Welcome to the June Newsletter
And another end of financial year is upon us…..It has generally been a better year for equity investors and less attractive for cash holders. Unfortunately recent market weakness is taking some of the gloss off impressive returns seen since July.
In the last three weeks the Aussie market has been sold down from 5209 to an intraday low of 4723 - a drop of -486pts or -9.33% which is a pretty savage sell off that was prompted by the sharp drop in the AUD from 105 to 94c. The dollar dropping will be a positive for the economy longer term - but has prompted a clear exodus of overseas money from our market near term. We've then seen a raft of profit warnings from domestic cyclicals- stoking concerns that the Australian economy is really stalling.
It would appear that any sell off would be shallow (-5% max) and that's proved incorrect, but we're starting to see value re-emerge in the market and it seems now the RBA will be forced to cut rates further expanding the interest rate differential between cash and equities.
So with every negative there is a positive. If you missed the first rally, perhaps look to benefit from this dip. Whatever you do make sure you have a considered financial plan for 2013/14.
This month we hear from AMP's, Shane Oliver about the death of risk on/risk off investing. We cover the opportunities in listed property trusts to complement residential property and look at the shortfalls in the National Disability Insurance Scheme and help first home buyers with some advice on government incentives.
A reminder to ensure that you and/or your employer have made your appropriate Superannuation Contributions for the 2012/13 year, which need to be received by your Superannuation Fund before 30th June 2013.
For those clients who are still considering cashing in their Retirement Annuity Policies, please give me a call on (02) 9411-4161 or email gordon@taurusfinancial.com.au
Hope you enjoy this month’s newsletter.
Wishing you a great month ahead.
Regards
Gordon Hatch
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