As global economies adjust to the withdrawal of trillions of dollars of stimulus post-Covid, inflation is remaining stubbornly high alongside ongoing conflict in Ukraine, elevated energy and commodities prices and China’s reopening from Omicron BF.7.

Wuhan -- Hankou station after lockdown

Central banks around the world are continuing to raise interest rates in an attempt to contain inflation. The US is leading the way as the Federal Reserve Chairman continues to hold a firm line against higher prices and persistently strong employment & wages growth. Australia’s Reserve Bank is on a similar path but to a lesser degree, given that the US is doing some of the heavy lifting for Australia as it slows global growth overall.

The pressing questions on everyone’s lips are:

  • How high will interest rates go?
  • Are we heading into a recession?
  • Will it be a soft or hard landing?
  • Are we already in a recession?

As long as core inflation stays above the major central banks’ target levels (typically 2-3%), there are likely to be several more interest rate increases interjected with a pause or two across the 2023 calendar year.

Whether interest rates continue to rise, stay level or even drop again beyond 2024 is unknown depending on economic data, the lag effect and the answers to the questions above.

Professional economists are forecasting the possibility of a recession at a higher rate than anytime over the past decade and Google searches of the word “recession” hit an all-time high in 2022.  A key indicator for an impending recession is a sustained period of ‘yield curve inversion’, which is where short term Government bond rates (2 yr) are higher than the long term (10 yr) rates. This has been the case in the US since the end of last year and points to economic growth slowing in the longer term, more than in the short term, and a pending recession.

The Good News

If a recession does come, it will happen with a backdrop that includes a historically strong employment market, which would hopefully bring about a less severe, shallow recession. In Australia’s case we also have an abundance of natural resources that the world needs and we are benefiting from higher commodity prices and the strong US dollar. This may assist us avoid a technical recession altogether i.e. two consecutive quarters of negative economic growth. However, this remains to be seen and will also depend a lot on what happens in the US and other major economies around the world.

feather making a soft landing

The employment market is only one piece of evidence that counters the recession narrative. There are others as well, which include:

  • LVMH (parent company of Louis Vuitton, Tiffany & Co, Fendi) reported record numbers in the first nine months of last year. Consumers are spending aggressively on luxury items.
  • Airline fares, up 28% versus last year represent the second fastest growing category in the inflation index (behind fuel oil), and travel demand has soared despite the cost.

arrow with slight upward trend held in hands

Lagging Data

These results do not necessarily feel like a recession. However, we note that the data is lagging and captures what has already happened. It’s possible the environment could be much different six months from now, emphasising that it’s not possible to predict outcomes, but that taking a long-term view is key to being adequately prepared.

From an investment standpoint, we take solace in the fact the stock market and economic cycle don’t move in unison. The worst performance of the stock market is usually observed in the 12 months leading up to a recession rather than during the recession itself. There have been exceptions, but markets generally tend to be forward-looking while economic data is backward-looking.

Stunning sunset on a beach in Thailand

Let’s not forget lessons from recent history. Only two years ago we had an economic deterioration while the stock market moved higher. It’s certainly possible the same thing could happen again this year.

We are hopeful 2023 will be a smoother ride than 2022. But we are confident that together, we can navigate whatever the future holds, and we look forward to supporting you throughout the journey.

As usual, please contact us if you would like to discuss any of the above in relation to your circumstances, your financial advice and strategy areas, or your structures and investments.

Balancing a revenue windfall, pre-election promises, structural spending demands & persistent inflation pressures


The Labor Government under Anthony Albanese has implemented its election policies and expects lower budget deficits in the next two years thanks to increased tax revenues from higher commodity prices and other savings.

However, future years are expected to bring significant deterioration to the economy as structural spending pressures, higher interest rates and lower productivity impact growth. As the Treasurer Jim Chalmers foreshadowed, this is largely a “bread and butter” budget with no changes to personal income tax rates. Any other significant reforms being planned by the Labor Government across income tax rates or superannuation were not addressed in this budget and if they are applicable could be announced in next year’s 2023 Federal Budget in May.


  • Yet another revenue windfall from high commodity prices and the offsetting of new spending with the savings, has resulted in sharply lower budget deficits over the next 2 years (the deficit this year has been revised down to $36.9bn from $78bn forecast in March 2022). This avoids adding to inflation and the pressure on the Reserve Bank of Australia (RBA) to keep raising interest rates.
  • Budget deficit projections are now worse beyond 2024-2025 and will most likely lead to the Treasurer Jim Chalmers looking for was to increase fiscal (tax) revenues or cut spending in next May’s budget.
  • There has been a realistic attempt to highlight the structural pressure on the budget whilst focussing on the cost of living pressures affecting less affluent Australians.
  • The economic assumptions used in the budget look reasonable and Australia’s public debt remains low compared to other comparable countries, which will assist the Government retain its triple A credit rating.
  • Commodity price assumptions used in the budget remain well below current levels and so could be a source of surprise to reduce the deficit further.

Key proposals

  • Reducing eligibility age for Downsizer Contributions from 60 to 55.
  • Increasing Commonwealth Seniors Health Card income thresholds.
  • Allowing pension age social security recipients to earn more from employment before their payment is impacted.
  • More generous eligibility rules for Child Care Subsidy and Parental Leave Pay.
  • More favourable Centrelink assessment of home sale proceeds.
  • Continued support for homebuyers, and
  • Increased funding for the National Disability Insurance Scheme (NDIS).

Please note: The announced changes are proposals only and may or may not be made law.
The successful implementation of the measures will require successful negotiation through the Senate where the Government does not hold a majority. Therefore, The final version of these measures may differ from the current announcements.

albanese-chalmers photo



Personal Taxation

  • No changes to personal income tax: The Budget did not contain any measures announcing changes to personal income tax. This includes:
    • No changes to the Stage 3 tax cuts (announced by the former Liberal Government) which are still tabled to take effect from 1 July 2024, and
    • No extension of the Low and Middle Income Tax Offset, which ended 30 June 2022.
  • Helping enable electric car purchases: For purchases of battery, hydrogen, or plug-in hybrid cars with a retail price below $84,619 (the luxury car tax threshold for fuel efficient vehicles) after 1 July 2022, fringe benefits tax and import tariffs will not apply. Note: Employers will still need to account for the cost in an employee’s reportable fringe benefits.

No changes to personal tax rates and thresholds

personal-tax-rates chart

Home Ownership

  • Housing affordability measures: A key focus of the Budget were measures to help individuals secure housing. This is expected to occur largely via the Housing Accord – which will bring Federal, State and Local Governments together to work on housing affordability and homelessness. Measures announced include:
    • A commitment to the ‘Help to Buy’ scheme which will support first home buyers to buy a home with the Federal Government being a part owner, resulting in a lower balance to be funded by the individual themselves.
    • A Regional First Home Buyer Guarantee from 1 October 2022 which, similar to the existing First Home Deposit Guarantee scheme, is expected to provide up to 10,000 first home buyers with a guarantee over their mortgage, removing the need for lenders mortgage insurance


  • Expanding eligibility for the Downsizer Contribution: Legislation has been introduced to reduce the Downsizer Contribution eligibility age from 60 to 55 years of age. This measure will allow more people to make a further contributions of up to $300,000 each to their Superannuation after selling their family home owned for more than 10 years. The measure is proposed to take effect from the first quarter after passing into law, which is expected to be 1 January 2023.
  • SMSF and tax residency: The Government confirmed its intention to continue with the 2021/22 Budget measure of extending the temporary trustee absence period from two years to five years and removing the ‘active member’ test. These changes will help SMSFs continue to maintain their Australian tax residency even while members are overseas, and allow them to continue to contribute to their funds even if they become non-tax residents.
  • Three-year audit cycle for SMSFs not proceeding: Originally announced as part of the 2018/19 Budget, it was confirmed the current Government will not proceed with this measure.

Social Security

Childcare subsidy graph

  • Child care subsidy changes: As part of a package of reforms to encourage parents to return to the workforce, the maximum child care subsidy from 1 July 2023 will increase to 90% for families earning less than $80,000. For every $5,000 earned over this threshold the subsidy will reduce by 1% – reducing to zero for incomes $530,000 or above. The higher rate of subsidy for families with multiple children in care will continue under its current arrangements, ceasing once the eldest child reaches six years old or has been out of care for 26 weeks.
  • Paid parental leave increases: Announced before the Budget, from 1 July 2024 the Paid Parental Leave Scheme will increase the maximum period of leave by two weeks each year – reaching a maximum of 26 weeks by 1 July 2026. Further, from 1 July 2023 both parents will be able to access leave at the same time or enter into more flexible arrangements than currently available under the limited Dad and Partner Pay limits, and requirements to take 12 weeks as a continuous period. The paid parental leave income test will also be extended to include a $350,000 family income test, which can be used to help families who do not meet the individual income test.
  • Reducing assessment of former home proceeds: For individuals on social security benefits, the temporary assets test exemption of home sale proceeds is to be extended from 12 months to 24 months. Additionally, these proceeds will only be deemed to earn a return at the lower deeming rate (currently 0.25% per annum) for this period. Note: This exemption only applies to the portion of the proceeds expected to be used in a new home purchase.
  • Work Bonus deposit for older Australians: Announced as an outcome from the Jobs and Skills Summit, age pensioners and veterans over service pension age are expected to receive a one-off credit of $4,000 into their Work Bonus income bank. The Work Bonus typically offsets $300 per fortnight of income earned from employment or self-employment activities, allowing pensioners to receive a higher age pension whilst still working.
  • Increased income thresholds for Commonwealth Seniors Health Card: The Government has committed to increasing the income thresholds to qualify for the Commonwealth Seniors Health Card from $61,284 to $90,000 for singles, and from $98,054 to $144,000 combined for couples. This measure creates an opportunity for more senior Australians to access reduced costs for healthcare, pharmaceuticals, utilities and transport and more.
  • Deeming rate freeze: The Government has also confirmed its intention to retain the current deeming rates until at least 30 June 2024.
  • Plan for cheaper medicines: From 1 January 2023, the general patient co-payment for Pharmaceutical Benefits Scheme treatments is expected to reduce from $42.50 to $30.

Implications for asset classes and investments in Australia

  • Cash and term deposits: Returns on Cash accounts are improving thanks to the current RBA interest rate hikes but still remain historically low. Term Deposits rates being paid by some banks for longer terms such as 12 Months, are becoming more attractive at 3.8% and higher levels.
  • Bonds: The RBA has hiked interest rates rapidly from 0.10% to 2.60% since April 2022, and are widely expected to increase rates further in November and December 2022 by 0.25% or 0.50% before pausing early in early 2023.
    • The need to keep increasing rates is due to persistently high inflation, full employment and overheating markets following the trillions of dollars of stimulus injected into the economy along with interest rate cuts following the breakout of the COVID-19 pandemic in early 2020.
    • Further rate hikes and forecast budget deficits (albeit deficits may now be lower than expected) will continue to add upwards pressure to bond yields in the near term.
    • Investors who purchased fixed rate and long duration bonds purchased before the recent interest rate increases have lost capital value in those bonds. In fact, bonds have dropped over -12% in the last 6-9 months. Bond markets are reaching the peak in this cycle and have now pricing in yields around 4% (compared to 0.20% 6 months ago).
    • As the impacts of higher interest rates and other Government austerity measures are felt, inflation and the economy growth will start to show more signs of contraction. Current bonds yields at around 4% and higher are becoming attractive in anticipation of this, and we are positioned to take advantage of buying opportunities as they arise for your portfolio.
  • Shares: The budget is positive for childcare and construction companies but beyond that there is not really a lot to impact the share market. However, we are continuing to focus on high quality Australian and International companies that have strong competitive positions in their markets, resilient earnings, positive cash flows and low levels of debt.
  • Property: The confirmation of more homebuyer schemes and more immigrants offset by long term housing supply measures in the budget are unlikely to alter the dominant negative impact of rising mortgage rates in driving a cyclical downturn in home prices into 2023.
  • The Australia Dollar (AUD): the Budget is unlikely to change the direction for the AUD, particularly against the strong USD as inflation remains high and the US Federal Reserve continues to hike interest rates.

The above budget initiatives have the potential to deliver benefits to you depending on your financial situation, personal circumstances and stage in life. Please contact us if you would like to discuss any of this further.

As usual, we are looking forward to continuing to assist you confirm the important financial strategy areas relevant to you and provide advice to maximise your outcomes in the long term future.


As the post-pandemic economic recovery continues to take shape, Australian Federal Treasurer Josh Frydenberg has handed down the 2022-23 Federal Budget

Among the proposed changes, the Morrison Government has announced a pre-election cash splash and plans for lower budget deficits in the coming years.

The additional spending relates mainly to this calendar year, and given the stronger than expected economy it looks to be more motivated by politics than economics. “Fiscal repair” kicks in for the medium-term but this takes the form of restrained spending growth in contrast to the last two budgets, rather than austerity. Despite this, the Government is able to announce lower budget deficit projections thanks to a windfall from faster growth and higher commodity prices which is resulting in faster tax collections and lower welfare spending.

Key points

  • A budget windfall has allowed both more spending and projected lower budget deficits, with the 2022-23 budget deficit expected to be $80bn (down from $99bn in December 2021).
  • Key measures include one-off “cost of living” payments, a temporary cut to fuel excise, more spending on infrastructure & defence, more help for home buyers, and the continuation of the 50% reduction in minimum Pension drawdown rates from superannuation.
  • Relying mainly on nominal economic growth to reduce the deficit and debt, the Government runs the risk that it could take a very long time to get back to budget surpluses and repay the almost $1 Trillion debt to a reasonable level.

Economic assumptions

  • The Government revised up its growth forecasts for this financial year (from 3.75% to 4.25%) and kept 2022-23 GDP growth unchanged at 3.5%.
  • Unemployment is expected to fall to 3.75% by June 2023 (down from 4.25%).
  • Inflation and wages forecasts have also been revised up significantly.
  • Net immigration (estimated to be +41,000 this year rising to +235,000 by 2025-26) becoming more of a growth support.
  • The Government pushed out its $US55/tonne iron ore price assumption to September quarter 2022. While iron remains around $US135/tonne, it is a source of revenue upside.

Table of Economic Assumptions for Real GDP - Inflation - Wages - Unemployment

Read on for a round-up of how the proposals might affect your household expenses and financial future.

Remember, many of these proposals could change as legislation passes through parliament.


Temporarily extending the minimum Pension drawdown relief

Proposed effective date: 1 July 2022

The temporary reduction to the minimum income drawdown requirement for superannuation Pensions will be further extended until 30 June 2023.

This will allow people to minimise the need to sell down assets given ongoing market volatility. It applies to account-based, transition to retirement and term allocated superannuation Pensions.

For the 2022-23 financial year, the proposed minimum Pension drawdown will be:

Table showing the proposed minimum pension drawdown



  1. Temporarily cutting fuel excise

    Proposed effective date: 30 March 2022
    Fuel excise will temporarily be cut by half, or 22.1 cents per litre, to save families an estimated $30 a week. This measure will end on 28 September 2022.

  2. Increasing the Low and Middle Income Tax Offset (LMITO)

    Proposed effective date: 1 July 2021

    • The LMITO will be increased to up to $1,500 for the 2021-22 financial year. All eligible LMITO recipients will benefit from the full $420 increase, referred to as the Cost of Living Tax Offset.
    • The benefit for those earning up to $37,000 will be $675 (currently $255).
    • For those earning between $37,000 and $48,000, the offset will increase at the rate of 7.5 cents per $1 above $37,000 to a maximum of $1,500 (currently $1,080).
    • Those earning between $48,000 and $90,000 are eligible for the maximum LMITO benefit of $1,500 (currently $1,080).
    • For income above $90,000, the offset phases out at a rate of 3 cents per $1 and is not available when taxable income exceeds $126,000.
    • The LMITO is due to end on 30 June 2022 and has not been extended.
    Personal tax rates, thresholds and offsets
    Table showing Personal Tax rates and Thresholds

    The Low Income Tax Offset (LITO) remains unchanged at $700 and will be reduced at a rate of:
    — 5 cents per $1 for income between $37,500 and $45,000, and
    — 1.5 cents per $1 for income between $45,000 and $66,667.
    Effective tax-free threshold (2021-22) with LMITO and LITO:
    — $25,437 for individuals below Age Pension age (some Medicare levy may be payable).

  3. Increasing the Medicare levy low-income thresholds

    Proposed effective date: 1 July 2021
    Low-income taxpayers will generally continue to be exempt from paying the Medicare levy.
    — Singles will be increased from $23,226 to $23,365
    — Families will be increased from $39,167 to $39,402
    — Single seniors and pensioners will be increased from $36,705 to $36,925
    — Families (seniors and pensioners) will be increased from $51,094 to $51,401.
    For each dependent child or student, the family income thresholds increase by a further $3,619.

Social security, families and aged care

  1. Introducing a one-off cost of living payment

    Proposed effective date: 28 April 2022 onwards

    To help with higher cost of living pressures, the Government will provide a one-off tax-free payment of $250 to Australians who receive qualifying social security payments or hold eligible concession cards, including:
    — Age Pension
    — Disability Support Pension
    — Carer Payment
    — Carer Allowance Jobseeker Payment
    — Pensioner Concession Card holders
    —  Commonwealth Seniors Health Card holders.

    An individual can only receive one payment, even if they’re eligible for multiple benefits or concession cards.

  2. Enhancing the Paid Parental Leave scheme

    Proposed effective date: 1 July 2023

    Currently, the Paid Parental Leave scheme is made up of two payments for eligible carers of a newborn or recently adopted child:
    — Parental Leave Pay of up to 18 weeks at a rate based on the national minimum wage.
    — Dad and Partner Pay of up to 2 weeks at a rate based on the national minimum wage.

    The Government plans to create a single scheme of up to 20 weeks, fully flexible and shareable for working parents within two years of their child’s birth or adoption. Single parents will also benefit from the extended 20-week entitlement.

    The income test will also be broadened. Parents who don’t meet the individual income threshold (currently $151,350) can still qualify for payment if they meet a family income threshold of $350,000 a year.

  3. Lowering the Pharmaceutical Benefits Scheme (PBS) threshold

    Effective date: 1 July 2022

    The Government will reduce the PBS safety net thresholds to support people who have a high demand for prescription medicines due to their health needs.

    This means approximately 12 fewer scripts for concessional patients and 2 fewer scripts for general patients a year.

    On reaching the PBS safety net, concessional patients will receive their PBS medicines at no cost for the rest of the year, and general patients will pay the concessional co-payment rate (currently $6.80 per prescription).

Housing Affordability

Expanding the Home Guarantee Scheme

Proposed effective date: 1 July 2022 or 1 October 2022 depending on the specific scheme

The Home Guarantee Scheme allows first home buyers to build or purchase a newly built home with a low deposit, replacing the need for commercial lenders’ mortgage insurance.

The Government is expanding the scheme to make available:
  • 35,000 guarantees each year (up from the current 10,000) from 1 July 2022 under the First Home Guarantee, to support eligible first homebuyers to build or purchase a newly built home with a deposit as low as 5%.
  • 10,000 guarantees each year from 1 October 2022 to 30 June 2025 under a new Regional Home Guarantee, to support eligible homebuyers (including non-first home buyers and permanent residents), to purchase or construct a new home in regional areas with a deposit as low as 5%.
  • 5,000 guarantees each year from 1 July 2022 to 30 June 2025 to expand the Family Home Guarantee. This program enables eligible single parents with dependants to enter or re-enter the housing market with a deposit as little as 2%.

Eligible first home buyers may also be able to take advantage of the First Home Super Saver Scheme which allows them to use the concessionally taxed super system to save their first home deposit. Other federal and state grants and stamp duty concessions may also be available.

Assessment and summary

This is very much a pre-election Budget with few direct losers (e.g. tax avoiders) and lots of winners – including low and middle income taxpayers, welfare recipients, motorists, first home buyers, parents with young children, older super members, apprentices, builders, small business owners, defence industries, transport users, tourism operators, and even Koalas.

The Budget has a number of things to commend it:
  • Medium term structural spending is no longer being ramped up faster than the economy.
  • Most of the budget windfall from stronger growth and higher commodity prices is being put to deficit reduction and hence long-term debt stabilisation (unlike last year when it was mostly spent), and
  • The annual addition to infrastructure spending along with measures like the Apprenticeship Incentive Scheme will provide some boost to productive potential.
However, at a micro level the Budget may be criticised on the grounds that:
  • The temporary fuel excise reduction is bad economic policy in that, it may be very hard to reverse if oil prices keep rising or stay high, it will make no sense if oil prices fall back on say a Ukraine peace deal, and it sets a bad precedent.
  • Many welfare recipients are arguably getting compensated for “cost of living” pressures twice – via the one of payment and via the indexation of payments to inflation, and
  • The housing measures continue to focus more on demand than supply which will result in higher than otherwise home prices (even though they are unlikely to prevent the cyclical downturn in prices now starting) and will boost debt levels.
At a macro-economic level there are two big risks flowing from the Budget:
  1. Firstly, the pre-election cash splash (which is about 1% of GDP in terms of new stimulus in the Budget for this calendar year, but is actually a bit more if spending of the $16bn in “decisions taken but not yet announced” in the Mid-Year Economic and Fiscal Outlook (MYEFO) are allowed for) risks overstimulating the economy at a time when it is already strong, further adding to inflationary pressures and adding to the amount by which the Reserve Bank of Australia (RBA) will have to hike interest rates, and
  2. Secondly the reliance on growing the economy to reduce the budget deficit and debt is unlikely to reduce debt quickly enough and is dependent on interest rates remaining low relative to economic growth. 10-year bond yields have already gone up more than four-fold since their 2020 low warning of a sharp increase in debt interest payments beyond the medium term. And economic growth is unlikely to be anywhere near strong enough to reduce the debt burden like it did in the post-WW2 period unless there is another immigration boom or 1980s style focus on boosting productivity – both of which look unlikely. In the meantime, the strategy would be highly vulnerable if anything came along to curtail the commodity boom. So at some point tough decisions are likely to be required either to reduce spending as a share of GDP or raise taxes.

Implications for the RBA

It is now likely that the RBA will start raising interest rates in the period June to August 2022, with the cash rate expected to reach 0.75% – 1.00% by year end and 1.50% – 1.75% in 2023. The extra stimulus in the Budget increases the chance that the first rate hike will be 0.40% rather than 0.15% (taking the cash rate to 0.50% after the first increase).

Implications for Australian Assets

  • Cash and Term Deposits – Cash returns are poor but they will start to rise as the RBA starts hiking from mid-year.
  • Bonds – Ongoing budget deficits add to upwards pressure on Bond yields. Where the rising trend in yields results in capital loss, total Bond returns (income + capital) will remain low for the medium-term.
  • Shares – More fiscal stimulus (tax breaks), strong growth and relatively low interest rates all remain supportive of Australian shares. However, rising Bond yields and RBA rate hikes will result in a more constrained and volatile ride.
  • Property – More home buyer incentives are unlikely to offset the negative impact of poor affordability and rising mortgage rates in driving a cyclical downturn in home prices.
  • The Australian Dollar (AUD) – Strong commodity prices point to more upside.

As always, please contact our office if you would like to discuss any of the above in relation to your specific circumstances.



The Russia/Ukraine situation has intensified over the past few days. We can’t yet know the lasting effects, but we are staying focused on ensuring your financial strategies and investments are positioned to minimise risk and deliver your long term objectives.

This communication is to keep you up to date with our early observations regarding the Russian concerns and open a dialogue if you want to discuss your current position and ongoing financial strategies.


Perspective about the Ukraine/Russian situation

This geopolitical event is concerning on practically every level, leaving a wide range of potential outcomes and scenarios. Putting aside views on the way this might evolve, our role is to look at this financially and ensure you are secure. This requires us to avoid prediction and instead use multiple layers of thought.

  • Let’s start with the good news – your direct exposure to Russia and Ukraine is negligible. We do maintain exposure to emerging markets given the attractive valuations and diversification, but the weightings to Russia and Ukraine are small. For example, Russian companies only account for around 2.8% of the emerging market basket for equities and around 4.1% for bonds. Ukraine doesn’t even register on the factsheets because it is so small. (Perversely, if prices in these regions fall significantly, the expected reward for buying these markets might exceed the risk – creating a buying opportunity. However, that isn’t the case right now).
  • Moving to knock-on effects, the risks are more notable, but we do see some offsetting positives. Again, starting with the good news, the tensions are pushing commodity prices higher. This has supported sentiment toward energy companies, which have done very well for your portfolio of late. We also apply a long term, valuation-driven focus to your investments (preferring cheaper assets) which tend to do well in this kind of environment, so we have another ballast. That said, we can’t rule out an exodus of investor money if things deteriorate quickly i.e. people panicking and selling at the wrong time. We never expect straight lines in markets, and if negativity really takes hold, it could open a world of opportunity to add undervalued assets to your mix.

In case it wasn’t obvious from the above, we are monitoring this situation closely and hearing from a range of industry experts to understand the impact as it evolves. Ultimately, we are keeping a close eye on any consequential impacts and given everything we know (while acknowledging the unknowable), it reinforces the benefits of a long-term, valuation driven approach. In this regard, your investments remain well positioned to navigate this uncertain period, keeping you on the path to achieving what’s important to you in life.

If anything changes, we’ll be sure to let you know, but for now we hope you find this touchpoint useful.

As always, please don’t hesitate to contact us if you have any questions or issues.


We’d like to share what’s on our mind with you. We believe that remaining grounded by the principles of good investing is key as we continue to learn to navigate the difficulties of COVID, lockdowns and what the world will look like as we move forward.

Sharemarkets are up strongly from pandemic induced lows in March 2020Sharemarkets-are-up-strongly

Economic and investment key point summary

  • Expect ongoing economic recovery driven by stimulus, vaccines and reopening, albeit with bumps along the way.
  • Australian economic growth to contract sharply in the September 2021 quarter with recovery resuming later in 2021 and into 2022. Although “learning to live with COVID” may constrain economic growth initially.
  • Spike in headline inflation is likely to be transitory and reflects base effects, higher commodity prices and goods supply bottlenecks. Underlying inflation to remain more constrained beyond this.
  • Low global interest rates and tax stimulus to remain, but will start to be gradually unwound.
  • Expect the first Reserve Bank of Australia (RBA) rate hike in late 2023 or early 2024.
  • Shares likely to see more constrained gains and volatility, but provide good returns on a 12 month view helped by rising company earnings.
  • Key risks are inflation, new COVID, manufacturing supply blockages, tensions with China.

Triumph of the optimists

Investing is an exercise in optimism. Every time we purchase an asset, we’re demonstrating confidence in the future. That is, that companies will grow their profits, borrowers will repay their debts and governments will allow capital to move freely around the world. Without optimism, there could be no investment markets or entrepreneurship. However, too much optimism can be dangerous for investors as it can alter our behaviour, leading us to take too much risk without being adequately compensated.

Australian shares offer a very attractive yield versus bank deposits

Australia shares offer a very attractive yield

What we’re looking for, then, is balance. That is, to be neither alarmist nor greedy. On the plus side, we’ve got ultra-low interest rates, high savings rates, surging residential housing prices and an economic recovery – all pointing towards continued demand for growth assets and a reason behind the strong investor interest. But on the downside, it has become apparent that a record number of “new” investors are entering the scene with high expectations of quick gains.

This has been confirmed to us in recent surveys, especially one by UK based asset manager Natixis, who found that investors currently expect a return from equities of 14.5% above inflation (keep in mind, this was a large study of 8,550 people). If we assume long term inflation is 2%, this equates to around 360% over the next 10 years[1]. While such a return is not impossible, the odds are only around 7.35% according to calculations done by research house Morningstar[2]. Even more strikingly, this probability falls to just 0.36% when the starting point is at an all-time high like today (a 1 in 277 chance). Sounds less appealing doesn’t it.

Especially when a new investor doesn’t know if well known companies listed on the ASX are ‘fair value’ or not after they have generally experienced strong growth in the past year. It is important to research whether individual companies have been pushed above their fair values with investors ‘chasing income’ (or dividends and yield) because they are getting very little interest paid on Cash held in the bank (the RBA official cash rate is currently 0.10%); or whether a new investor is drawn to an exciting new tech stock or crypto currency that has never made a profit and who’s share price is currently valued at more than 1000 times it’s proposed earnings.

The second 12 months after a sharemarket recovery normally sees lower returns


Monetary Policy and Quantitative Easing (QE)

With interest rates at near zero, the Reserve Bank of Australia has clearly stated they will stick to their current policy of QE (buying Government bonds) at $5 billion a week until February 2022, at which point they will taper down to $4 billion a week for another three months. Given the ongoing lockdowns in Sydney and Melbourne it’s doubtful the Australian economy will have recovered quickly enough for the RBA to have reduced and ceased bond buying before the start of 2023. The RBA has also stated they will not raise interest rates until full employment and sustained wages growth has occurred, which could be some time away.

Elsewhere in the world, the US is continuing to reopen, and the Federal Reserve has signaled that it will start reducing (tapering) it’s bond buying as soon as November and possibly begin to raise interest rates next year. The UK and parts of Europe are following suit. China’s economy has slowed not helped by COVID, property overbuilding and high debt levels, but expect renewed policy easing to drive stronger growth.

Inflation is spiking near term

Sharemarkets don’t like uncertainty, and the threat of inflation will bring concern, periods of volatility and constrained gains compared to the last 18 months. However, base inflation effects are likely to reverse as production and manufacturing recovers from the COVID induced supply chain bottlenecks. On the other hand rising company earnings on the back of economic recovery coming out of COVID are likely to provide good returns on 12 month view.

While the near term spike in inflation is likely to be transitory, the 40 year declining trend in inflation and bond yields looks to have bottomed out. How long bonds bounces along the bottom is unknown and dependent on the rate of economic growth and inflation. Certain types of high quality short duration bonds will still be important diversifiers of risk.

Bond yields have likely seen their lows, expect poor medium term bond returns.


Get advice and utilise market leading research and investment management specialists

The key message from us, in times like today, is that is more important than ever to keep our investing ego at the door. We remain focused on having the smartest minds on our team and investing with conviction, of course, as that is where intelligent gains are made. In truth, we’ve made some very healthy gains and I’m delighted with the progress that has been made for all our clients. Even better, we’re staying true to your risk tolerance and making decisions that are appropriate for your investment timeframes. This is important to us, and we hope to you as well.

So, we’ll continue to cheer gains, but remember that the assessment of ‘risk’ means understanding that more things can happen than what will actually happen. Across history there have been plenty of “life changing” events that derailed unwitting investors. We understand the power of developing a professional plan specific to you, implementing the best financial strategies, assisting you stay on track and achieve financial success as you move through the stages of your life… Our Approach Helps You Make Smarter Financial Decisions – Fintech.

The most powerful force in the universe

To finish off, the chart below highlights an incredible example of the exponential power of ‘compound interest’ over the very long term. $1 invested in 1900 in Australian Cash and left to compound is now worth $242. If invested and left to compound in Australian Bonds it did much better at $1,010. Incredibly, the same $1 left to compound in Australian Shares is now worth $768,822. Albert Einstein knew that compound interest had the potential to change lives. Einstein famously said that compound interest is the most powerful force in the universe. He also said, “Compound interest is the 8th wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”

Shares versus bonds & cash over very long term – Australia


We hope you find this helpful. If you would like us to elaborate further, we’d be delighted to chat.

[2] Morningstar Investment Management calculations, Robert Shiller data, from 1/1/1881 to 31/7/2021.

Featured photo by Tomasz Frankowski on Unsplash

Biden makes ground as postal votes are counted

Joe Biden is in the box seat to become America’s 46th president after clinching two crucial Midwest states as Donald Trump escalated lawsuits and claims of vote fraud. The nail biting finish isn’t anything like the landslide the Democrats had hoped for, but it now looks very likely that Biden will get there after an intense 24 hours of vote counting and dramatic scenes involving protesters across the US.

Legal challenges brought by President Trump in the tightly contested states of Pennsylvania, Michigan and Georgia are unlikely to derail a Biden victory, with only one case so far filed deemed legally substantive enough to make it to the US Supreme Court.

At last count, Biden has won the most votes in American presidential history, with more than 72.1 million versus Trump’s 68.6 million. Biden currently sits on 264 Electoral College Votes to Trumps 214, and now effectively needs only one of four undecided states (Nevada, Pennsylvania, North Carolina or Georgia) to get the 270 tally needed to win.

How are investment markets responding?

Following on from today’s events and our previous update Support for Trump surges as Biden clings to hope of victory, we believe that a Biden win and a likely gridlocked US Congress (upper and lower houses) will provide the best case scenario for investment markets going forward. The All Ordinaries Index in Australia gaining 1.26% today on a good lead from the US markets overnight as likelihood of this scenario dramatically increased.

Joe Biden and the Democrats current position gives them control of the House of Representatives (lower house), but not enough to take control of the Senate (upper house) from the Republican’s. This means that Democrat Joe Biden’s plan to increase corporate taxes to 28% (from the 21% rate introduced by Trump), spend more on infrastructure, introduce more ambitious climate change measures and transition away from the oil and gas industry, faces a Senate roadblock. A major crackdown on the big technology platforms like Google and Facebook is also less likely under a divided White House and Senate, and sharemarkets like the prospect of this outcome.

Further to this, Biden is expected to be a more conciliatory and statesman like President, particularly on the trade and foreign policy issues that have bothered markets under Trump’s Presidency. Biden is set to have a more moderate discussion globally, and a more normal discussion about foreign policy and global institutions. We believe markets will respond well to Biden’s approach.

Bond markets have already priced in a Senate gridlock on fiscal (tax) stimulus, shares are adjusting as growth stocks rally on lower bond yields, and the possibility of further US Federal Reserve support (printing of money). If the final outcome is as we expect, Biden is likely to be more supportive of emerging markets and the trade rhetoric will be wound back.

On climate, Biden’s pledge to immediately re-join the Paris climate change accord can be done with the stroke of a presidential pen and without congressional approval, just as president Barack Obama did.


What’s next for Australia?

For Australia there are few direct implications other than the likelihood of more steady regional policy. This comes as the car market is showing signs of recovery after the Coronavirus induced slump earlier this year. The Federal Chamber of Automotive Industries says 81,220 new cars and trucks were sold in October, down just 1.5% on the same month last year. This indicates that the tax cuts and business tax incentives introduced by the Frydenberg-Morrison Government are taking effect. The Australian Bureau of Statistics also reported the trade balance in September increased $3 billion to $5.63 billion. It was the 33rd successive monthly trade surplus, with export values up 4% and imports down 6%. In addition to the further reduction of the official cash rate to a record low of 0.10% by the Reserve Bank of Australia on 3 November, these factors are indicating positive signs for Australia’s economic recovery post the Coronavirus induced shutdown and recession.

Back in the US, until the counting of every last vote is done, a Republican sweep of the Senate and Trump retaining the Presidency still remains a slight possibility. Although very unlikely, this outcome would also continue to support markets, but the main risk would be a more uncertain and disruptive trade and foreign policy which would potentially be more unsettling for emerging markets.

Whatever the outcome, the US election result is likely to have a short term impact as market expectations re-set to the expected US Congress gridlock and any impact on the level of additional stimulus spending. Ultimately returns are driven by company earnings and at this stage the earnings outlook for 2021 has improved sharply from a very low base in early 2020. However, clearly the impacts of the Coronavirus pandemic will continue to hang over markets once the election headlines settle.


Virus cases hit new record in the US

 Whilst the election has been dominating the media, the US has passed a grim milestone in the Coronavirus pandemic, with more than 100,000 new cases reported in a single day – the highest ever reported by any country in the world.

Coronavirus deaths are trending higher but not at the same rate as cases, which is the only positive news in a very bad situation. Sadly, the total cases of the virus recorded in the US are about to surpass 10,000,000 and total deaths 240,000.

The US and the world is anticipating that one of the vaccines in final phase trials will be approved as early as December this year, so that mass production can commence as quickly as possible. News of this outcome is likely to provide a further boost to sharemarkets around the world. However, supply will be a significant challenge, and if an effective and safe vaccine is found, there may be an initial reluctance to take the vaccine.

The four vaccine candidates in Australia

It has been reported in the press that Australian manufacturing of the AstraZeneca vaccine will begin next week. This vaccine is seen as the leading contender for success but has not yet been approved for use.

In addition to the CSL/University of Queensland vaccine, AstraZeneca is one of four vaccine candidates that the Australian Government has now invested in after deals with NovaVax and Pfizer were announced on Thursday 29 October 2020.

The Government is hoping that at least one proves to be effective in creating immunity to Coronavirus.

Below is a graph of how the four vaccine candidates stack up.

What does this mean for your investments?

With coronavirus risks still high until a safe and effective vaccine is finalised, investment markets may see more volatility, even though the outlook looks positive for the US election result.

Your high quality well-diversified portfolios utilising the best investment research available, are well positioned to take advantage of the long term growth, with the lowest possible risk.

Some key points on the investment outlook:

  • After a strong rally from March lows, shares remain vulnerable to short term setbacks given uncertainties around Coronavirus and the final US election result. However, on a 6 to 12 month view shares are expected to see reasonable returns helped by a pick-up in economic activity and the massive policy stimulus by central banks around the world.
  • Very low (or negative) interest rates around the world mean that bond and fixed interest investments will earn very little and are facing the very real prospect of capital losses. Great care must be taken with bonds and fixed interest investments going forward.
  • Cash and bank deposit returns are likely to be very poor at less than 0.30% following the RBA’s cutting of the cash rate to 0.10%. A very low official cash rate and low inflation is likely to stick around for the foreseeable future, even years, as spare capacity is worked out of the economy. Determining what the important short term strategy needs are for you, and where capital stability is required is more important than ever.
  • We also see opportunities to take advantage of investments that produce consistent and tax-effective income streams for your longer term objectives.
  • Commercial property and infrastructure are ultimately likely to benefit from a resumption of the search for yield, but the hit to economic activity and hence rents from the virus will weigh heavily on near term returns, providing some opportunities for the longer term.
  • Home prices are expected to stagnate into next year as higher unemployment, a stop to immigration and the weak rental market impact.
  • The Government’s $200 billion Quantitative Easing (printing money) program, which includes issuing another $100 billion Government Bonds to the major banks at the 0.10% interest rate, is providing very cheap funding for lending. Other stimulus packages including first home buyers grants are likely to stimulate the property market for those that are still in jobs, or can borrow.
  • Although the $Australian Dollar is vulnerable to uncertainty about the global recovery and US/China & Australia/China political tensions, a continuing rising trend is likely if there is viable vaccine and threat from Coronavirus recedes.

As a final point, we recommend that you turn down the noise from the US elections and the Coronavirus pandemic and maintain focus on strategies that will maximise your long term outcomes. Please contact us if you have any questions specific to your personal situation.

The world is preparing for a protracted US election result, with no victory declaration made tonight (4 November 2020).

Key states of Pennsylvania, Michigan and Wisconsin remain too close to call and results may take days to confirm. Brace yourself for more action, as the probability of a contested election result and protracted legal manoeuvring has risen dramatically.

Democratic nominee Joe Biden’s path to victory narrowed over the course of the day as President Donald Trump outperformed expectations in the key battleground states. The Senate result also appears too close to call, throwing further doubt onto the overall composition of the US Government.

The Democrats hopes of gaining a swing in voters concerned about President Trump’s management of the coronavirus pandemic, the economy and race relations has not fully materialised. Even though voter turnout has broken records, America appears to remain bitterly divided on many issues.

USA Split

Investment markets were prepared to absorb a clear victory by either of the two candidates but uncertainties associated with a disputed election will most likely bring short term share market volatility.

Importantly, your investments are well positioned to take advantage of buying opportunities that may arise to assist you achieve your long term goals. We remain dedicated to understanding what’s important to you and delivering the best possible financial advice and strategy solutions to ensure your outcomes are maximised, and you can enjoy life.

While President Trump insists he’s won BIG in the election, it is not completely clear that he has enough lead in key states to get across the line again. On the other hand, a Joe Biden blue wave scenario has been ruled out and he is clinging to hope he can become president as all the postal votes (expected to favour the Democrats) are counted.

The current tally of Electoral College vote is 238 for Democrat Joe Biden and 213 for Trump.

Whoever reaches 270 votes will become president.

USA Election Map 2020

We will keep you posted, as the composition of the US Government becomes clear and what this is likely to mean for your financial strategies and investments going forward.

In the meantime, turn down the noise of the US election result and stay well and happy.


Three important ways to think about investing in the current markets

  1. Portfolio falls are temporary moves that become permanent losses only when investments are sold
  2. Market volatility can be an investment opportunity for the longer-term.
  3. Investment success shouldn’t be measured against beating short-term returns – it’s about being on track with the right strategies to achieve your important financial and lifestyle goals

COVID-19 has brought massive short-term changes to our world, economy, and markets. Looking back on the first quarter of 2020, there’s a dizzying amount of data and information to digest and understand. So, here are a few important but simple points to keep in mind about investment markets, despite the unusual times we’re in.

Selling Locks in Losses

Falls in investment values don’t become losses unless they are sold when markets are down. Faced with this information, you might expect all investors to simply stay invested through market uncertainty. However, this is often not the case, even when investors know what’s right. People’s emotions can get the better of them, leading to decisions that can erode the value of their portfolios and make it hard to stay focused on the important financial and investment strategies that will maximise their financial outcomes.

Conversely, investors that stick to their strategy (that is, re-balancing or behaving counter-cyclically after a market decline) tend to produce better results over the long term than medium-term trend followers. That is, those that sell after falls and buy after rallies.

Selling after a market decline, locks in not just one loss, but likely two. Historically, markets have typically rebounded after a large decline. If you get out of the market, it’s very likely that you’ll miss the rebound. Missing the rebound is not just a lost opportunity, it statistically sets you up for lower long-term returns than if you hadn’t done anything.

Exhibit 1 illustrates this point. It shows $1 invested in the equity markets, represented by the MSCI USA Index, at the beginning of the year 2000. Three scenarios emerge from the global financial crisis in 2008-2009:

  1. One investor holds on after the fall
  2. One sells and waits a year before buying back in, and
  3. One gets out and stays in cash

The decision makes a significant impact on portfolio returns, with the one staying put ending with $312, nearly 50% more than the one who spent a year in cash, and almost 5 times the value of the one who got out of stocks and stayed out.

Exhibit 1. The importance of staying invested - Graph

Market declines, even double digit ones are to be expected from time to time. In fact, the willingness to see portfolio values move around is one reason our clients are rewarded for investing over the long term. We think staying focused on the long term can help people make better short-term decisions.

Taking Advantage of a Market Decline

For investors that think about markets in a long-term way, market volatility presents an investment opportunity not a risk. Imagine that you own a farm, and every day your next door neighbour offers to either buy your farm or sell you his farm. Some days, when crop prices are high, he may offer you way more for your farm than it’s probably worth, and when crop prices fall, he offers you his farm for peanuts.

When prices are low and people are selling, should that make you want to sell? Should your neighbour’s depressed mood lead you to sell? Because that seems to us to be the best time to buy. A better time to sell would be when your neighbour is very optimistic and you can get a much higher price for your farm.

We think it’s the same with investment markets, they are there to serve us, to allow us to buy when prices are low and to sell when prices are high. Don’t follow the herd, they’re not looking out for you.

Again, looking at past market declines can give us a better idea about what typically happens in these environments. Exhibit 2 shows that the three and five year returns after a decline are significantly positive. Only the dot-com bubble burst was not followed by a considerable increase, largely because the global financial crisis intervened. For most, however, crises represented opportunities to invest.

Exhibit 2. Market recoveries after bear markets - Graph

Am I on Track?

Investments are one of the six areas of financial advice that require strategies as part of an ongoing plan to achieve the financial goals that are important to you in life …click here to see Fintech’s full spectrum approach. For most individuals, important underlying questions are often centred around “will I have enough money” and “am I on track?” Well designed financial strategies do not rely solely on investment returns. But we know that many people substitute an evaluation of their investment performance in the short-term for a sense of their progress toward their goals in life. Evaluating the portfolio tends to lead to simplistically comparing portfolio performance to benchmarks or peer groups. This is an incomplete way to the assess investment strategies, but more importantly it can focus investor attention on the short term. This can unwittingly lead to wealth destruction if the investor lets fear or greed override their emotions and decision making – switching from one strategy to the next (again, see Exhibit 1).

We think a better question to ask is whether the financial strategies that make up your plan are still appropriate and will maximising your overall progress towards your goals. Bringing the conversation back to the purpose of the plan and the time frames involved, can help shift the conversation from short-term performance to achieving the things that are most important to you over the long-term. This also allows for the power of compounding returns to weave it’s magic, or as Einstein famously put it “the eighth wonder of the world”.

Plans that are built for volatility and with redundancy, recognise that investment returns can be uncertain when viewed with a short-term focus. However, by having your investment structures professionally designed and implemented as part of your overall financial strategies, you are able to overcome uncertainty and stick to your plan. Despite short-term declines, your long term goals are able to remain on track with the right financial advice and strategies in place.

Exhibit 3. Shifting focus from markets to long term goals - Graph

It is especially important in times of disruption and uncertainty to focus on these three points, and take advantages of the opportunities that arise through periods of market volatility!

Please stay safe and well while the Coronavirus runs its course.

Keeping you informed during the coronavirus pandemic.

We appreciate that you and your family are dealing with a significant amount of information relating to the global COVID-19 pandemic. As a highly valued client of Fintech Financial Services, we want to share with you important changes to Super and Account Based Pensions (Pensions), and keep you informed.

You will also find the latest updates from us on COVID-19 (Coronavirus) and investment markets on our website at

Government measures announced on 22 March

Prime Minister & Treasurer

Two important changes to Super and Pensions were announced by the Prime Minister, Scott Morrison and the Federal Treasurer Josh Frydenberg on 22 March 2020. The measures provide temporary relief to those experiencing financial challenges due to the economic impacts relating to the containment of the Coronavirus. This is part of the Government’s Economic Response to the Coronavirus.

We believe that this response is a considered, pragmatic and caring move for a nation under stress. The announcement also reflects the strength of our superannuation system and the fact it was built for the well being and livelihoods of Australians.

The measures include:

  • Reduced minimum Pension drawdown rates for retirees
    The Government is temporarily reducing minimum drawdown requirements for Pensions and similar products by 50% for the 2019-2020 and 2020-2021 financial years.
  • Temporary early access to Super
    Eligible individuals in extreme financial stress will be allowed early access to their Super of up to $10,000 before 1 July 2020, and up to a further $10,000 from 1 July 2020. Meaning, if eligible, you may be able to access up to $20,000 overall.

 1. Reduced minimum drawdown rates for retirees


The reduction in the minimum drawdown by 50% will provide assistance if you wish to reduce the impact of drawing down on your Super during this time of market crisis and lower investment values. The measures will also assist those who have reduced expense needs during the ‘stay at home’ phase of the Coronavirus, or have access to other sources of cash and income from outside their Super Fund.

Of course for those still able to contribute to Super or who have cash available to invest, the high levels of market volatility are providing extremely attractive long term buying opportunities.

The reduced minimums are now available to everyone with an Account Based Pension, Allocated Pension, Transition To Retirement (TTR) Pension and Term Allocated Pension as per the table below.

Pension Table

Note: The above minimum withdrawal factors are indicative and subject to change by the ATO. The method for calculating the reduced minimum drawdown amount for market linked income streams or Term Allocated Pensions (TAPs) will be different. For more information go to

Next steps / action required

Please contact our office by email to or by calling us on telephone 07 3252 7665 if you would like to change your pension payments relating to the periods below:

NB: If you wish to maintain your current Pension arrangements ongoing, you need do nothing more.

a) From Now to 30 June 2020
If you have received monthly Pension payments throughout the financial year, you may wish to cease the remaining months of May and June 2020.

b) From 1 July 2020 to 30 June 2021
You also have the option to reduce your Pension drawdowns by up to 50% of the minimum relating to your Age for the period 1 July 2020 to 30 June 2021, as per the table above.

2. Application for early release of up to $10,000 from Superannuation available from 20 April 2020

centrelink queue

The Government has also announced that individuals suffering from extreme financial stress will be allowed early withdrawal of up to $10,000 from their super on compassionate grounds, in each of the 2019-2020 and 2020-2021 financial years, subject to certain eligibility criteria.

For more details on eligibility or to apply for early release, please go to

For anyone considering early withdrawal, there are a number of things to consider, including the impact on any insurance held in super, and the fact that withdrawing funds from super will reduce retirement savings.

We are here to provide the best possible advice and financial outcomes for you

Please contact us on 07 3252 7665 if you have any questions about any of the above.

For full details on the Australian Government’s Economic Response to the Coronavirus, visit

Please take care of yourself and your family while the Coronavirus runs its course.

Further to my recent updates relating to the Coronavirus, you may feel like the sky is falling at the moment. It’s an anxious time, but I wanted to provide some reassurance and perspective.

  • We had positioned your portfolio defensively leading into this period of volatility. A focus on preserving capital remains very much top of Fintech’s mind at this time.
  • We have been through many instances of this type of market volatility in the past and while the catalyst for a sell off may be different each time, the way that humans respond in these situations is surprisingly consistent. We don’t like the feelings of uncertainty and anxiety, and we are more likely to sell our assets at any price, just to get rid of them so we no longer feel sick in the stomach. This is panic, not rational behaviour. Fintech believes that there is evidence of this irrational behaviour happening right now. When irrational investors reacted to markets overnight, selling was indiscriminate; very little was spared. Such is the panic among some investors at the moment.
  • While we don’t know how coronavirus will ultimately unfold, nor what the humanitarian and economic cost will be, the same investment process that Fintech applies for you in any other market conditions, typically works in these types of environments too. There is a high risk of further short term market volatility. However, we remain focused on identifying the long term buying opportunities that invariably arise when markets overshoot on the downside, due to investor fear and panic.
  • As one of the world’s most successful investors, Warren Buffet has famously quoted…
    • “Widespread fear is your friend as an investor because it serves up bargain purchases.”
    • “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
    • “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

Remember that selling out crystallises losses, making them permanent. I encourage you to watch this video from Daniel Needham, Chief Investment Officer at Morningstar WATCH HERE.

As always, please contact our office if you wish to discuss any of the above in relation to your situation.

Thank you,