- Australian Shares down 39% over the year.
- Listed Commercial Property down 54%.
- RBA cut interest rates to 4.25%
- International Banks collapsing.
The Australian economy has held up well to the crisis, however we will be seeing the on going effects this year. We expect the RBA to cut cash rates by another 1% this year, and the Government to announce another "package" to address the current economic situation.
Many people made the mistake of assuming that investment markets will always "go up", and have relearned the painful lessons of the past. Interestingly many people now believe that investment markets will always "go down" and destroy your wealth. Neither belief is correct. Investing is about putting a plan in place; following the plan; and understanding that your investments will need to be monitored and looked after.
2009 Action!
Following the declines in 2008, many Australian companies are now very cheap.
Traditionally this has been a strong buying opportunity for investors. So despite the economic conditions we recommend that investors look to build their investments slowly and gradually over the next six months. This is to take advantage of the current low prices, by dollar cost averaging with small monthly buy instructions.
This year interest rates should fall and it may be worthwhile fixing interest rates to lock in the cheap loan repayments.
Life Insurance costs have fallen over the past two years so it is worthwhile asking us to review your insurances to see if there is a better or cheaper policy available for you.
Particularly for people closer to retirement we recommend that you review your retirement planning goals. Please contact our office if you would like us to be involved in this process.
December review!
The Lonsec December Review is an excellent summary of what has happened over the past few months. Click the link below to read the review!