Happy new financial year!

At the stroke of midnight just a few hours ago, we put last year behind us and took our first strides into the future.

Overall, I think FY2019 was a good year, with significant positive momentum since Christmas, and in particular following the federal election result in May. This is borne out by the numbers, with a 10% slump in Q2 followed by 18% growth in the stock market across Q3&4.

It’s been a nervy time for investors over the past 12 months, with a downturn in the property market during the first three quarters of the financial year. Therefore, investors chasing returns have had little choice but to turn to the stock market, which despite the doom and gloom, has in many cases yielded good returns.

BHP is up 34% this year, Rio Tinto up 38%, Fortescue up 132%, CBA up 20%, Telstra up 56%, Transurban up 30%, and property developer Mirvac up 52%.

Despite this, the RBA remains concerned about the lack of wage growth across the country with most people’s income barely keeping up with inflation.

That’s why I predict another rate cut either tomorrow or next month, and I expect the banks will pass on the cut in a similar fashion to last month, though ANZ and Westpac will pass it on in full, while CBA and NAB might not.

But will another rate cut see wages increase? Unlikely, in my view. I believe most employers will retain any gains they make from the rate cut, while maintaining any wage growth at roughly 2% CPI, which in real terms is nowhere near keeping up with the cost of living.

It’s financial New Year’s Day, which means it’s too late to make super contributions for FY2019, however it’s not too late to make sure you’re not about to lose any insurances you have through your super fund. If you haven’t made a super contribution over the past 16 months, a recent legislative change could see you lose your insurances.

This is an attempt by the government to prevent funds sitting in inactive super accounts being eaten up by fees. However, if you wish to retain your insurances, I’d suggest picking up the phone to your fund immediately and confirming you wish to keep your insurance, and potentially making a small super contribution to make sure of it.