election was held on Sunday. As no candidate won a majority, a run-off election between the top two candidates, the centrist independent Emmanuel Macron and nationalist rightwing Marine Le Pen, will be held on 7 May 2017. The flow of news surrounding President Trump has continued. US Republicans voiced relief that he appears to be retreating from a confrontation on the potential US government shutdown by relenting on his demand that Congress immediately start funding a border wall. At the same time, details of the spending bill that would avert this shutdown were scant, complicating passage ahead of Friday’s deadline. President Trump also announced a 24% percent tariff on imported Canadian softwood lumber, reigniting concerns about protectionist policies....
Figuring out Your Retirement Plan

Figuring out Your Retirement Plan

Retiring from the paid workforce is one of the most important life changes most of us ever make. So why aren’t more Australians better prepared? Here are some issues to think about and steps you can take to become truly retirement ready, so you can enjoy the lifestyle you’ve been looking forward to. Retirement is a time of huge change — emotional, psychological and financial. On the one hand, it’s a well-deserved opportunity to sit back and enjoy the rewards of your many years of hard work, but unless you’re prepared, it can also create enormous stress and uncertainty. Research from Investment Trends shows that despite investor confidence improving on the back of strong performance from the ASX, 91% of Australians over age 40 had concerns in relation to their retirement.1 The survey found the top concerns had shifted from having enough for essentials to having enough for extras (47%), inflation (43%) and outliving retirement savings (41%). Alarmingly, only 22% of Australians over 40 expect to be able to live comfortably in retirement. Even with the recent market improvements, concerns like these aren’t surprising. After all, for many of us retirement means a sudden transition from income rich and time poor, to time rich and income poor. It’s a change with both positives and negatives, but it takes careful planning to make it work. What’s more surprising is that many people don’t have a clearly defined plan. The same research found that 60% reported that despite their concerns, they don’t have a formal retirement plan in place. So it seems that many of us have some urgent planning to...