A long and fulfilling life or not?
Sometimes, trying to meander through the maze of “Life” can be challenging. The move to retirement is easier for some than others.
That’s where RMFP (Rancie McLean Financial Planning) can be of assistance. We can help by taking what may seem like complex issues, which may be difficult to understand, and explain it in such a manner that allows you to see the path that is available to you to achieve the goals and aspirations you have.
At RMFP we promise to:
- Identify with your “Desired Lifestyle Goals” in the short, medium and long term and help you clearly see what those look like
- Help you understand the financial resources you will require to achieve your lifestyle objectives
- Evaluate your circumstances in terms of your current Budget & Cash flow situation, Debt position, Estate Planning needs, Wealth Protection needs and Wealth Creation / Superannuation Strategies
- Provide tailored advice for your needs
- Conduct annual “Health Checks” of your Wealth Creation Strategy to ensure that you are “on track” to achieve your Lifestyle Goals
We believe that clients should be well informed about the financial landscape surrounding them and the importance of diversified investment strategies across asset classes. We also believe in long-term strategies to help you achieve your long-term objectives and understand the discipline required to accumulate wealth and achieve your goals.
We would be very happy to discuss, in greater detail, how we might be of assistance to you, and to make this easier for you – We would like to offer you an OBLIGATION FREE first meeting with us at NO COST.
Should you wish to take this opportunity to discuss your current lifestyle goals and objectives please contact Jon or Andrew using the contact details below.
Contact Details:
Phone: 03 9671 4990
Email: jon@ranciemclean.com.au
Web: www.ranciemclean.com.au
Smart Investing
Fixed interest a safe haven in stormy times
September 24, 2007
Robin Bowerman
(The information in this article has been taken from www.compareshares.com.au)
The market shakeout in recent weeks affects people in different ways.
For some it has been a buying opportunity – with money streaming into super because of the June 30 deadline many investors and advisers were happy to get money in through the super door before it shut and parked it in cash.
The market drops clearly prompted some people to allocate the money into growth investments. But for others the sudden dips and rebounds cause severe indigestion.
One investor recently spoke of his frustration. After several years of heavy salary sacrificing – he was a dogmatic super sceptic until his mid-50s – he had just got his super to the point where he was comfortable with his financial planner’s projections for how long he could fund his lifestyle in retirement.
But his concern was that the portfolio was market-linked – and he knew only too well that that means it can go up and down. So what he was looking for as he got older was a little more certainty – something more guaranteed.
Now you can buy guaranteed income stream annuities. But they are not popular for a couple of good reasons – the returns are not that attractive because these are expensive products for a life company to provide a guarantee for but most importantly these products involve handing over a lot of capital – with a subsequent loss of control.
That is a real show stopper for most people.
Now financial planners tend to divide into two camps on this issue. One group will wind back exposure to growth assets fairly dramatically – capital preservation being the dominant aim. Others argue that when you retire you still have an expectation of 20-30 years to live so you have plenty of time to stay invested in growth markets and let the economic cycles run their course. That is terrific but one thing changes when you retire – the ability to replenish the savings from earnings if investments go bad. So the aversion to loss of capital logically increases at the time of retirement.
This is where asset allocation is a powerful risk management tool. Fixed interest returns in recent years have been low but the volatility of recent weeks underlines the importance of fixed interest investments in a portfolio. Investing in high grade corporate or government bonds can lower a portfolio’s overall volatility – and therefore the risk of nasty negative return surprises. It does not provide a capital guarantee because bond valuations fluctuate based on the yield or coupon rate and the term the bond has to run.
To illustrate the point look at the returns (after fees) in July for Vanguard’s Australian share fund – it was down 2.1% for the month in line with the sharemarket in a volatile month. Compare that to the diversified bond fund that invests in a blend of government, semi-government and semi-corporate bonds both in Australia and internationally. In July the fund’s value increased almost 1%.
Another way of looking at the power of fixed interest in portfolio protection is to look at the returns from Vanguard’s range of diversified funds which have varying levels of fixed interest exposure. The growth portfolio with 30% in cash and fixed interest lost 1.6% in July; the balanced fund with 50% in cash and fixed interest lost 1.05% while the conservative fund which has 70% in cash and fixed interest saw the portfolio dipped a modest 0.45%.
The message from these fund allocations is that as the amount of fixed interest increases in the portfolio the volatility – at demonstrated in July this year – dropped. One month is a very short window and the trade-off is the longer-term return. Past performance is not necessarily and indicator of future performance but over 5 years the diversified bond fund has delivered 5.6% a year; the growth portfolio in the same time has returned 11.5% a year.
There is no escaping the trade-off between risk and return but fixed interest has a real role to play as a defensive asset and as investors in some hedge funds have found out recently the thing you need to be really confident of is that when markets are bouncing around your safe haven assets are just that.
Analyst report - shares
Wine still a little sour
July 21, 2007
Brendon Lau, ShareAnalysis
Recent positive news on the wine industry has led to improved investor sentiment towards wine stocks. The oversupply of grapes is showing signs of coming back into balance, and forecasts of price and export volume increases to some markets is fuelling a buzz in the industry.
While the factors depressing the wine market may be weakening, we think there are many reasons for investors to stay sober as any turnaround for the industry could be at least 12 months away. Considering the better opportunities in the market, we think your investment dollars are better spent elsewhere, at least for the short to medium term.
Foster's Group (FGL)
has received notification from the Australian Commissioner of Taxation that it will receive assessments for total primary tax of $548.7M and penalties and interest of $302M. FGL intends to object to the assessments. This development is another negative for FGL after it failed to realise the forecasted synergies from its multi-beverage strategy. We have a SELL on FGL.
Lion Nathan (LNN) and McGuigan Simeon Wines (MGW)
both are rated a SELL. LNN has outperformed FGL and MGW, thanks mainly to a better than expected 1H07 result. LNN has a wine and spirits business, but makes most of its profits from beer. Although the outlook for beer is brighter than wine's, the stock is overpriced on a PE basis, especially since LNN has not upgraded its profit guidance for the year. MGW announced an earnings downgrade, giving guidance of an FY07 loss of between $4M and $6M. The company said its wine crush is 33% down on last year due to bad weather. We have adjusted our FY07 forecasts to reflect the company’s guidance, which has resulted in a decrease in EPS for FY07 from 5.4 cents per share (cps) to -2.8cps.
Coca-Cola Amatil (CCL)
is planning on expanding into the liquor market, as it attempts to sell its underperforming Korean business. CCL announced an upgrade to its 1H07 earnings outlook, expecting to deliver approximately 12% EBIT growth. We have upgraded our medium- to longer-term forecasts for CCL, but the stock remains overvalued and we maintain our SELL recommendation on the company.
Woolworths (WOW) and Metcash (MTS)
have market power over alcoholic beverage companies. Both companies have also gained market share at the expense to Coles Group (CGJ). However, WOW has suffered a setback recently in its attempt to take over the Warehouse Group after the NZCC declined its application on competition grounds. WOW is appealing the decision through the NZ high court. MTS’s good FY07 result was largely in line with our expectations. Due to a challenging operating environment over the medium term, we have downgraded our FY08 and FY09 EPS numbers, down 6.1% and 4.3%, respectively. We believe that both WOW and MTS are fairly priced at these levels and have a HOLD call on the stocks.
Brendon Lau is the Editor of ShareAnalysis, a premium retail investment service offered by Aegis Equities Research. For more information on these stocks and for a free trial of its web-based investor research services, please go to the ShareAnalysis.com website.
News
Stocks guru warns of US recession
23/09/2007 12:45pm
(The information in this article has been taken from www.compareshares.com.au)
Renowned Swiss investor Marc Faber has forecast the bull market may be coming to an end and the US economy is facing recession.
Dr Faber told the ABC's Inside Business he believed the household sector will continue to sell equities given the current high prices.
At the same time there will be less corporate buying of equities because access to the credit market had diminished.
"So I don't believe that from this level onwards, stocks will be in an extended bull market," Dr Faber said.
Dr Faber qualified his prediction that if the US simply prints more money the run will continue.
"Then of course US assets will go up in price and retail sales will increase and so forth,' he said.
"But I also wonder where the (US) dollar will be compared to other currencies and compared to gold."
Dr Faber noted the benchmark indices, the Dow Jones Industrial Average and The Standard & Poor's 500, were at all time highs but measured against the gold price they had gone down by more than 50 per cent.
"So my view is if you believe in the reflating seam, the reflation by the Fed, then (you would) rather be in precious metals and foreign currencies than US dollars, in US bonds and US equities."
Dr Faber said a recent trip to Zimbabwe had reinforced his opinion about the issues associated with "money printing" as a solution to economic problems.
"You'd rather be in precious metals than paper because paper can be multiplied," he said.
"You can create as much paper money as you like as Mr Mugabe has shown in Zimbabwe."
Dr Faber also linked his concerns to the high level of household debt in the US to his concern that the American economy was headed for recession.
The Swiss finance guru said the whole US economy - where household debt is now almost 100 per cent of GDP - was "geared toward consumption".
"And that is the wrong approach in the first place. It means in my opinion the economy will go into recession if they cannot make asset prices go up.
"So the Fed actually has not much options other than to print money."
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