The period since the Global Financial Crisis (GFC) has seemed unusual in the sense that periodic crises and post GFC caution prevented the global economy from overheating and excesses building, in turn preventing the return of the conventional economic cycle. Many of course concluded this was permanent and that inflation would never rise again (with talk of structural stagnation, the Amazon effect, etc). However, it’s becoming increasingly clear the global economy is moving out of its post GFC funk – with growth picking up and signs that inflation will too (led by the US) – and arguably returning to a more normal investment cycle. The pullback in shares and surge in volatility seen this month likely indicates an adjustment in investor expectations to reflect this. This note looks at what to watch.
If you can't decide between a fixed or variable rate, a split rate home loan could provide the best of both worlds.
If you’re about to take out a home loan and are looking for some protection against interest rate rises, a fixed rate home loan may sound like the loan for you.
On the other hand, if you don’t want to miss out on the benefits of a potential interest rate cut, and/or you’re looking for additional flexibility, a variable rate home loan could also have its advantages.
Downsizing to a coastal town or regional hub can hold lifestyle appeal, but don't bank on it as a strategy to fund your retirement.
If Australia has an Achille’s heal it’s the high and still rising level of household debt that has gone hand in hand with the surge in house prices relative to incomes. Whereas several comparable countries have seen their household debt to income ratios pull back a bit since the Global Financial Crisis (GFC), this has not been the case in Australia. Some worry Australians are unsustainably stretched, and it is only a matter of time before it blows up, bringing the economy down at the same time. Particularly now that global interest rates are starting to rise. This note looks at the main issues.
“High house-hold debt is Australia’s Achilles heel,” says AMP Capital Head of Investment Strategy and Economics and Chief Economist, Shane Oliver. “I’ve been thinking this for many years now and yet it seems to keep going higher.”
Latest data from the Australian Bureau of Statistics puts total household liabilities at $2.466 trillion, or 199.7 percent of disposable income, putting it among the highest in the world.
“The only thing we have to fear is fear itself,” said Franklin D Roosevelt at his inauguration as US President in 1933.
I think “the only thing we have to fear is the fear index itself” is a better description of where investors are at right now.
It’s been a wild ride on Wall Street and beyond of the past week – the worst in two years for the S&P 500 – with the volatility causing many to ask if the bubble has burst and the equities bull market is over.
How did we find ourselves here?
It’s a question I ask myself whenever I come across an article or when I’m drawn into a discussion comparing index fund returns with the after-tax returns of active fund managers. And I’m asking it a lot lately.
As head of AMP Capital’s Multi Asset Group, the debate is usually misdirected by the time it gets to me, considering the multi-asset management process picks from different styles and strategies – including low-cost index strategies where it makes sense – to come up with a blended approach designed to meet an outcome for investors.
While still relatively small, peer to peer lending, otherwise known as P2P lending or marketplace loans, is a growing part of the global financial landscape.
Still in its relative infancy in Australia, the local market for peer to peer consumer loans has already grown from US$2 million in 2013 to US$158 million in 20161.
We explain what peer to peer lending is, how it works and the benefits and risks for both borrowers and investors.
The pullback in shares seen over the last week or two has seen much coverage and generated much concern. This is understandable given the rapid falls in share markets seen on some days. From their highs to their recent lows, US and Japanese shares have fallen 10%, Eurozone shares have fallen 8%, Chinese shares have fallen 9% and Australian shares have lost 6%. This note looks at the issues for investors and puts the falls into context.
As a nation, Australians aged 18 and over spent approximately $145 billion on lifestyle costs last year, with the average spend per person around $7,800, according to research by comparison site Mozo1.
While clothing and footwear took out the number one spot by a country mile on the top-ten list for lifestyle expenditure, six out of ten categories related to just two things—eating and drinking out.
Volatility, which has been dormant in markets for the past few months, has jolted to life the last few days. The US market has concurrently had its worst and most volatile day since 2015, followed by its best day since 2016 despite nothing really happening (and this bounce is likely to be replicated by the Australian market this morning).