March 7, 2018

A retiree’s volatility ‘bucket’

Some retirees and other investors fast-approaching retirement set aside one to two years of living expenses if possible in a cash “bucket”. This is to act as a volatility buffer to try to avoid having to sell growth assets at depressed prices to provide enough retirement income during a market downturn. Critically, a cash bucket should give investors greater peace of mind during difficult investment conditions. In turn, this should help them concentrate on their long-term goals without being distracted by market “noise” and without disturbing their portfolio’s carefully-constructed, target asset allocation. The recent increased volatility and falls on world […]
February 28, 2018

Compounding your rewards

The recent volatility on world stock markets once again highlights one of investment’s fundamental rewards, long-term compounding of returns. Investors who appreciate the rewards of compounding returns – as returns are earned on past returns as well as invested capital – are less likely to be distracted by day-to-day movements in share prices. While abrupt rises and falls on markets grab the headlines and much short-term commentary, compounding silently does its work, adding to investor returns – enhanced by franked dividends on Australian shares. ASIC’s consumer website MoneySmart has a useful online tool to calculate your potential compounding returns based on an […]
February 21, 2018

Potential pension minefields

It has been a big year for the SMSF industry given the major policy changes the federal government made to super in the 2016 budget. Last week the Self-managed Super Fund Association held its national conference in Sydney and it provided a natural forum for the leading practitioners in the SMSF industry to reflect on and debate the impact of the changes on SMSF trustees and how it will affect the operation of funds in the future. Industry practitioners – be they advisers, accountants or lawyers – have had a busy 12 months getting to grips with a myriad of […]