Another (alleged) financial fraudster: how could this happen again?

Posted on Wednesday, February 24, 2021
You have to wonder how this can happen. Or should I say, happen again?   Despite all the royal commissions and compliance requirements that have come about as a result, somehow a financial advisor has managed to (allegedly) defraud her clients of $25 million.   Sydney financial adviser (except she wasn’t a financial adviser, because she wasn’t licensed) Melissa Caddick has been accused of using investors’ money to fund her lavish lifestyle, including luxury goods and jewellery.   The Sydney Morning Herald has reported that from 1 January 2018 until 18 September 2020 a total of $20.279 million was deposited into Caddick’s accounts and she has since withdrawn all but $700,000 of that.   She vanished in November last year when ASIC froze her accounts and seized a million dollars worth of bling.   As a 25-year licensed financial adviser and 21-year Certified Financial Planner, stories like this send a shiver down my spine. So as an investor ... Read the rest of entry »

Lockdown ends, JobKeeper set to end too

Posted on Wednesday, February 17, 2021
Throughout this pandemic there have been very few certainties. Today's announcement that Victoria's snap 5-day lockdown is ending as scheduled is welcome news, but there's no certainty that we're going to stay free into the future. What is certain, however, is that JobKeeper is ending in March. Treasurer Josh Frydenberg made that clear as recently as yesterday. He says a Treasury review has found that the JobKeeper subsidy is having some perverse outcomes that are preventing workers moving freely across the economy, which has resulted in labour shortages in some areas. "This successful and expensive program must end but other policies will fill that place," he said, pointing to initiatives such as the government's tax cuts. So what does that mean for all of us? For a start, I think Mr Frydenberg wants to delete the word JobKeeper from our vocabulary entirely. But what will the real-world impacts be for struggling industries where unemployment remains high or earnings are unl ... Read the rest of entry »

How can global sharemarkets soar when our economy is stuffed?

Posted on Wednesday, February 10, 2021
Millions jobless, the largest quarterly GDP decline since the Great Depression, and countries going further into multi-generational debt, yet global share markets have risen to record highs and show no signs of slowing down.   How is that even possible?   This is the great disconnect between the economy and the stock market.   The S&P 500 fell more than 30% in March 2020, yet over the last few nights has risen to all-time highs – a rebound like no other.   As negative news spreads like the word recession, equity markets decline as investors in some cases panic sell. Typically, over the short term this is an overreaction as savvy investors see opportunities before the rebound. As we know, the pandemic threw countries across the world into lockdown, which curtailed our freedoms and took away the things we normally do on a daily basis, and often take for granted. But how did this make the share market go up? It seems nonsensical.   Amazon, Apple, Microsoft, Google ... Read the rest of entry »

GameStop: the long and the short of it (in 60 seconds)

Posted on Thursday, February 4, 2021
What on earth is going on with GameStop, I hear you ask? Well, here's the long and the short of it. As advisers, in order to meet the best interest of our clients, we manage money in line with goals, objectives and risk. In most cases this involves buying an asset that will increase in value over time. This is the traditional investment model and is known as long investing. However, whilst it is not common in Australian markets, you can also invest in the market or an asset going down in value. The technique of profiting from a price fall is called short-selling, otherwise known as “shorting,” “to go short” or simply “short”. Basically, short-selling is the reverse of how we’re traditionally taught to invest. When shorting, you aim to jump in at a high and out at a low, with the sequence of events also in reverse, since you sell first and buy back afterwards. As confusing as it sounds, this involves selling something th ... Read the rest of entry »

What have we learned already this year? My top 5.

Posted on Thursday, January 28, 2021
As we close out the first month of 2021, what have we learned? Here's my top five: The annual inflation level in Australia was reported today at 0.9%, well under the RBA's 2-3% forecast. This means interest rates will remain low for longer. Global growth is looking more positive. The International Monetary Fund has raised its projections for global growth, and is expecting to see “low levels” of COVID-19 across the world by the end of 2022. GDP is expected to grow 5.5% in 2021, an upgrade from 5.2% in October last year. This means the global economy should stabilise, but it could take til the end of next year. JobKeeper will cease at the end of March, but there's been outcry from certain sectors that their recovery will continue to be hampered by the virus long into the future. This will likely force the government to consider offering targeted grants to certain industries such as travel, the arts and hospitality. Share markets globall ... Read the rest of entry »