Latest News from Newealth

5 Dec 2018

Asset Class Returns: The long view

Often it is hard to see the wood for the trees and that very much applies to investing because it can take decades to find out the real outcome of your past investment decision.

This is a key reason for why we follow the investment philosophy of Benjamin Graham, the Father of Value Investing.

Attached is a chart that plots the very best and the very worst 12 month performance for each asset class since 1993 using indices.

The message, the very best returns have been delivered by growth assets (property and shares) and to get these very best returns you will need to endure through negative performance.

So when fear and panic take hold during the next financial catastrophe, investors will be presented with the opportunity to buy more quality assets at discounted prices.

Click to view.

WARNING, past performance is no guarantee of future performance and the above does not constitute Personal Advice.

 

27 Nov 2018

Taxation: Rising tax burden

It is now a fact.

What you have long suspected is true.

Taxation in Australia has been increasing and you are paying more tax.

Click to read.

 

23 Nov 2018

50 million

The Australian Bureau of Statistics (ABS) has released population forecasts for Australia which on a best case scenario see us reaching 50 million by 2066.

Let’s put aside the fact that some of us may not be around in 2066.

The implication, assuming the population does increase, is multiple decades of increasing consumption of goods and services which is good for business and good for property prices.

This does not mean that we are immune from a property crash and or a share market crash and or a bond market crash along the way which is defined as a fall of 20% or more from recent peak.

So remember, when fear and panic take hold during the next financial catastrophe, investors will be presented with the opportunity to buy more quality assets at discounted prices.

Click to read.

 

22 Nov 2018

Late 1930’s

Ray Dalio is the Founder of Bridgewater which is the largest hedge fund in the World with US$160 billion in assets and he likens the World today to the late 1930’s.

Is he right or overly pessimistic?

You be the judge.

Click to watch.

 

13 Nov 2018

China: Stepping into the future

This is an excellent research paper on China detailing its current position as the World’s second largest economy, the specific goals for its 13th Five Year Plan and the two key risks that it faces (high debt levels and trade tariffs).

Enjoy.

Click to read.

 

7 Nov 2018

Newealth FSG & CG (November 2018)

We have updated our Financial Services Guide and Credit Guide to include the newly created Australian Financial Complaints Authority (AFCA).

For more details, click ‘Newealth FSG & CG’ or alternatively go to the FINANCIAL SERVICES GUIDE & CREDIT GUIDE link at bottom of the page.

 

5 Nov 2018

Educating Children: How to raise rich kids

Have been sitting on this post from earlier in the year and reflecting on it messages.

It is true that money does not make you happy (there are lots of rich miserable people) but it certainly does make life easier.

Click to read.

 

29 Oct 2018

Aged Care: Family Home Assessment

This is a complex area and we are getting increasing numbers of questions about Aged Care and the impact on the principal family residence.

The fact is that once we enter Age Care we almost never come back home because we need help with the daily activities of living.

It is sobering when you consider that there are only two paths to death.

Either we are healthy and pass away through a sudden event such as an accident, heart attack or we become disabled and then pass away.

We have attached a technical paper on the topic to give you an idea of how complex this area becomes and why advice is needed.

Click to read.

 

25 Oct 2018

Interest Rates: Yield Curve

The normal is for long term interest rates to be higher than short term interest rates.

However short term interest rates are rising which is flattening the yield curve.

The concern is when the yield curve becomes inverted (short term interest rate are higher than long term interest rates) because in the past this has marked the beginning of an economic downturn.

Currently the US 3 month Treasury Bill Rate is 2.34% (was 1.09% 12 months ago) and the US 10 year US Treasury Bond Rate is 3.10% (was 2.39% 12 months ago).

The gap has narrowed from 1.3% to 0.76% which is why we are seeing the yield curve flatten.

Click for Yield Curve Basics.

 

19 Oct 2018

Market Metrics: S&P 500 Index

FAANG stocks (Facebook, Amazon, Apple, Netflix, Google) are part of the S&P 500 Information Technology Index which is one of 11 sectors that make up the S&P 500 Index.

To understand why the S&P 500 Index reached record levels this year you need to go no further than to look at the performance of the S&P 500 Information Technology Index which is up 600% since the 2008 Global Financial Crisis.

The current price to earnings ratio for the FAANG stocks are stretched but not at hallucinating levels apart from Amazon and Netflix.

Now it is very possible that these lofty valuations could persist for some time further before this second longest bull market in US history comes to an end.

Click to view.

 

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