29 Jun 2016
Brexit: Hysteria
- Posted by Dejan Pekic BCom DipFP CFP GAICD
There is a tremendous amount of media coverage on Brexit but the only significant impacts to date have been on the pound sterling devaluing to 1980 levels and price falls across UK and European banks.
Assuming the exit proceeds which is not yet an absolute certainty, the UK will have 2 years to negotiate a withdrawal according to the attached timeline.
In terms of impacts on Australia, exports to the UK account for 1.5% of Goods and 8% of Services which is on the low side however the Australian banking sector has significant exposure to both the UK and the Eurozone.
The biggest danger is most likely on whether this euro-skepticism becomes contagious and results in other countries leaving the European Union.
Remember, if it all does fall apart it will present investors with the opportunity to buy more quality assets at reasonable or better still discounted price.
23 Jun 2016
Australian Entrepreneurs: tHiNk oUtsiDe tHe boX
- Posted by Dejan Pekic BCom DipFP CFP GAICD
What an interesting idea… ‘Take away all these Industrial Revolution rules, and you discover most people just want to do their best’.
This is the thinking behind Joel Friedlaender Founder Red Guava who is competing by introducing new business practices such as the 30 hour week.
Who ever said that ones ideas had to be confined to thinking inside the box?
17 Jun 2016
Global Market Metrics: What’s changed
- Posted by Dejan Pekic BCom DipFP CFP GAICD
If you look at global population data you will quickly discover that although there are an estimated 7.4 billion people on the planet which is projected to grow to 9 billion by 2040, the rate of population growth is collapsing.
For example, population growth has fallen by 72% over the last 50 years in the developed world and is forecast to drop to zero by 2040. See Chart 1.
While the rate of population growth is collapsing, global debt is ballooning with debt levels in 2015 much higher than they were before the global financial crisis in 2007. See Chart 2.
What has helped this burgeoning debt is of course the collapse in interest rates with both the cash rate and the 10 year government bond rate falling by well over 50% in developed economies. This is making it extremely difficult to make money from investing in defensive assets. See Chart 3.
So what is the impact of falling population growth, ballooning debt and collapsing interest rates?
A global slowdown in growth and that is exactly what has happened with GDP having fallen in both advanced and emerging market economies.
How long will this persist?
Well that is the real question and no one knows the answer.
However what we do know is that when the trouble comes and everyone is fearful it will be time to be greedy.
9 Jun 2016
Creativity: The Wicked Sick Project
- Posted by Dejan Pekic BCom DipFP CFP GAICD
Yesterday we were lucky enough to listen to Russel Howcroft Executive General Manger Network Ten talk about celebrating salesmanship.
It had absolutely nothing to do with investment markets.
However he went on to speak about the power of creativity and how it can be used in business to help you or a product or a concept stand out and shine bright.
By way of example he used a short video called The Wicked Sick Project which we wanted to share with you.
6 Jun 2016
Taxation: New withholding tax on property sales
- Posted by Dejan Pekic BCom DipFP CFP GAICD
Buyers and sellers of residential and commercial property will have new withholding tax rules from the 1 July 2016.
Australian resident sellers of property with a sale price of $2m or more will be required to obtain a clearance certificate form the Australian Tax Office to confirm that the seller is a resident of Australia for tax purposes
If this new clearance certificate is not obtained then the buyer will be required to withhold 10% of the purchase price and remit it to the Australian taxation Office.
The new rules have been introduced to ensure foreign residents meet their capital gains tax liabilities.
