The attached note looks at the equity risk premium – what is it and is it enough? The key points are as follows: – The equity risk premium is the excess return that shares provide over a ‘risk free’ asset like government bonds. – It is perceived that in order to compensate for their greater short-term…
After two weeks of very strong gains, shares are due to a pause. More broadly though, this note looks at outlook for shares. The key points are as follows: – The evidence is continuing to accumulate that shares have embarked on a cyclical recovery. – Further gains are likely: shares are not expensive and an…
As a result of the slump in investment markets last year, most superannuation funds have had another financial year of negative returns, making it two in a row. This note looks at the key issues for investors. The key points are as follows: – While very disconcerting, periodic negative returns from growth assets such as…
This note looks at the outlook for the Australian economy. The key points are as follows: – Australia has so far had a very mild economic downturn compared to other countries and its own history. – However, its likely that the economy went backwards in the June quarter and that this will continue into the…
This note looks at the list of worries being thrown up by commentators and investors in relation to the outlook for shares and other growth assets. The key points are as follows: – There is a long ‘worry list’ being thrown up in regards to the outlook for shares and other growth oriented assets including…
The ATO has reminded employers that their superannuation continues even in these very difficult times. While the value of some super funds has declined recently, super is still the main way many individuals save money to provide benefits for their retirement. Generally, as an employer, you must pay super for your employees if they: –…
This note looks as the outlook for listed property securities (or real estate investment trusts – REITs). The key points are as follows: – Given the damage done to investor confidence by their big slump over the last 18 months, listed property securities are unlikely to soon return to their once exalted status. – However,…
Each year a number of superannuation thresholds are changed to reflect movements in full-time Average Weekly Ordinary Time Earnings (AWOTE). A previous Super Update advised updated thresholds that are based on movements in December quarter AWOTE. However, the 2009 Federal Budget announced changes to superannuation contribution caps. This Super Update updates these superannuation contribution caps…
We are fast approaching the end of another financial year and whilst supplying a Tax Fine Number (TFN) is not mandatory, changes introduced with effect from 1 July 2007 mean that there are implications for employers who have not provided us with their employees’ TFNs. What are an employer’s obligations? When an employee completes a…
Given the complexity of investment markets and investing along with the massive amount of information available to investors many people rely on logic based on ‘common sense’ or simple ‘rules of thumb’ in making investment decisions. However, while some such rules of thumb are reasonable, in many cases they are not and can result in…