Welcome to CA’s Quarterly Newsletter
It seems like a short time ago we were writing last year’s Christmas Newsletter and here we are again. It has been another great year for CA, made extra rewarding by the knowledge that we’ve made a positive difference in the lives of our wonderful clients.
Thank you yet again for your support and loyalty. We wish you all a wonderful festive season and a happy and healthy 2015.
Stay in Your Seats
Although it’s a bit of a heavy topic for the Silly Season we feel that it’s important to address the recent market volatility that we are seeing in both domestic and global sharemarkets. It’s the nature of markets to go up and down – it’s just that at the moment they are doing so like Santa Claus on Christmas Night. We believe that there could be more volatility ahead – but without a crystal ball no one really knows.
Falls in the sharemarket can be unsettling but it’s important to keep in mind that shares are a long-term investment and bumps along the way are an expected part of the journey. We have to accept that with the higher income and growth rewards of shares, comes higher risk – this relationship has been played out in the sharemarket since shares were first traded.
Our belief is that while it can be tempting to bail out, investors should stay in their seat. As your Financial Adviser or coach it is our job to see you through volatile times and help maintain the discipline.
Professor of Finance at Yale School of Management and capital market expert, Professor Roger Ibbotson, has some wise words and says,
“For the most part, the individual should ride through these things, buy and hold. If they do react, usually what’s happening is that their emotions work against them. They’re looking backward. They get scared and they’re driven away from the more rational behaviour, which is to just settle down.”
For further anecdotal evidence on this topic you may like to check out an insightful article by AMP’s Chief Economist Shane Oliver titled ‘The end is nigh, or is it? Try to turn down the noise’. In this article Shane puts the recent market volatility into perspective.
If you can’t find time during the busy festive season to read the full article, here’s Shane’s cheat sheet of what investors should do when the media perpetuates talk of doom and gloom:
- Firstly, recognise that shares and other growth assets have historically climbed a wall of worry and they will most likely continue to do so. Yes there are always lots of worries out there. Sometimes they become real concerns but most of the time they come to nothing. In fact since 1900 Australian shares have risen 8 years out of ten.
- Secondly, turn the volume down on the “news” front, i.e consume less of it. You’d be better watching less of the financial soap opera in favour of episodes of The Brady Bunch or The Partridge Family.
- Thirdly, adopt a long term strategy and stick to it. The environment we are now in has increased the importance of asset allocation – but this is best left to experts and those who can really put the time in to filter the noise from fundamental signals. Most individual investors will end up getting it wrong so the best approach is to agree a long term strategy and stick to it.
- Finally, recognise that the best opportunities in investing often arise when many are engulfed by gloom and doom and the market is cheap.
Our in-house mortgage broking business has grown rapidly over the year and we are so pleased to be able to offer this important service to our clients. Our team of Carole Byrnes and Ken Batten continue to have access to preferential and competitive fixed and variable rates. They would be very happy to meet with you and talk through your personal debt strategy in the New Year. Just give Carole or Ken a call or talk to your Adviser to arrange an appointment.
Whether you are thinking about buying a new home or purchasing an investment property, or would like to have your current loans reviewed, it is worth having our mortgage experts assess your situation and advise on the best solution for you.
While we are on the subject of mortgages, an interesting article has recently been released on off-the-plan properties – Off-the-plan property on the money? We have a lot of clients ask us our view on buying off the plan so you may be interested in reading.
CA’s Newest Team Member & Jenny on Maternity Leave
We are delighted to welcome Zoe Hori to the CA Team as an Account Manager. Zoe is working primarily with Guy Cotter and has a wealth of practical experience in managing client’s financial affairs. You can read Zoe’s bio here.
We also temporarily farewell Jenny who is taking maternity leave to have her second baby. Jenny’s bub is due to arrive in early January and we wish Jenny all the very best as she ventures into the challenging role of full-time motherhood over the coming months! We sincerely thank Jenny for her amazing commitment and the care she shows for all of CA’s valued clients, and look forward to her returning in 2015.
Merry Christmas and Happy New Year!
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