Economic Update and Outlook for Quarter 1 – 2024

Our research partners, Innova Asset Management, have released their Quarter 1 – 2024 Market Commentary report.

As we reflect on the first quarter of 2024, the stock market has been really interesting, driven by new technology and changes in the economy. Two main things stood out during this time: the significant changes brought by new AI technology in tech companies, and how unsure everyone was about interest rates going up or down. Together, these factors greatly impacted how the stock market moved, how investors felt, and the overall view of the economy.

Here’s a quick look into the dynamics that shaped the financial terrain:

– The stock market in 2023 was mainly driven by breakthroughs in AI technology and changing views on interest rates.

– The largest US tech companies, often called the “Magnificent 7,” were a big reason the market did well.

– NVIDIA stood out due to its focus on AI and big projects by companies like Microsoft.

– The US economy stayed strong, thanks to people spending a lot of money, making it less likely for the economy to shrink.

– Global stock markets, especially those focused on technology like the Nasdaq, did really well in 2023.

– After reaching high levels in 2022, inflation (or the cost of living) in rich countries started to decrease, changing what people thought the Federal Reserve would do about interest rates.

– There’s a growing difference in value between the most prominent US companies and other stocks, with indexes like the S&P 500 and Nasdaq showing higher than usual prices.

Watch the full video breakdown below, or read the attached commentary here on the current key issues, a comprehensive review of Quarter 1, and how we are positioning our Innova Active portfolios for clients.

Forced Into Early Retirement? Here are 4 Things To Consider

Are you facing an unexpected early retirement? The uncertainty can be overwhelming, but fear not – you might be better prepared than you think.

Many Australians find themselves retiring earlier than they had in mind. While the average planned retirement age hovers around 65, the reality is closer to 56. Unexpected circumstances like job loss, health issues, or caregiving responsibilities can force us into retirement prematurely.

The ideal retirement varies from person to person, whether globe-trotting, volunteering, or quality time with family. Regardless of the circumstances, careful planning and goal setting can help you achieve your plans or, at the very least, prepare you well if you are unexpectedly forced into retirement.

If early retirement catches you off guard, don’t fret. This post will explore four crucial steps to make the most of an unexpected retirement.

1. Assess Your Current Financial Situation

If retirement knocks on your door earlier than expected, evaluating your financial standing is vital. Begin by checking your superannuation balance to determine the resources available if you retire unexpectedly.

When assessing your situation, consider your assets, debts, and any income you might get from sources like government support. For example:

– How much do you have in your superannuation?

– Do you have any savings you’ve accumulated?

– Do you still need to pay debts like credit cards or mortgages?

– Can you get income from personal investments, such as stocks or property?

Additionally, it’s worth exploring whether you meet the criteria for the Government Age Pension.

Date of birth Preservation age
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
From 1 July 1964 60

2. Calculate Your Living Expenses

Once you’ve grasped your financial assets and income streams, it’s time to calculate your day-to-day expenses. This will give you a clear picture of the annual budget you’ll need during retirement.

These expenses encompass various aspects of retirement life, such as housing costs, utility bills, groceries, entertainment, vacations, insurance, home and vehicle maintenance, and healthcare expenses.

Understanding your financial needs will help gauge whether your superannuation or savings can sustain your desired lifestyle.

3. Know When You Can Access Your Superannuation

Accessing your superannuation typically depends on your preservation age, which is determined by the government and ranges from 55 to 60 based on your birthdate. To access your superannuation, you must fulfil certain criteria:

– You must permanently retire.
– Opt for a transition to retirement while you are still employed.
– Cease employment with an employer after turning 60.
– Reach the age of 65, even if you continue working.

In some exceptional circumstances, you may be eligible for early superannuation access due to financial hardship, compassionate reasons, or permanent disability.

4. Explore Income Options With An Account-Based Pension

If you face early retirement unexpectedly and meet the requirements, exploring your income options is important. One of those options is to receive your superannuation as a lump sum payment, which means you’ll get all your retirement savings at once.

Another option is to transfer your superannuation into a dedicated retirement account, an account-based pension. An account-based pension is a financial product designed specifically for retirees. Here’s how it works:

Regular income payments

When you choose an account-based pension, your retirement savings remain invested, and you receive regular income payments from the invested balance. These payments are typically made on a regular schedule, such as monthly, quarterly, or annually. The amount you receive is calculated based on the balance of your account and factors like your age and the performance of your investments. Think of it as receiving a regular income similar to a salary or wages during your working years.

Flexible access

Unlike taking a lump sum payment, which provides you with all your retirement savings at once, an account-based pension allows you to access additional funds from your superannuation whenever you need them. This flexibility can be valuable, especially if unexpected expenses arise during your retirement.

Investment opportunities

With an account-based pension, your remaining balance is typically invested in various assets, such as stocks, bonds, and other investments. This means that your retirement savings have the potential to continue growing through investment returns. While this growth is not guaranteed and comes with some risk, it allows you to benefit from potential increases in your retirement wealth while still receiving regular income payments.

By considering these income options and understanding how an account-based pension works, you can make informed decisions to navigate unexpected retirement more confidently while maintaining financial stability.

Get Professional Financial Advice

Planning for an early retirement frequently depends on your pension for an extended duration. While this might seem daunting, seeking advice from a financial adviser can offer valuable insights and bolster your financial confidence. The earlier you embark on your retirement planning journey, the greater control you can exert over your financial future.

Investing In Your Future: The Shift From Viewing Financial Advice as a Cost To An Investment

When it comes to financial planning and seeking professional advice, many people are often deterred by the costs associated with it. The common perception is that financial advice is an expense, and one that can be avoided to save money. However, it’s crucial to change this mindset and start considering financial advice costs as an investment in our future rather than just a cost. Here’s why:

Financial Guidance Can Secure Your Financial Future

The primary reason to view financial advice as an investment is that it can have a profound impact on securing your financial future. Financial planners are experts in helping you make informed decisions about your money, investments, and financial goals. By engaging with their expertise, you’re taking steps to ensure that you’ll have a more stable and prosperous financial future. In this context, the cost of financial advice is an investment in building a secure and comfortable life for you and your loved ones.

Maximizing Returns on Investments

One of the key roles of a financial advisor is to help you make wise investment decisions. They can provide insights into opportunities, strategies, and asset allocation that can lead to higher returns on your investments. These returns can significantly outweigh the cost of the advice, essentially turning it into a profitable investment.

Risk Management and Wealth Protection

Financial advisors also play a crucial role in risk management. They help you diversify your investments to reduce risk, source insurance policies that protect your assets and income, and create contingency plans for unforeseen events. By paying for these services, you’re essentially safeguarding your wealth and minimizing potential losses.

Tailored Solutions for Your Goals

A financial advisor creates a personalized financial plan tailored to your unique goals and circumstances. This customized approach ensures that your financial resources are directed toward achieving what matters most to you. In essence, you’re investing in a roadmap that leads you to the life you desire.

Financial Education and Empowerment

A significant part of financial advice involves education. Financial advisors don’t just make decisions for you; they explain the reasoning behind them. This educational component empowers you to make more informed choices in the future, reducing the risk of costly mistakes. Investing in financial advice is, therefore, an investment in your financial literacy and capability.

Long-Term Financial Stability

Building long-term financial stability often requires expert guidance. Financial advisors assist in managing debt, creating savings plans, and planning for retirement. By paying for their services, you’re investing in your own financial stability and peace of mind for years to come.

Tax Efficiency

Tax planning is an essential aspect of personal finance. Financial advisors can help you make tax-efficient decisions, potentially saving you a significant amount of money over the years. This means the cost of their advice is offset by the tax savings you gain.

Emotional and Behavioral Support

Emotions can significantly impact financial decisions, often leading to irrational choices. Financial advisors offer emotional and behavioral support, helping you stay on track during turbulent financial times. This aspect alone can save you from making costly emotional decisions that could erode your wealth.

A Holistic Approach to Financial Wellness

A financial advisor takes a holistic approach to your financial wellness. They consider all aspects of your financial life, from investments to insurance to estate planning. This comprehensive approach ensures that every aspect of your financial health is in good shape, and you’re not missing out on critical opportunities for growth and protection.

It’s essential to shift our perspective and start viewing financial advice as an investment in our future. While there’s no denying that there is a cost associated with seeking professional financial guidance, it’s crucial to recognize that the benefits far outweigh this expense. By investing in financial advice, you’re securing your financial future, maximizing your returns, managing risk, and gaining the knowledge and confidence to make informed financial decisions. So, the next time you consider seeking financial advice, remember that it’s not just an expense; it’s an investment in a brighter, more financially secure future.

Ready to start investing in your future? Call us on (07) 3371 0866 and begin your pathway to a brighter financial future with a Collective Wealth Advisers expert.

Your Guide to our Practical Investment Philosophy

Our Practical Investment Philosophy 

In the ever-changing world of financial planning, finding a strategy that fits your goals and safeguards your future matters most. At Collective Wealth Advisers, we’ve built a unique investment approach that combines expertise, smart risk management, and a wide array of investment options.  

Let’s dive into how we make this philosophy work for you. 

Smart Moves Backed by Experts 

Picture this: a team of seasoned Investment Asset Managers dedicated to studying the market for your benefit. At Collective Wealth Advisers, that’s the team in your corner! We work closely with these independent experts who dig deep into market trends, so your investments are always based on solid research. This means more informed decisions, less emotional responses and better chances of achieving what you’re aiming for. 

Riding High While Staying Strong 

Investing isn’t just about chasing the highest returns; it’s about managing the risks too. Our way of doing this is by adjusting your investment mix based on how the market behaves. We call it Dynamic Asset Allocation. It’s like having a weathervane that changes direction when the wind shifts. This strategy helps us make the most of the good times and cushion against the not-so-good ones. 

More Choices, More Control 

Think of us as your premium investment toolkit with various tools at your disposal. We’re not stuck on a one-size-fits-all approach. We offer you a range of investment options—direct shares, managed funds, ETFs, annuities, and more. It’s about creating a mix that suits you, your current situation and gives your portfolio the best chance to meet your unique goals. 

The Pillars We Stand On: 

Your Future Comes First: We’re not in this just for today. We’re here to help you build a future that aligns with your life goals and financial objectives. 

Clear as Day: We believe in transparency. You’ll always know the where, the why and the how when it comes to your portfolio structure. After all, it’s your money! 

Rolling with the Changes: The financial world doesn’t stand still, and neither do we. We keep an eye on what’s happening so we can guide your investments through the ups and downs. 

Knowledge is Power: We’re not here to just manage your money; we want to help you understand it too. We offer resources and guidance to educate and empower you, and help you make better decisions. 

At Collective Wealth Advisers, we’re not just financial planners. We’re practical partners guiding you on your unique pathway to a better future. We’re here to help you make smart choices, manage risks, and take control of your financial future. Welcome to a world of investing that’s not just about numbers—it’s about you. 

Today, tomorrow…but always together! 

Economic Update and Outlook for Quarter 3, 2023