Welcome to the May 2012 newsletter

The 1st of May 2012 may well be remembered as the day that investors began to start falling out of love with term deposits as rates start to fall below the psychological 5% level. There has been a dramatic growth in term deposits, particularly from the onset of the GFC, The RBA’s recent move will force term deposit yields lower. It is not often that dividend yields are higher than bond and term deposit yields. Whereas stocks like Telstra are trading on a forecast of 10-12 % gross yields. Some bank shares are now paying dividends of around double the rate of their term deposits at around 8-9% gross. It really is time to buy the bank shares and not the deposit. Even with no Growth on these shares the returns look likely to beat deposits rates. This should begin to have a flow on affect for rest of the market and will help the non mining sector begin to recover.

This month as the end of financial year approaches we have an article on how to reduce your tax and when it comes to family trusts we look at how it can become a minefield and how even the super rich can get it wrong.

As always we welcome your feedback.

Kind regards,

Editor: Gordon Hatch, Taurus Group
Please contact me at Gordon@taurusfinancial.com.au