12:40 AM Tuesday 12 December, 2017

Buy & Hold Australian Blue Chip Stocks – Are you Crazy?

worldWhat’s the best way to get some growth from your portfolio?

So often we hear people say that you should buy a few Australian Blue Chip stocks and hold them long term…  Well they’ve got it wrong!

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Many Happy Returns

christmascrystalballIt’s that time of the year when the talking heads of television and the prognosticators of print issue their sage outlooks for the coming 12 months. While this crystal ball gazing is always entertaining, it becomes even more so a year later.

 

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High returns with low risk; you can’t lose right?

riskreturn‘Safe investments with high returns’

‘Want the flexibility to maximise gains and minimise losses?’

‘Take advantage of rising markets and protect the downside’

‘High income with a capital guarantee’

Whenever I see these sorts of headlines or slogans, I get a shiver down my spine… and any prudent investor should run for cover.  Why?  Because there is always a catch.

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Three common misconceptions about aged care fees

Elderly-coupleThe aged care system is an extremely complex maze.  The most important aspect of the whole process is to make sure your loved one makes a smooth transition into the most suitable accommodation.  Whilst assisting many clients find their way through the convoluted fee structures, I have found that most people have similar common misconceptions.

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RBA cuts rates by 0.25% – What did your bank do?

Percentagesigndown-largeThe Reserve Bank of Australia has cut interest rates by 0.25%.

The cut to 2.50% is a fresh historic low and represented the eighth reduction this cycle.

While this has various implications for businesses, exchange rates, residential property and our economy overall, the impact on households is direct through mortgage rates.  And the big question is how much of the cut will be passed onto borrowers by the banks.

 

So what has your bank done following the central bank’s rate cut?  And what interest rate are you paying now compared to others?

Rate Cut

New Standard Variable Rate

RBA Cash Rate

0.25%

2.50%

ANZ 0.25% 5.88%
NAB

0.25%

5.88%

Commonwealth Bank 0.25%

5.90%

Westpac

0.28%

5.98%

Remember that the standard variable rate is just that… their standard.  This means that in most cases you can ask your bank manager for a discount and get a better deal.

Do you have insurance through a large super fund? Beware the traps and the increasing costs…

increasing costsPersonal insurance is a must have for protection against any potential health disasters.  For those already retired, you should make sure your children have adequate insurance so that if they face a health disaster, you don’t become their insurance policy and jeopardise your own retirement.

One of the benefits of holding insurance through a large group superannuation fund is that members often benefit from features such as automatic acceptance, no underwriting and low cost cover.  These characteristics sound great, but members need to be aware that there may be potential traps.  Here I discuss just a couple of things to look out for before you can rest easy that your insurance cover is adequate.

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Gold – Some Safe Haven!

by Jim Parker

goldGold is frequently cited in the media as a safe haven asset that offers stability in a diversified portfolio and an anchor in uncertain times. The reality, however, frequently falls short of the billing.

By the end of 2012, after a dozen consecutive years of price gains by gold, many analysts were rewriting the record books and predicting stratospheric gains for the precious metal on expectations of perceived “safe haven” flows.

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RBA cuts rates by 0.25% – What did your bank do?

Percentagesigndown-largeThe Reserve Bank of Australia has cut interest rates by 0.25%.

While this has various implications for businesses, exchange rates, residential property and our economy overall, the impact on households is direct through mortgage rates.  And the big question is how much of the cut will be passed onto borrowers by the banks.

So what has your bank done following the central bank’s rate cut?  And what interest rate are you paying now compared to others?

The big surprise is that ANZ has made a cut to their standard variable rate that is HIGHER than the RBA cut!

Rate Cut

New Standard Variable Rate

RBA Cash Rate

0.25%

2.75%

ANZ 0.27% 6.13%
NAB

0.25%

6.13%

Commonwealth Bank  0.25%

6.15%

Westpac

0.25%

6.26%

Remember that the standard variable rate is just that… their standard.  This means that in most cases you can ask your bank manager for a discount and get a better deal.

Running to Stand Still

by Jim Parker

running wheelTrying to correctly time your entry point to the market is never easy. Just ask the experts.

In early February, strategists at a global investment bank were becoming alarmed at political events in Europe, the sequestration “crisis” in the US Congress and what they saw as an unseemly rush into equities.

The word went out to their clients to put a tactical alert on stock investing over the next one to six months.

A month later, however, the bank strategists1 decided to reverse course. The problems in Europe, they now discerned, were not systemic, and the likelihood was that continuing easy monetary policy would support investor sentiment globally.

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Is now the time to buy shares??

stockmarketWith the recent strong performance of shares in Australia and around the world, you may be asking yourself this question.  Well the answer is… maybe, maybe not!

What do the leading economists foresee in the financial indicators?

What are the stock analysts predicting for company forward earnings estimates?

What are the ‘gurus’ saying in the media about the best place to put your money?

In fact, none of these things is very relevant for most investors!  Yes, that’s right… you don’t need to ‘predict the future’ to know whether you should be buying shares… and which ones to buy.

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