THE ADVISER MONTHLY
VOLUME II. ISSUE 4. APRIL 2022.
THE STORIES SO FAR
Welcome to the April edition of The Adviser Monthly!
We have had some major changes occur in March and April already with the budget in full effect and the May federal election on the horizon.
Firstly, both the labour party and the coalition included some details of the expansion of the first home loan deposit scheme in their policy platforms. This move offers some pros and cons, which you’ll read about below.
If you haven’t already, you can check out our 2022 Federal Budget infographic that summarises some of the critical allotments in specific sectors, as well as the accompanying article that talks about how the budget changes will affect you.
Interest rates have remained on hold for April, with the Reserve Bank taking a ‘patient’ approach on rates for now. However, with inflation at 3.5% and tipped to go higher, the RBA is expected to begin lifting rates later this year. Understand how this affects you and the so-called ‘yield curve.’
In these turbulent economic times, it is important to stay focused on the basic principles of successful investing. This is why we have included an article on the five great charts to help illuminate the key aspects of investing. These are the power of compound interest; the investment cycle; the roller coaster of investor emotion; the wall of worry; and time is on your side.
Finally, the world’s billionaires have amassed $5 trillion since March 2021 alone. Do you know who has made it into the highest ranks?
The team at Make Work Optional wishes you a safe and Happy Easter and Anzac Day long weekend. We hope you enjoy some time out with family and friends.
THE 2022 FEDERAL BUDGET EXPLAINED
Millions of Australians will get a one-off $1,500 tax cut this year, while others will receive a one-off $250 payment, as part of measures announced in last night’s Federal Budget. The cost of living was a key focus of the Budget, with Treasurer Josh Frydenberg announcing measures targeted at low- and middle-income earners, pensioners, motorists and more. Here’s what it could mean for you.
THE RICHEST PEOPLE IN THE WORLD 2022
Today, the 10 richest people in the world control $1.3 trillion in wealth. This scale of wealth is equal to approximately 1.4% of the world economy, Amazon’s entire market cap, or spending $1 million a day for 3,000 years. It’s double the amount seen just two years ago ($663 billion). The question is: who’s on top of the list? Here’s a snapshot of the world’s richest in 2022, based on data from the Forbes Real-Time Billionaires List.
RBA KEEPS INTEREST RATE ON HOLD
Inflation has increased sharply in many parts of the world. Ongoing supply-side problems, Russia’s invasion of Ukraine and strong demand as economies recover from the pandemic are all contributing to the upward pressure on prices. In response, bond yields have risen and expectations of future policy interest rates have increased. In response, the RBA Board decided to maintain the cash rate target at 10 basis points.
EXPANDED HOME LOAN GUARANTEES PROS AND CONS
Homeownership in Australia is embedded in wealth accumulation, security of tenure and security in retirement. In other words, homeownership in Australia makes life a lot easier in the long run than renting. While surveys indicate most Australians want to own their own home, the latest available data shows only 66% of households do. But with home loan guarantees expanded, can this change? Explore the pros and cons here.
THE YIELD CURVE HAS INVERTED; NOW WHAT?
For most investors, most of the time, overall interest rates matter more than the so-called yield curve, which is the difference between yields for similar bonds with different maturities. On rare occasions, however, the yield curve does something that causes real concern: it inverts, and it could stay this way through 2022. Find out what this means and why it may be less worrisome than in the past.
5 INVESTING CHARTS USEFUL IN UNCERTAIN TIMES
Investing is often seen as complicated. This was made worse by the increasing complexity of investment products; rules and regulations; and the expanding ways to access and transact in various investments. But at its core, the basic principles of successful investing are simple & timeless. In this article, Dr Shane Oliver, AMP Chief Economist, shares five charts for understanding investing.
Thought to live by.
It is better to be roughly right than to precisely wrong.
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