Welcome to the final instalment of our much-anticipated market update. It comes as no surprise that 2021 has been a challenging year for many. From an economic perspective, we’ve witnessed structural change while concerns remain from a health perspective. As costs of goods increase around the world, economists are predicting that interest rates will begin to rise from 2022 onwards. Although the exact timing remains unknown (due to various factors), home loan rates below 2% are increasingly becoming harder to find and we have noticed that Term Deposits are finally starting their march north! Although retirees may welcome the rise in Term Deposit rates, this will have a direct impact on the values of shares, bonds and property. Generally, when rates rise, we expect to see banking and energy related investments outperform, however diversification during times of extreme uncertainty will be key. Avoiding costly investment mistakes will be crucial as we transition forward. The most common mistakes we find investors make: a. Attempting to “time” the market b. Lack of portfolio diversification c. Neglecting tax implications and opportunities d. Making investment decisions based on emotion e. Not seeking advice Monthly jargon buster – Inflation An increase in the volume of money and credit relative to available goods and services resulting in a continuing rise in the general price level. Smart Money Tip: The festive season can be the most expensive time of year. Between buying gifts, heading to parties and entertaining, the financial pressure can quickly add up. Our suggestion is to set a budget for activities and to plan your spending. We’re not encouraging thriftiness at the expense of your loved ones, but many will agree that fun shared experiences and thoughtful gifts make more of an impact. Spending a lot of money will not make your friends and family feel more loved, but thoughtfulness will. Message from the Synergy Team: Like many at this time of year, Synergy Private Wealth will be closing the office and plan to open again from the 5th of January 2022. Thank you for your support throughout 2021, it has truly been a humbling experience. With this said, we wish you a safe, relaxing and enjoyable Christmas and New Year.
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