A busy month for investors

June is always a busy month for investors, but this one has plenty of complexities.

By InvestSMART · 9 Jun 2017

By InvestSMART ·
9 Jun 2017 · 3 min read

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June is always a busy month for investors, but this one has plenty of complexity. As well as all the usual tax planning, for those who run a business turning over less than $10 million, the instant asset write-off of up to $20,000 per item is still available to you.

Superannuation, in particular for someone like me in a transition to retirement pension, also requires a fair bit of work given all the new complex rules coming into effect. For many, the reduction of annual tax-deductible contributions to super from $35,000 to $25,000 on July 1 may also impact on your future wealth creation plans.

We also have a complex investment environment. Growth in our economy is ok, but not exciting. Jobs growth and unemployment are pretty good, but wages growth is low, leaving consumers who hold a lot of debt feeling the pinch. The property boom, mainly in the big East Coast cities, is clearly slowing. If this continues, the Reserve Bank will breathe a sigh of relief and cut interest rates.

If this happens, many will be happy. But what about we investors who like a bit of income? If rates are cut, and there is no certainty of this, then your already sick-looking term deposits and cash in the bank will look even sicker.

As I look forward, the search for investments that will grow in value, and deliver income returns that also grow, is a challenge. Despite very expensive property in our big cities, by any measure you care to use, Australia's strong population growth still makes the long-term prospects for property values and rental returns look reasonable.

Where good-quality shares and property have a fair bit in common is as investments that provide a growing income stream. The biggest change of all in our society is longer life, which has increased by an extraordinary 25 years in just the last 100 years. So, the days of reaching 60 or so and keeping money in the bank to provide income to live are long gone. Despite the drastic ups and downs in capital values, we'll all need to be using investments such as shares and property to generate the income we need.

Here is where we can help. At InvestSMART, we are committed to providing information to help you make better investment decisions, and the tools you need to manage, monitor and implement your investments.

We also have a range of transparent and low-cost investment options that can help you to create wealth and generate a growing income stream.

Take a look at the range of InvestSMART investment options available to you. The world is complex enough, so at least we can make investing a fair bit easier for you!

Regards,

Paul Clitheroe

Chairman, InvestSMART

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Frequently Asked Questions about this Article…

Why is June a busy month for investors?

June is a busy month for investors due to tax planning activities and the availability of the instant asset write-off for businesses with a turnover of less than $10 million. Additionally, changes in superannuation rules require attention, especially for those transitioning to retirement.

How do the new superannuation rules affect my investment strategy?

The new superannuation rules, including the reduction of annual tax-deductible contributions from $35,000 to $25,000, may impact your future wealth creation plans. It's important to review your strategy to ensure it aligns with these changes.

What is the current state of the Australian economy and how does it affect investments?

The Australian economy is experiencing moderate growth with good job growth and low unemployment, but low wages growth. This environment, coupled with a slowing property boom, presents challenges for finding investments that grow in value and provide income.

How might potential interest rate cuts impact my investment income?

If interest rates are cut, term deposits and cash in the bank may offer even lower returns. Investors seeking income may need to explore other options like shares and property to generate the necessary income.

What are the long-term prospects for property investments in Australia?

Despite high property prices in big cities, Australia's strong population growth suggests reasonable long-term prospects for property values and rental returns, making property a viable investment for income generation.

Why is it important to consider shares and property for income generation?

With longer life expectancies, relying solely on bank savings for income is less viable. Shares and property can provide a growing income stream, which is essential for sustaining income over a longer retirement period.

How can InvestSMART help me with my investment decisions?

InvestSMART offers information, tools, and a range of transparent and low-cost investment options to help you make better investment decisions and manage your investments effectively.

What investment options does InvestSMART offer to create wealth and generate income?

InvestSMART provides a variety of investment options designed to create wealth and generate a growing income stream, making investing easier and more accessible for everyday investors.