Author: lvc-admin

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Super

Superannuation business has progressed and its future prospects

Key focus areas to look for funds

  • Risk and regulation — Ensuring a holistic, integrated approach to risk management, as well as bolstering basic governance frameworks.
  • The Commission’s proposals have legal and regulatory ramifications – Trustees and managers will be subjected to more regulatory scrutiny and enforcement.
  • Financial advice – The recommendations of the Royal Commission and the Productivity Commission have the potential to have a considerable impact on the provision and cost of financial advice.
  • Mergers and industry consolidation — In the coming year, merger announcements are projected to increase.
  • Tax – As many funds alter systems and processes in response to legal changes, the ATO is increasing its inspection in the form of expedited assurance reviews.
  • Increased technology and data investment — to support strategy and differentiation – comes at a time when mandated technology spending demands are increasing.
  • Trust and social licence – It’s critical to put a premium on reputation and involvement while also expressing values and purpose to members and stakeholders.
  • Fund experience and engagement – Funds that provide great individualised services are able to retain and acquire members. Responsible investment is a constant priority for funds as members and stakeholders interact with them.

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Super

Market volatility and its effect on your super

You may learn more about the market and what’s going on right now by reading the information below. This may assist you in determining the impact it may have on your retirement savings.

Depending on how your super is invested, the value of your super can fluctuate on a daily basis. Each investment option’s value and performance are related to the underlying asset classes (types of investments such as shares, property, fixed interest, and so on) it invests in, which change in response to the performance of these assets and the market.

It’s a long-term investment to put money into super. Changing your asset allocation in response to short-term market swings is a big decision that depends on a lot of things, like your age, stage of life, and risk appetite. Before making any changes to your long-term investment strategy, you should obtain guidance.

If you’re still building up your super and won’t be retiring for a while, you might choose to stick with your existing investment strategy rather than trying to time the market. It’s vital to remember that your super’s performance is typically based on how much time you spend in the market, which might be thrown off if you try to “timing the market.”

Switching out of a growth asset class when its performance declines and back in when markets and unit prices rise, for example. It’s tough to predict when the market will peak and bottom, but adhering to your plan over time can put you in a better position to profit from growth while minimising losses. If you’re approaching or in retirement, on the other hand, it’s critical to keep focused on your long-term investing strategy.

When deciding on an investment strategy, it’s also vital to note the benefits of diversification (investing in several asset classes). Diversification reduces risk and mitigates the impact of a big market decline.

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.               

Categories
Debt

RBA could take action on home debt, but it is not the governor’s role to set house price targets, according to Governor.

Lowe also questioned the government’s wage-hike plan in a speech at the Australian Farm Institute conference in Toowoomba,  noting that pay packets were not increasing even in places where the labour market was tight. With 115,200 people joining the workforce in the preceding month, Australia’s unemployment rate fell to 5.1 percent in May, returning to pre-pandemic levels.

The unemployment rate has dropped 0.4 percentage points to 5.1 percent, which is currently 0.2 percentage points lower than the 5.3 percent recorded in March 2020.

Lowe said the surge in household borrowing that has accompanied the boom remained on the bank’s radar as Australian house values soar across the country, particularly in regional areas.

Lowe’s warning comes as the government tries to enact new legislation that would reverse the Gillard administration’s responsible lending standards, which the Treasurer, Josh Frydenberg, has claimed are required to aid the country’s economic recovery. The government has set a target of lowering the unemployment figure to below 5%, claiming that once competition for jobs exceeds this level, wage hikes will certainly follow.

The cause for this, according to Lowe, is that businesses operate in a highly competitive environment, encouraging companies to escalators “non-wage methods” rather than paying more for workers when faced with labour shortages.

Source:  theguardian.com

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Debt

House prices are rising at an alarming rate, posing an economic threat.

The paper, Housing: Taming the Elephant in the Economy, summarises the views of 87 Australian economists and other housing sector professionals on the economic effects of rising home prices. The authors of the paper suggest that this exposes a “ticking economic time bomb” if interest rates rise.

Furthermore, housing prices, which have risen 10% in the year to April, are expected to grow up to 14% in the following year, significantly putting homeowners out of reach for many. Professor Duncan Maclennan, the report’s principal author, stated that the present real estate market is broken on all levels and poses an associated risk to the Australian economy. The report also stated that Australia’s housing system fails young people, who are increasingly being priced out of the market.

Australia’s housing policy has exacerbated income and wealth disparities while also causing severe economic volatility. This is stifling productivity and distorting Australia’s capital-investment patterns.

To improve the housing system, the paper advises a new national housing policy at the Commonwealth level, as well as a permanent housing committee as part of the national cabinet. It also suggests that housing stimulus initiatives be redirected to help the social renting sector.

The authors of the report also advocated for housing market stability to be included in the Reserve Bank of Australia’s legal obligations in order to help preserve a more reasonable market.

Source: news.com.au

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Currencies

Bitcoin is almost in the same position as it was a week ago

According to CoinGecko, it has been flat for the past seven days and down roughly 0.5 percent in the last 24 hours.

Bitcoin did briefly soar above $39,000 the previous Sunday, thanks to a tweet from Tesla CEO Elon Musk (TSLA) – Get Report. It also topped 40,000 last week, but the value for the month has been rather consistent, as it was about $34,473 on May 23. This is good news for a coin that was worth less than $10,000 a year ago and more over $64,000 in April.

In terms of other cryptocurrencies, Ethereum’s ETH has dipped somewhat in the same time frame, hovering around $2,259.81 on Sunday. That’s a 5% drop in a week and a 2.6 percent increase in the last 24 hours.

Dogecoin saw the greatest drop this week, falling nearly 10% to 28 cents. This represents a 2.7 percent decrease in the last 24 hours.

However, bitcoin’s present value demonstrates the currency’s inability to move dramatically up or down in recent weeks. It had dropped precipitously in the months since hitting a high of over $64,000 in mid-April.

Source: thestreet.com

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Super

During the pandemic, Australians dumped more than $3000 down the toilet

Last year, more than three million Australians took $36.4 billion out of their super accounts as part of the early super access plan, which was designed to assist individuals who were financially struggling during COVID-19.

However, if that money had stayed untouched in Australia’s largest superannuation funds, the total would currently be $41.1 billion.

According to a new McKell Institute report, Australians have already lost $4.7 billion in returns in the year since the system was launched.

Following a low in April 2020, the value of Australian super fund indices increased by 15-20% as the economy recovered.

According to the institute’s calculations, somebody who took the maximum $20,000 withdrawal allowed under the early access scheme would have already lost $3644 in investment growth. Is buying high and selling cheap a better strategy? The concept of early super access and the foregone investment profits.

The government early access programme was designed to assist those who were financially impacted by COVID-19 in meeting their expenses.

Those who took advantage of it were not compelled to disclose how they used the money, but they were cautioned to think carefully about the consequences of getting the money so early.

Source:- News.com.au

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Currencies

Cryptocurrency prices on June 17: Bitcoin, Uniswap, and Tether are all down.

The sell-off in major cryptos has hurt other peers’ feelings. According to a poll done by the Bank for International Settlements, central bank digital currencies would complement rather than compete with cryptocurrencies, despite the fact that they are essentially similar to fiat currencies.

“BTC’s upbeat attitude isn’t always in tune with most altcoins on a larger, more general scale. This has been a very typical occurrence, and a pattern is emerging. Altcoins will tend to pull back during a BTC rally, and once BTC has stabilised, an altcoin uptrend will commence, gradually increasing speed “According to ZebPay Trade Desk.

According to opinion poll, more than nine out of ten independent financial advisers in the UK would never advise their clients to invest in cryptocurrencies or “meme stocks.” Meme stocks and digital coins have grown in popularity as a result of the epidemic, which has driven a surge in non-professional stock investment.

BTC’s price surged from $38,200 in early trading hours on Thursday to a high of $39,500 by midday before plunging to a low of $37,365 as bears grabbed control of the market, according to data from Cointelegraph Markets Pro and TradingView.

Increased inflows to spot exchanges were one indicator offered before of Bitcoin’s price crash on June 17, prompting some analysts to speculate that traders who failed to cash out around the high are now locking in wins at lower highs.

Source:-

Crypto News and Economic India

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Debt

The deficit has been lowered to $161 billion while the national debt reaches $1 trillion.

Net debt is expected to reach $617.5 billion, or 30% of GDP, by June 2025, and then climb to $980.6 billion, or 40.9 percent of GDP. This is slightly less than the 2020-21 budget predictions.

In his budget speech, Treasurer Josh Frydenberg noted, “This is modest by worldwide standards. As a percentage of GDP, net debt is around half of what it is in the UK and the US, and less than a third of what it is in Japan. We are in a better position to deal with the approaching economic issues than practically any other country.”

The government had already promised to postpone the dreaded budget repair process until after the next federal election, promising no major cuts or austerity measures until the economy had recovered.

The economy will roar back to life, according to the Treasury, with GDP climbing three percentage points in a year, from 1.25 percent in 2020-21 to 4.25 percent in 2021-22. In the face of the pandemic, the Morrison government is quick to point out that Australia has performed better than most comparable countries. Australia’s economy shrunk by only 2.5 percent, instead of the projected 20% contraction.

The budget is estimated to have contributed to the development of more than 250,000 new jobs by the end of 2022-23. According to the administration, the unemployment rate will rise five times faster than it did during the 1990s recession.

Source:- News.com.au

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Currencies

Is Investing in Cryptocurrency a Good Idea?

The market, however, is constantly changing, and today’s top ten crypto coins aren’t the same as they were even a year ago. Some investments fail, while others go on to become the most profitable assets.

Despite the fact that it has been in operation for ten years, no other asset has ever done as well for early investors as Bitcoin. It’s impossible to predict how high each coin will go. Because cryptocurrencies like Bitcoin, Ethereum, and the others featured in this article are very volatile, trading them rather than investing in them can be the most rewarding way to enter the crypto market.

Bitcoin is a payment currency and cryptocurrency that is secured by a complex mathematical formula that is unbreakable. With the launch of Bitcoin, a whole new industry of competing cryptocurrency coins known as altcoins formed.

When Bitcoin hit its all-time high in 2017, it plummeted by 80%, causing many investors to lose money. Instead of losing money, those who chose to short Bitcoin benefited on the way down. It was also lucrative to enter a long position in Bitcoin at the bottom.

Because of its market dominance, first mover advantage, brand strength, and other factors, Bitcoin is frequently regarded as the best and safest cryptocurrency to invest in. Other cryptocurrencies may outperform or eventually replace Bitcoin, making it impossible to determine which cryptocurrency is the best overall.

Source:-

PrimeXBT

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Tax Strategies

Tax planning methods with reinvesting profits

30 percent of companies are formed only for the purpose of investment. Long-term capital gains are taxed at 15% and, in effect, 10% for superannuation funds. Contributions for high-income earners may be subject to a surcharge. Although the GST may be considered a different tax system, it is outside the scope of this article. High-income investors frequently purchase investments in the name of a Pty Ltd firm so that their income is taxed at a maximum of 30%.

Companies, on the other hand, do not qualify for CGT deductions on capital gains that would otherwise be given to individuals. (Concessions on CGT for small businesses may be granted.)

Companies are separate tax entities that can keep their own income and assets and file their own tax reports.

Retaining and reinvesting profits in a firm is a frequent tax planning method, with dividends paid only when the shareholder’s tax bracket is less than 30% (Franking Credits usage).

Companies can be utilised to defer personal income tax by acting as a “parking” vehicle. Trusts, unlike people, companies, and superannuation funds, are not tax-paying entities. A trust is defined as a “fiduciary responsibility” between the trustee and the beneficiaries. Investments can be established in a trust’s name, but all income and capital gains must be given to beneficiaries every year or the trustee will lose control of the trust.

A “fixed” trust is one in which all beneficiaries have a definite right to the trust’s income, capital gains, and capital.

“Discretionary” trusts allow the trustee a lot of leeway in deciding how to pay distributions and can help you save money on taxes.

Income streams are taxed at marginal rates, minus a 15% tax offset for superannuation pensions. Once the fund starts paying an income stream, the earnings within the fund are tax-free (Pension Phase).

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.