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Market volatility refers to extreme price movements over a given period. These movements may occur in a particular area, such as real estate or shares, and may be upward or downward. Ever since COVID-19 started spreading across the world in late 2019, affecting every aspect of our lives, the term ‘market volatility’ has been hitting headlines. But, what does market volatility mean? And what might it mean for your finances? Market volatility can feel like a one-off crisis. However, it’s important to remember that volatility is in the very nature of markets. Fluctuations are bound to occur and, sometimes, they’re …

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You might be leaving the country for a variety of reasons – career prospects, love, adventure, new opportunities – or you may be returning home. While you’ve probably got a checklist of things to cover off before you jet, spare a thought for any super you might’ve accumulated while you’ve been working in Australia. What can I do with my super if I’m an Aussie citizen or permanent resident leaving the country? Even if you’re leaving the country permanently, if you’re an Australian citizen or permanent resident, generally your super remains in Australia and subject to the usual rules. What …

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Most of us have heard of the main asset classes: shares, property, fixed interest and cash, but alternative assets are less well known. However, these types of assets can provide further diversification and enhanced returns for your super. Alternative investments are those found outside the traditional asset classes. Typical ones include real estate, private equity, venture capital, infrastructure, renewable energy, hedge funds, commodities, and private debt. Generally, these are assets that aren’t correlated to the performance of the sharemarket, that is they can often perform when sharemarket returns are down or flat. The net result is that alternative investments add …

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Investment bonds are long-term investments that may offer tax efficiency to investors on a high marginal tax rate and those investing for children or grandchildren. Unlike traditional investment products, such as managed funds, bonds are a ‘tax paid’ investment. This means that tax on investment earnings is paid at the applicable company rate of 30 per cent by the bond issuer – not by you, the investor. Investors receive ‘tax paid’ returns provided they meet certain conditions – most notably that the investment is held for at least ten years and contributions do not exceed the 125% rule. 125% rule …

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Investors with long memories – or a good education – will recall the bad old days when inflation was the economic bogeyman. It broke Germany’s Weimar Republic in the 1930s and nearly cratered America’s economy in the 1970s. Fortunately, inflation has been a non-issue in Western economies for decades. But is that about to change? In the first quarter of FY2021, Australian inflation ran at a comfortable 1.1%. By the second quarter it had leaped to 3.8%. Perpetual’s recent Quarterly Update summed up the problem: “With very easy monetary policy likely to continue for the next couple of years, and …

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Investors remained focused on rising inflation and the possibility of policy settings being tightened worldwide. Bond yields continued to rise – particularly in Australia – as investors brought forward their expectations for interest rate hikes. This hampered returns from fixed income markets. Equity markets performed much more strongly, aided by the release of pleasing corporate results for the September quarter. Australia: The latest surveys indicate conditions have improved modestly for both manufacturers and services companies, although backward-looking economic data were largely ignored given recent restrictions in NSW and Victoria. Instead, like elsewhere, the main focus was on potential changes to …

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You’ve worked tirelessly to own the home of your dreams. But if you suffered from an injury or illness that prevents you from working, would you be able to cover your mortgage repayments? A government report by the Australian Institute of Health and Welfare found that accidents were one of the leading causes of death for people aged 1-44 and cancer remains one of the leading causes of death for people aged 45–74. Whether you’re involved in a car accident or suffer from cancer, you want to spend time focusing on getting back to health rather than worrying about finances …

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Generally, a property, including a taxpayer’s main residence, ie their family home, is considered to be a Capital Gains Tax (CGT) asset. When CGT assets are sold, taxpayers may be liable to pay tax on all, or part, of the capital gain. However, tax law provides an exemption for a dwelling that is the taxpayer’s main residence, where certain criteria are satisfied. This exemption means there will generally be no tax liability for the taxpayer upon the sale of the main residence. To be eligible for the main residence exemption, the following conditions must be satisfied: the taxpayer is an …

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