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'Your trusted source for wealth management tips and information.'
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ContinuumFP eNewsletter February, 2017
- a 3-minute read before links
Welcome to our eNews for February - and hasn't the time passed quickly since our last eNews communication?! The long, hot Summer has persisted - and the political scene has deteriorated, both here in Australia and in several spots around the world. The good news is that, to date, financial markets are reacting more to climate effects than they are to the political instability that is growing!
Earlier this month, we published our Economic and Markets Outlook 2017: in that we set the scene that forms the backdrop to how we would approach financial strategies during the coming year (unless significant changes arise to force a tactical reassessment).
The most significant area of uncertainty for most commentators over the early part of Summer, was the then President-in-waiting of the USA, Donald Trump: since his inauguration in late January 2017, we have seen that his strong intent is to implement many of the policies on which he campaigned. Most will be pleased to see that common sense is over-riding any of the more outrageous Executive Orders that the President signs; and the market is pleased to see that he is so consistent - and determined.
The outcome of all of this for the equities and bond markets in the USA, has been positive growth - as had broadly been anticipated once the election outcome in favour of Mr Trump, became more likely. The better-known equity indices (the Dow Jones; and the S&P 500) have set new high closing values - and were setting those readings for a series of several days during February: and in the meantime, the 2-year and the 10-year Bond yields have not increased significantly.
Domestic politics have not been able to deter the local stock market from being relatively stable during this period as well. The All Ords has spent a fair bit of time in the 5700/ 5800s range in spite of the defection of a government Senator, the rise of Pauline Hanson's party - and the petty squabbling between the two majors.
All-in-all, there are no signs at this stage of the year to indicate that the ContinuumFP outlook for 2017 is out of step with the reality, of the markets at least.
A couple of wealth management events that have caused some concern and anxiety however, are Centrelink - and superannuation.
The Age Pension changes that came into effect on 1 January 2017 have had a detrimental effect on a few of our clients and we have been working with them to develop strategies to help them deal with the changes. Whilst this isn't possible in all cases, we have identified some situations that can be managed to offset the loss of support they have experienced.
The superannuation pension account ceiling (of $1,600,000) as at 30 June 2017 is also exercising some of our clients' minds: again, working with them in their respective personal financial circumstances, we are finding ways to minimise the consequences of this change for them.
Whilst these very imminent consequences are effecting some clients, we are also continuing to support clients in their broader needs for advice and service support in relation to investment decisions, superannuation contribution strategies, retirement planning, personal risk insurance portfolio review and estate planning matters.
A Superannuation Contribution strategy opportunity has arisen, that requires urgent action if it is going to be capitalised in time - and that is, by 30 June 2017. Up to that date the nonconcessional contribution (the NCC) cap will be $180,000: from 1 July 2017, that cap reduces to $100,000.
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If you are eligible - and financially able - to take advantage of the current cap: and to bring forward up to 2 more years, there is potential for a significant advantage to your retirement planning utilising the taxation-advantaged superannuation system. See our article Superannuation contribution eligibility for guidance on this topic.
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In considering your retirement plans, the development of a realistic, modestly conservative budget will be helpful in determining how much you need to accumulate to fund the retirement lifestyle you would like to experience. We detail many of the items that need to be considered in this context, in our article Preparing for retirement.
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By way of a closing note, we appreciate the loyalty and support of our clients and look forward to helping with any of the matters raised above - and indeed with any wealth management concerns you may have. As usual, we invite contact through our office phone, or the website Contact Us page - you will always receive prompt and courteous attention (even with our Warwick away on some well-earned Leave for the early part of March).
The Team at
Continuum Financial Planners Pty Ltd
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Continuum Financial Planners Pty Ltd is a Corporate Authorised Representative of Securitor Financial Group Limited ABN 48 009 189 495 | AFSL 240687 Level 8, 260 Queen Street, Brisbane QLD 4000
