Happy New (Financial) Year!! As it’s the beginning of a new year, we’ve been reflecting on the wild year that was. Unbelievably, the Australian stock market recorded solid returns (+24%) – courtesy of various government stimulus, while house prices nationally have soared to new heights. Importantly, due to the Australian economy positing significant growth, many economists are now predicting two rate hikes over the next couple of years. If you have a loan, it may be an opportune time to speak with your lender and explore fixing your rate. As we enter 2021/22, it is clear that COVID-19 still dominates the landscape, with the bad news being that countries are still experiencing virus break-outs (Australian included). The good news is that effective vaccines are being distributed across the globe, and the economic outlook will clearly be dictated by the virus, its variants, and how quickly vaccines can stem case numbers. After contracting an estimated 2.3% in 2020, the global economy is tipped to rebound by 6.8% in 2021. On the same basis, the Australian economy is tipped by Commonwealth Bank (CBA) economists to grow by 5.1% in 2021 after contracting 2.4% in calendar 2020. Putting all of this aside, now is the best time to think about what you have achieved, what your new goals are for the year ahead and focus on what you can control. If you’re finding it difficult to save, perhaps consider creating a savings plan and set some clear goals with your finances and check-in with your adviser to make sure you’re on track.
Smart Money Tip:
If you’re preparing to lodge your tax return and have an Income Protection policy paid from a bank account, please remember that these premiums may be tax deductible. Statements confirming premiums paid will be available shortly and will be sent to you once available.
For holders of managed investments via an investment platform, end of financial year statements will also be available soon, we expect to see various platforms make these reports available from late August.
Lastly, if you’re in receipt of an Account Based (allocated) pension through Colonial First State and receive fortnightly pension payments, you may have noticed an irregular payment. As the first pension payment was paid on the 1st July, you’ll be paid 27 payments throughout the year instead of the usual 26. In turn you’ll receive a slightly smaller fortnightly payment to ensure the total annual pension payment remains the same.
Monthly jargon buster – Bear vs. Bull Market
A bear market is typically when the stock market is in a downward trend and stock prices are decreasing. The opposite is a bull market, in which stock prices rise and there is generally a positive outlook within the market.
Synergy Private Wealth