Financial PlannersInvestment Planning Handling a Volatile Investment Market

Tips for Handling a Volatile Investment Market

Financial advisors, in Perth and across the world, are expected to make sense of what can sometimes be a volatile market for investors. At Approved Financial Planners, we have been a trusted name in the Perth market since 2005. We are now backed by parent company AMP Capital, giving us even more resources and information to help investors weather “storms” or volatile periods in the markets.

One of those resources is Dr Shane Oliver, who is the Chief Economist and the Head of Investment Strategy and Economics at AMP Capital. Recently, on the AMP Capital blog, Dr Oliver provided tips for investors during times of volatility. We would like to share them with you.

Expect Volatility

According to Dr Oliver, one should expect the market for shares to be volatile. He sees it as “the price you pay” for the eventual long term gains that shares typically produce. For example, Dr Oliver sees recent global volatility as “just a correction” that won’t affect long term returns.*

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Investment PlanningNews Three Straight Years of Good Returns for Diversified Investors

Three Straight Years of Good Returns for Diversified Investors: How Long Will it Last?

The investment planning industry has had three great years. In Perth and across Australia, the past financial year produced a third consecutive year of “solid returns for investors,” according to AMP Capital Chief Economist, Dr Shane Oliver. Dr Oliver projects returns to “slow” in the coming year, but still provide “reasonable” returns. *

He attributes this to steady share evaluations and an economy growing fast enough to be healthy but slow enough to stem inflation. Here’s why.*

The Overall Outlook

Diversified investors who “moved beyond cash” saw solid returns. The average of superannuation fund performance was 9.9%, marking three consecutive financial years of growth at 9.9% or over. *

International equities ($A) provided a 25% return on investment (ROI). Australian listed property provided 20% ROI; global listed property returned 10%; international equities (Local) returned 9% and direct property returned 8%. Australian equities, Australian bonds and global bonds all returned 6%. Cash investments had the lowest ROI at 2.6%.*

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Investment PlanningNews Pitfalls of Property Investment

Do You Think Property Investment is a “Sure Thing”? Think Again.

Perth financial planners field a lot of questions about property investment on a daily basis. The concept sounds simple: purchase an investment property in a hot Perth suburb, rent it out and wait for capital gains to outperform all other forms of investment. But does it really work that way?

The Pitfalls of Property Investment

We have helped plenty of investors with well-managed investment property portfolios do well. So we aren’t saying that you can’t make plenty of money with investment property. However, there are plenty of pitfalls that can stop property investors before they gain a foothold in the market. Here are a few of them.

Unexpected Expenses

Were you ever a renter? Think back to what happened when something went wrong. Did the air conditioner go out? Did your roof suddenly spring a leak? Did an appliance such as a refrigerator or oven stop working? Do you remember who fixed the roof, replaced the appliance or bought a new air conditioner? It was the property owner.

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Investment PlanningNews Investing In Current Financial Year

The Current Financial Year: 3 Tips for Investing Now

One of our more popular financial services is investment planning. We know people in Perth work hard and expect life to repay them in kind. One of the best ways to ensure that you are able to enjoy the fruits of your labours is to invest your money wisely.

Recently, Dr Shane Oliver, Chief Economist and Head of Investment Strategy at AMP Capital, published a blog piece called, “3 tips for investing in the new financial year.” The piece consisted of a short video with three investment tips for the current economy. We would like to tell you about them.*

Turn Down the Noise

Dr Oliver expects plenty of volatility in the coming financial year. However, he also sees the “noise” surrounding volatility as a distraction that can “knock you off your strategy.” In other words, Dr Oliver warns that the “noise” of short term losses can cause an investor to abandon an asset due to short term losses instead of waiting for the asset to rebound in the long term.*

Diversify Your Portfolio

Dr Oliver warns against becoming too “confident in one particular asset” because it can make you too dependent upon the performance of that asset. He prefers a diversified approach that offers protection in case one asset performs poorly.*

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Investment PlanningNews Spot an Investment

Can You Spot an Investment Before it Becomes a Trend?

If you happened upon this page, you are probably interested in investment planning and live somewhere in the Perth area. At Approved Financial Planners, we provide a full range of services such as financial planning and mortgage broking to our Perth area neighbours.

We are often asked what the “new trends” are regarding investing. While many investors like to jump on the newest trends, those who prosper the best are usually those who can spot investments before they become trends. If an investment is a trend, it often means that too many people have already “jumped in.”

Our parent company, AMP Capital, has identified what they believe will be an investment trend and a new asset class soon: global listed infrastructure.*

The Global Listed Infrastructure Team of AMP Capital is led by Tim Humphreys. Mr Humphreys holds a Bachelor of Engineering Degree with Honours from the University of Sheffield. He applies his knowledge of engineering to the financial field and is known as a skilled infrastructure analyst.*

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Investment PlanningNews Investing in Infrastructure

Investing in Infrastructure: Key Drivers

The financial advisors in our Perth office are often asked for recommendations on what companies are the best or most reliable investments. Since everyone’s financial situation is different, we can’t really give any specific advice on this blog or over the phone until we have had an individual consult.

All information on our website is general by law, but we are allowed to provide some insight for you from our parent company, AMP Capital. We would like to tell you about infrastructure investment and why it can sometimes make a lot of sense for those trying to maximise their incomes.

What is Infrastructure Investment?

Infrastructure investment means investing in companies that build, operate or supply what is considered to be infrastructure. This includes distributors of gas, water, electricity and oil. It also includes communications, roads, airports, ports and toll roads. *

Many companies involved in infrastructure have long-term contracts, monopolies and built-in protection against inflation and other market characteristics.*

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Financial PlannersInvestment PlanningNews Creating Passive Income Streams

Tips for Creating Passive Income Streams

Investment planning can be confusing and scary. It is one of the services we offer in our Perth office. When investment planning is done right, your money can make money for you. We cannot offer specific information over a blog; you will have to contact our office in Perth for a consult if you would like specific advice. However, we can provide some general tips to get you pointed in the right direction.

Do You Have Goals Yet?

Our parent company, AMP Financial, has a lot of good information on their website, https://www.amp.com.au/. On their page entitled “Understanding Investments,” they recommend that you formulate short term, medium term and long term goals. Short term is defined as in the next six months to two years. Medium term is the next two to five years. Long term is anything further down the road than five years.

Choosing the Correct Investment Vehicle

On AMP’s webpage called “Choosing the right investment option,” they explain how to decide which forms of investments are right for you. The first factor to take into consideration is your risk tolerance. This is determined by combining your attitude towards risk with the amount of time you have to invest.

Generally, the higher the potential return, the higher the risk. However, that isn’t always the case and our financial planners are experts at finding investments that have above-average risk to reward ratios. Here are some risk-reward factors of popular investments.

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Financial PlannersInvestment PlanningNewsRetirement Planning Clear on Investment Goals

Why It’s Important to be Clear on Investment Goals

Whether you are in the investment planning stage, the retirement planning stage or both, our parent company AMP recently provided information reminding us all how important it is to be clear on investment goals. We provide individual consults in our Perth office. One of the first questions we usually ask is about investment goals. Believe it or not, some of those we are consulting don’t have any investment goals yet.

Why Now?

The cash interest rate is at record lows. While this is a boon for borrowers, it is causing many investors to rethink their strategies. One of the major decisions investors must make now is whether they prefer income sustainability or capital stability. *

Previously, term deposits and other cash investments have been regarded as “safe.” Under normal circumstances, cash investments deliver an adequate, if not large, level of income. In addition, their capital value is stable. *

So, what has changed? When the RBA cash interest rate is low, both loan rates and the income provided by long term cash deposits are also low. Since the RBA cash interest rate is the lowest it has ever been, many cash investments are no longer providing high enough returns to offset inflation. *

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Investment PlanningNews Setting Financial Goals

Have You Set Your Financial Goals Yet?

One of the services we offer is called “investment planning.” When potential clients call our Perth office and ask for an individual consult, one of the first things we ask is “what are your investment goals?” Often, the answer is “I don’t have any investment goals.” This raises what we see as an obvious question: “How can you have an investment plan without investment goals?”

Remember that all information here is general. We cannot provide any individual advice on our blog. If you want advice, you will need to call us and arrange for a free consult. Here are three tips for getting it right.

Getting a Handle on Finances

Whenever we provide an individual consult, it always goes better if you have a handle on your finances. This means knowing how much money you have coming in every month, your assets, how much money going out every month and your debts. People who know this information tend to be more efficient at saving money, which can eventually be used for investments.

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Investment PlanningNews How Investment Planning can Help Your Money Work

How Investment Planning can Help Your Money Work for the Future

At Approved Financial Planners, we have over 40 years of combined experience in providing investment planning in the Perth area. In this era, more people are paying attention to their future. For many people in the Perth area, “saving up for retirement” isn’t good enough anymore. In addition, many are opting to turn their current superannuation funds into self managed superannuation funds.

Understanding Investment Planning

Effective investing makes your money work for you. However, investments carry an inherent risk. Generally, the higher the risk, the higher the reward. When we consult with our clients, we like to make a plan. That plan usually includes your goals, assets, current income, projected income and risk tolerance.

Your Investment Goals

Different investors have different goals. Some just want to pick a retirement date and a level of income that will allow them to live comfortably. Others can be more aggressive, wanting to create cash flow for now and for the future.

The first step is to communicate your goals. These can be short-term goals that you want to attain in the next 6 months to a year, medium-term goals that you want to attain in 2 to 5 years and long-term goals that are more than 5 years in the future.

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