http://www.josman.com.au/ Tue, 07 Feb 2012 01:00:50 Josman Financial Group Articles http://www.josman.com.au/?process=views/article.php&articleId=10835 http://www.josman.com.au/?process=views/article.php&articleId=10835 The Markets - are we on the right track? Over the last month we have seen some significant volatility across our investment markets, the Australian Market has dropped approx. 9% since the middle of July, but we are seeing solid daily gains and more stability in Australia than we are in the US and Europe. Comments by AMP Economist Dr Shane Oliver suggests the risk of recession in the US and Europe is high and Australia is not immune,... http://www.josman.com.au/?process=views/article.php&articleId=10672 http://www.josman.com.au/?process=views/article.php&articleId=10672 Greetings, Whilst there has some fluctuations in the markets over the past few weeks, the general feeling of “nervousness” is easing. Below is the Australian Market over the past 2 years and we can see the start of the recovery in late 2009, the we had what is generally being called GFC 2 around May 2010 and then what we are experiencing now (or since April 2011) is GFC 3. As we head into the end of... http://www.josman.com.au/?process=views/article.php&articleId=10922 http://www.josman.com.au/?process=views/article.php&articleId=10922 Personal income tax cuts The Government announced that they were not making any changes to the current personal income tax rates other than to add the previously announced flood levy for one year commencing 1 July 2011. This flood levy will apply to taxpayers with a taxable income of $50,000 and above.         Taxable income ... http://www.josman.com.au/?process=views/article.php&articleId=9428 http://www.josman.com.au/?process=views/article.php&articleId=9428 The first and sometimes only retirement income plan that comes to mind for the average investor is interest only. Interest only is just what it sounds like: you are invested in interest-bearing investments and whatever interest you earn is the money you spend. This is a simple strategy, but it isn't as easy to implement as you might imagine. The simplicity of the strategy is one of its appeals. Who hasn't thought of retirement that way?... http://www.josman.com.au/?process=views/article.php&articleId=9439 http://www.josman.com.au/?process=views/article.php&articleId=9439 Having a good understanding of an investor's risk tolerance is crucial to any successful advisor/client relationship. It is also a key component of any good investment policy statement. Investment advisors usually explore things like age, size of investment portfolio, expected retirement date and future earnings and financial obligations to gauge an investor's risk tolerance. These quantifiable aspects can tell us a lot about an investor's... http://www.josman.com.au/?process=views/article.php&articleId=9438 http://www.josman.com.au/?process=views/article.php&articleId=9438 Business confidence has lifted to the highest level in almost six years, helped by federal government measures to support the economy, stock market rallies and encouraging signs from abroad, a report shows. The National Australia Bank (NAB) monthly business survey's measure of business confidence increased eight index points in August to plus 18 points. It was the highest level since October 2003 and "well above long-run average... http://www.josman.com.au/?process=views/article.php&articleId=9440 http://www.josman.com.au/?process=views/article.php&articleId=9440 Our superannuation system has weathered the toughest stress test it has ever faced and has emerged from the global financial crisis with world-leading growth numbers. This week an annual survey of the world's top 300 pension funds showed the relative strength of our superannuation system on a global basis. Eleven Australian super funds made it on to the list of the top 300 pension funds ranked by assets in US dollar terms that is compiled... http://www.josman.com.au/?process=views/article.php&articleId=9441 http://www.josman.com.au/?process=views/article.php&articleId=9441 Our monthly updates have changed to two PDFs that contain far more information than we'd supplied in the past. We've made this enhancement due in part to give more detail on the markets and the economy but also to provide you with more help in understanding these tough times. Click here for a Market Report - 31st August 2009 Click here for an Economic Report - 31st August 2009. http://www.josman.com.au/?process=views/article.php&articleId=9445 http://www.josman.com.au/?process=views/article.php&articleId=9445 On 1st July 2009, some superannuation pensions will reduce if based on the asset value. The reduction in superannuation balances can be partly offset by pensioners applying for increased Age Pension payments. Some part-pensioners may be entitled to an increase in their Centrelink payments, because of changes to their drawdown level - therefore, they should inform Centrelink within 14 days. They will need to provide Centrelink with an... http://www.josman.com.au/?process=views/article.php&articleId=9443 http://www.josman.com.au/?process=views/article.php&articleId=9443 Consider the 63-year-old Melbourne tram driver who earns about $55,000 a year yet last year managed to make salary-sacrificed contributions totalling $35,000. Not a bad effort! The making of such large contributions despite the size of his income was no doubt made achievable through the combination of much discipline and his use of a transition-to-retirement pension. And he probably has much more discretionary income than in the past. In a... http://www.josman.com.au/?process=views/article.php&articleId=9442 http://www.josman.com.au/?process=views/article.php&articleId=9442 The tax office's blueprint for its priorities in the 11 months ahead - officially known as its compliance program 2009-10 - contains a rather remarkable revelation regarding self-managed super funds. The owner-operators of Australia's so-called micro enterprises, which have an annual turnover of under $2 million, are trustees of 397,700 SMSFs! Just think for a second about that number of funds in what the ATO calls "the micro... http://www.josman.com.au/?process=views/article.php&articleId=9447 http://www.josman.com.au/?process=views/article.php&articleId=9447 Australia's top 200 companies face a total annual cost of up to $2.8 billion under the federal government's still to be finalised Carbon Pollution Reduction Scheme (CPRS), a research and advisory firm says. RepuTex has analysed the carbon footprint of all firms that make up the benchmark S&P/ASX200 stock exchange index to determine which ones are directly liable under the CPRS, and exposed to indirect supply chain and electricity... http://www.josman.com.au/?process=views/article.php&articleId=9446 http://www.josman.com.au/?process=views/article.php&articleId=9446 The urge to retire is not nearly as strong as it once was for thousands of Australians - a trend that must have been given a mighty push by the impact of the global financial crisis on retirement savings. Since Smart Investing looked at the issue of rethinking the age of retirement earlier this month, the ABS has released its latest labour-participation rates for different age groups. A close examination of these statistics confirms the... http://www.josman.com.au/?process=views/article.php&articleId=9448 http://www.josman.com.au/?process=views/article.php&articleId=9448 This is an extract from Max Newnham's book "Self Managed Super Funds - A Survival Guide". One of the fundamental changes made to superannuation under the new system was to cut down the many components of superannuation down to two. Those being taxable concessional benefits and tax exempt non-concessional benefits. This recontribution strategy aims to increase the non-concessional percentage benefits to provide a tax... http://www.josman.com.au/?process=views/article.php&articleId=9451 http://www.josman.com.au/?process=views/article.php&articleId=9451 Many changes proposed in the recent Federal Budget and at other times will commence on 1st July 2009. Some of the more important are:- Adjusted taxable income - new concept Education Tax Refund (ETR) Employee Share Scheme - changes on hold whilst "unreasonable" changes are reviewed Entrepreneurs Tax Offset Family Tax Benefit (FTB) - changes to delivery of HELP repayment thresholds ... http://www.josman.com.au/?process=views/article.php&articleId=9449 http://www.josman.com.au/?process=views/article.php&articleId=9449 The Australian Taxation Office - as regulator of Australia's 407,000 self-managed super funds - has sent a stinging message to fund trustees: get your fund in order or possibly face one of the toughest actions that it can apply. The ATO has a rarely-used power to declare that a SMSF is non-compliant. In short, the tax cost to such a fund is staggeringly high. As the tax office succinctly explains: "Once a fund is found to be... http://www.josman.com.au/?process=views/article.php&articleId=9452 http://www.josman.com.au/?process=views/article.php&articleId=9452 Investments Market Data - 30th June 2009 . Economic Indicators. Economic Growth Quarter Year Australian GDP 0.4%... http://www.josman.com.au/?process=views/article.php&articleId=9453 http://www.josman.com.au/?process=views/article.php&articleId=9453 This is an abridged extract of one of 11 superannuation strategies in the new book by Max Newnham "Self Managed Super Funds: A Survival Guide" published by Wright Books There are not many silver linings to the current collapse in the investment markets. There is one thing the super fund members can do where their fund has tax free benefits, the... http://www.josman.com.au/?process=views/article.php&articleId=9455 http://www.josman.com.au/?process=views/article.php&articleId=9455 We are low income earners (paying only 15%) but have our own SMSF. How can we lessen the tax burden on our SMSF to enable us to build wealth and retire eventually? It seems that all the tax strategies only allow for high income earners. From what I have read starting transition to Retirement Pension would be no benefit as we are taxed 15% both in and out of Super. Regards Narelle. Response: There is no doubt that the more you earn, the more... http://www.josman.com.au/?process=views/article.php&articleId=9454 http://www.josman.com.au/?process=views/article.php&articleId=9454 Are you in your late forties or early fifties and beginning to experience financial freedom for the first time in many years? Perhaps your once-hefty mortgage has just been paid off and maybe your children have recently become financially independent? If your answer is "yes" to these questions, you may well rank among the many Australians who decide at this point in their lives to boost their relatively meager... http://www.josman.com.au/?process=views/article.php&articleId=9458 http://www.josman.com.au/?process=views/article.php&articleId=9458 Like many things in the world, the stock market relies on the power of supply and demand. The stronger the demand for a share in a company, the higher its price will be. Alternatively if less people are interested in buying a share of a particular company, its price will drop. Before the market opens each day, orders are placed in a queue; determining the attractiveness of a particular stock. A company which may have performed well... http://www.josman.com.au/?process=views/article.php&articleId=9460 http://www.josman.com.au/?process=views/article.php&articleId=9460 Allocated Pension An allocated pension is a product purchased by retirees to convert their super savings into a regular income. Retirees use allocated pensions to pay themselves an income over a time period roughly equivalent to their life expectancy. Pension payments can be made monthly, quarterly, half yearly and yearly and are deposited directly into a retiree's bank account. Transition to Retirement Pension A transition to retirement... http://www.josman.com.au/?process=views/article.php&articleId=9457 http://www.josman.com.au/?process=views/article.php&articleId=9457 Do you make salary-sacrificed super contributions? If the answer is a resounding "NO", you are far from being alone. It seems that a large majority of fund members can't afford to make salary-sacrificed super contributions or just aren't interested. And of members who do make salary-sacrificed contributions, relatively few contribute large amounts. That's the reality of salary-sacrificed super - despite all of the... http://www.josman.com.au/?process=views/article.php&articleId=9459 http://www.josman.com.au/?process=views/article.php&articleId=9459 Retirement and the age 65 go together like hand and glove. It is the one number most Australians could quote with certainty about our superannuation and pension system. The age 65 has been enshrined in the way we define and plan our working lives. So changing it - albeit slowly and over six years - is a big deal. The 2009-10 Federal Budget has been developed against a backdrop of the worst economic downturn in 70 years. The collapse in... http://www.josman.com.au/?process=views/article.php&articleId=9462 http://www.josman.com.au/?process=views/article.php&articleId=9462 Please click on the following link to access this information. 2009 - 10 Federal Budget http://www.josman.com.au/?process=views/article.php&articleId=9461 http://www.josman.com.au/?process=views/article.php&articleId=9461 Warren Buffett is a role model for share investors around the world. This week the annual general meeting in Omaha of Berkshire Hathaway - Woodstock for capitalists as it has been dubbed - reportedly was a little more subdued than normal. Hardly surprising given that Buffett's genius did not mean the company's value escaped unscathed from the global financial crisis. But as always there was something average investors (and advisers) can... http://www.josman.com.au/?process=views/article.php&articleId=9463 http://www.josman.com.au/?process=views/article.php&articleId=9463 Some birthdays are more influential on our investment outlook than others. A friend turned 50 recently and along with an enjoyable celebration of a life's journey so far she admitted notching up a half century had powerfully turned the mind to issues around superannuation and retirement. No-one can control - or even accurately predict - market performance. But there is another critical factor that is largely beyond our control - our time... http://www.josman.com.au/?process=views/article.php&articleId=9466 http://www.josman.com.au/?process=views/article.php&articleId=9466 Fortunately, Australia has not been exposed to the worst extremities of the world financial crisis that are being experienced through much of the world. Certainly, personal bankruptcies and corporate failures are expected to markedly rise here. And our retirees and those approaching retirement are particularly feeling the losses in their superannuation savings. And indeed, the Insolvency and Trustee Service of Australia has just reported... http://www.josman.com.au/?process=views/article.php&articleId=9465 http://www.josman.com.au/?process=views/article.php&articleId=9465 A dividend reinvestment plan offers shareholders the opportunity to repurchase new fully paid ordinary shares in a company, rather than take their dividend payment as cash. One of the main benefits is that additional shares purchased through the plan are generally offered at a discount to the market price. This discount normally works out between two to five percent but can be as much as ten percent. Another advantage is that... http://www.josman.com.au/?process=views/article.php&articleId=9467 http://www.josman.com.au/?process=views/article.php&articleId=9467 On 3rd February 2009 as part of its economic stimulus package, the Federal Government announced the following bonuses for eligible individuals:- Working Australian Tax Bonus ($300 - $900 per individual); Single Income Family Bonus ($900 per family); Back to School Bonus ($950 per child); Training and Learning Bonus ($950 per individual); and Farmer's Hardship Bonus ($950 per household) These bonuses will not be... http://www.josman.com.au/?process=views/article.php&articleId=9464 http://www.josman.com.au/?process=views/article.php&articleId=9464 Investors around the globe have seen their retirement savings shrink significantly courtesy of the global financial crisis. But the group of investors who perhaps have more right than any other to curse their luck are those people who have retired in the past 12 months. Now retirees who planned their super contributions and retirement with the help of a financial adviser ought to have been well aware that investment markets will - from time... http://www.josman.com.au/?process=views/article.php&articleId=9469 http://www.josman.com.au/?process=views/article.php&articleId=9469 Q: I have a SMSF and turn 65 shortly. At aged 65 can I live off saved income and let my super accumulate for another 12 months before converting it to an allocated pension. Thanks, Dave. A: The rules applying to Self Managed Super Funds (SMSF) are no different to those affecting all superannuation when it comes to "conditions of release". Basically, a condition of release means you can access the money in your super to do... http://www.josman.com.au/?process=views/article.php&articleId=9430 http://www.josman.com.au/?process=views/article.php&articleId=9430 After the market has fallen so heavily, many investors would understandably feel they must take decisive action to protect their portfolios from further damage. But such responses often cause more damage than good. Depending upon their personal circumstances, of course, most investors shouldn't feel obliged to do much at all right now. Jason Zweig takes up this theme in The Wall Street Journal this week, writing that any investor who has... http://www.josman.com.au/?process=views/article.php&articleId=9474 http://www.josman.com.au/?process=views/article.php&articleId=9474 Why do companies care when their share price falls? How is a company affected by a falling share price? From a transparent point of view it can be confusing to wonder why companies care when their share price falls. After all, listed companies have already received money from investors, when they first sell shares through an Initial Public Offering (IPO). What happens in the secondary market, when investors buy and sell to each other on the... http://www.josman.com.au/?process=views/article.php&articleId=9475 http://www.josman.com.au/?process=views/article.php&articleId=9475 The Government has announced that investors in account based pensions, allocated pensions and term allocated pensions (TAP's) will only be required to draw down half of their calculated minimum income requirement for 2008/09. In practice, this means that pension investors who have already received 50% or more of their minimum payment amount for 2008/09 will not be required to receive any further payments for the remainder of this financial... http://www.josman.com.au/?process=views/article.php&articleId=9470 http://www.josman.com.au/?process=views/article.php&articleId=9470 If there is one lesson from the global financial crisis, surely it is that too much borrowing is explosive and destructive when underlying asset values fall. Banks and other major financial institutions around the world are frantically "deleveraging" their balance sheets. In other words, they are reducing borrowings and restoring capital ratios to more normal levels. The jump in household savings rate in Australia late... http://www.josman.com.au/?process=views/article.php&articleId=9473 http://www.josman.com.au/?process=views/article.php&articleId=9473 Any individual presenting a case for superannuation at this time may seem bold and outspoken in the midst of falling returns. Take veteran tax and superannuation lawyer Robert Richards who has just described superannuation as the "easiest, safest and most tax-effective of all tax planning". In the February issue of the Law Society Journal of NSW, Richards has written: "The strategy is simple; one contributes as... http://www.josman.com.au/?process=views/article.php&articleId=9476 http://www.josman.com.au/?process=views/article.php&articleId=9476 The Reserve Bank's cutting of official interest rates last week to a 45-year low is certainly great news for everyone having to meet repayments on a hefty mortgage. Making a few assumptions, Commsec's chief economist Craig James has done a little number crunching: "The unprecedented rate cuts over the past five months translate to a massive pay rise for the home-buying public. Since September, interest rate repayments on a $300,000... http://www.josman.com.au/?process=views/article.php&articleId=9480 http://www.josman.com.au/?process=views/article.php&articleId=9480 As yet another repercussion of the global credit crisis, the rules regarding financial advice have changed. Australian Securities & Investments Commission has granted superannuation funds temporary relief (if they apply) to help members. Until now a superannuation fund is not permitted to give any advice, but it can always provide information. Now it can provide ‘guidance' as long as that is not advice. The guidance is... http://www.josman.com.au/?process=views/article.php&articleId=9479 http://www.josman.com.au/?process=views/article.php&articleId=9479 A generation of investors began the New Year wiser but poorer courtesy of the global financial crisis of 2008. The lessons of last year are likely to reverberate for many years to come. So it is worthwhile to capture the key lessons - while painfully fresh - as a useful reminder for portfolio reviews in the years ahead. Lesson 1: Risk is not to be under rated. In the good times we cannot be complacent about risk. It may have taken market... http://www.josman.com.au/?process=views/article.php&articleId=9481 http://www.josman.com.au/?process=views/article.php&articleId=9481 The willingness of some people to continue to try to take advantage of poorly informed investors and super fund members is breathtaking. It seems that even the severity of the bear market doesn't deter them. A few months ago, I wrote about approaches to shareholders with offers to buy their shares at prices much below market value. This was despite the fact that their prices had already sharply fallen! Perhaps it isn't surprising that... http://www.josman.com.au/?process=views/article.php&articleId=9432 http://www.josman.com.au/?process=views/article.php&articleId=9432 The relationship between the real world and the stockmarket can sometimes seem tenuous. The rout on financial markets is inescapable yet people are still going to work earning money, going to the supermarket or the pub to spend it, buying fridges, TVs and even luxury cars. Spring is in the air and football finals fever is building. In short life goes on. So reconciling what is happening with sharemarkets around the globe and trying to... http://www.josman.com.au/?process=views/article.php&articleId=9433 http://www.josman.com.au/?process=views/article.php&articleId=9433 A cynic was on the right track when he claimed, "The sumptuousness of a company's annual report is in inverse proportion to its profitability that year." Investors contemplating the purchase of shares in a specific listed company can get hold of its latest annual report - either in hard copy by requesting a copy from the company or its share registry, or these days simply by downloading it from the Internet. The latter is... http://www.josman.com.au/?process=views/article.php&articleId=9434 http://www.josman.com.au/?process=views/article.php&articleId=9434 The Governor of the Reserve Bank, Glenn Stevens, is not into market timing. This might seem at odds with his role as the country's most influential banker that requires decisions based on forecasts of future economic activity. But if you look at his speech this week at a financial markets conference in Sydney which gives a great context for the international financial market turmoil of the past six to eight months you also get a sense of... http://www.josman.com.au/?process=views/article.php&articleId=9436 http://www.josman.com.au/?process=views/article.php&articleId=9436 How's your Super going? A recent television advertisement run by a very large Financial Institution was promoting the idea of how fantastic a Superannuation calculator was that they had on their website. Apparently, after a few minutes using this calculator you could get an idea of how your superannuation was going compared to what it could potentially produce for you during retirement. The importance of knowing such information can't be... http://www.josman.com.au/?process=views/article.php&articleId=9437 http://www.josman.com.au/?process=views/article.php&articleId=9437 Salary sacrificing is a strategy that not only boosts your retirement savings but can also lower the amount of income tax you pay. Many employers offer salary sacrifice, a strategy where rather than taking all your salary as income you contribute a portion to super. Salary sacrifice contributions usually attract a tax of just 15 per cent, which is about half the average marginal tax rate. Instead of investing money outside super and paying...