Latest News from Newealth

3 Apr 2020

Friday Tidbit: Warren Buffett, The Oracle of Omaha

What else is there to say, this is smarts and wisdom from one of the great investors.

Click to read.

Warren Buffett’s single minded focus when it comes to investing has been to buy more quality assets when fear and panic take hold.

Remember to keep your head and if you are an Active client wanting to discuss how you can take advantage of this market crash, please call me on 02 9267 2322.

 

2 Apr 2020

Bull vs Bear Market Cycles

We trust that you are all well and not overly anxious about the current bear that we are all experiencing.

History confirms that although bear markets occur at irregular intervals, they do in fact occur routinely.

The good news is that bear markets are always followed by significant bull markets and large positive returns.

Click for chart.

Remember to keep your head, never panic and if you are an Active client wanting to discuss how you can take advantage of this bear market, please call me on 02 9267 2322.

 

27 Mar 2020

Federal Government Stimulus Package

Royal Assent was granted on Tuesday, 24 March 2020 which means that the Federal Government stimulus package has come into force as law.

Supporting and helping individuals and business in great crisis is most definitely the role of Government however it is also important to understand that the Government does not produce anything and so must borrow this money.

For the Government to give money it must take from taxpayers on which the future debt burden falls.

Click to read.

During this asset price crash it is most important for investors to never ever panic and instead look for buying opportunities.

Keep your head and if you are an Active client wanting to discuss how you can take advantage, please call me on 02 9267 2322.

 

24 Mar 2020

Australian Agricultural Supply: Food

The panic buying is just ridiculous when you consider that Australia produces enough food each year to feed 75 million people.

There are only an estimated 26 million Australians.

Click to read.

The key for investors during this financial catastrophe is never to panic and to look for buying opportunities.

Keep your head and if you are an Active client wanting to discuss how you can take advantage, please call me on 02 9267 2322.

 

17 Mar 2020

Coronavirus outbreak: History of Pandemics

We have attached a chart to give you a perspective on the current COVID-19 death toll (currently estimated under 7,000) versus previous pandemics.

Click for chart.

Irrespective of this low relative death toll, fear and panic have most definitely gripped financial markets.

The Australian All Ordinaries Index (AORD) closed at 7,255 on 20th February 2020 and has since fallen to a low of 5,058 yesterday which represents a 30.5% movement.

The Dow Jones Industrial Average (DJI) closed at 29,551 on 12th February 2020 and has since fallen to a low of 20,189 overnight which represents a 31.7% movement.

The key for investors is never to panic and to look for buying opportunities.

Keep your head and if you are an Active client wanting to discuss how you can take advantage of what is now a crash, please call me on 02 9267 2322.

 

5 Mar 2020

Market Metrics: Correction verses Crash

Interestingly there have been three major corrections defined as a 10% fall or more from recent peak since the Global Financial Markets (GFC) crash in 2008.

There was 2011 when US lost its AAA credit rating, 2016 when the purchasing managers index (PMI) in China dropped below 50 and 2018 when Trump launched his tariff war on China and then the rest of the World.

All three corrections did not devolve enough to become a financial markets crash which is defined as a 20% fall or more from recent peak.

The current COVID-19 event is most definitely a correction as confirmed by the Down Jones Industrial Average having fallen 14.1% but it has already rebounded from that low.

Click for charts.

Will this fourth attempt win out and crash financial markets? Don’t know.

However what we do know is that when Mr Market is offering a 10% discount that is an opportunity to add to your investment portfolio even if the fall were to continue into a financial markets crash.

WARNING, this does not constitute Personal Advice and to discuss if this is appropriate for your given circumstances please do not hesitate to contact us directly.

 

3 Mar 2020

Business Demographics: Boss Insights

We have attached a paper on the role of business ownership in shaping Australia over the past three decades.

The insights are many, including the big shift into professional services and the increased number of sole traders and businesses employing up to 4 staff which points to a culture of relentless entrepreneurship.

In fact the number of owner-managers since 1991 has increased from 1.5 million to around 2.3 million today and although these owner-managers now employ more staff their share of the total workforce has actually reduced to 17%.

So, where do we go from here?

Click to read.

 

26 Feb 2020

Return Expectations: The Big Shift

Back in 2010 an investor could achieve a 4.0% per annum return without taking large risk with the capital invested by purchasing government and or corporate bonds.

Today, to get the same return an investor has to take more than double the risk.

The collapse of interest rates globally has caused a big downward shift in the risk return profile for all asset classes and the hard truth is that we will need to accept less capital accumulation for retirement.

Click for chart.

However all is not lost because even with forecasted lower rates of return, regular disciplined saving will still have a material positive impact on the final size of your capital accumulation for retirement.

 

21 Feb 2020

The Five Laws of Gold

In 1926 George S Clason first published a famous series of pamphlets on thrift and financial success using parables from ancient Babylonian clay tablets.

These pamphlets were latter incorporated into his book, The Richest Man in Babylon and the following five laws of Gold are from that book-

 

The First Law of Gold

Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family. This law always sayeth that the more Gold I accumulate, the more readily it comes to me and in increased quantities.

 

The Second Law of Gold

Gold laboureth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field. Gold indeed is a willing worker. To every man who hath a store of Gold set by, opportunity comes for its most profitable use.

 

The Third Law of Gold

Gold clingeth to the protection of the cautions owner who invests it under the advice of men wise in its handling. Gold, indeed, clingeth to the cautious owner, even as it flees the careless owner.

 

The Fourth Law of Gold

Gold slipped away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep. Therefore, the inexperienced owner of Gold who trusts to his own judgment and invests it in business or purposes with which he is not familiar, too often finds his judgment imperfect, and pays with his treasure for his inexperienced.

 

The Fifth Law of Gold

Gold flees the man who should force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment. Fanciful propositions that thrill like adventure tales always come to the new owner of Gold.

 

If you substitute the word Gold for Money, has anything really changed in the 8,000 years that have elapsed since ancient Babylon times when it comes to accumulating wealth?

 

14 Feb 2020

Friday Tidbit

Why can’t we focus anymore?

Could it be because focused single tasking is thought to be less efficient than its sophisticated (and overrated cousin) multitasking?

Enjoy the insightful read.

Click to read.

 

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