Blog - Raiz Invest

Bring to the table win-win survival strategies to ensure proactive domination. At the end of the day, going forward, a new normal that has evolved from generation.

Raiz market and economic update

11/02/20

From George Lucas, Raiz CEO 

Coronavirus dents global markets

This week the coronavirus has continued to rattle a number of global markets. In particular, it’s thrown global gas markets into turmoil as Chinese importers threaten to cancel up to 70 per cent of seaborne imports due to collapsing demand and Chinese companies struggling to staff ports.

A similar situation is set to emerge with seaborne imports such as iron ore and copper into China. This is one of the reasons we are seeing the Australian dollar weaken over the last few weeks, with the local currency down 4.8 per cent this year, near its lowest level against the US dollar in 11 years.

In addition to hitting exports of commodities from Australia, coronavirus is set to cause a sharp fall in Chinese tourists which were our largest, or maybe second largest, source of inbound tourists.

RBA unlikely to cut rates in short term

The dual impact of coronavirus and bushfires is likely to result in soft economic growth in Australia for the first half of 2020. Even so, in my view, the Reserve Bank of Australia is unlikely to cut rates in the near term in a bid to boost growth given the weaker local currency and improving jobs market.

Indeed, with inflationary concerns rising, I believe the RBA may be regretting their last rate cut that lowered the official cash rate to 0.75 per cent. That rate cut, in October, was aimed at weakening the Australian dollar amid strong commodity demand. However, with inflation jumping since that time and the onset of bushfires and coronavirus the situation has changed markedly.

Global stocks rally amid coronavirus fears

Despite the global fallout from the coronavirus since the outbreak emerged in January, equities are rallying and last week the US market actually had its best weekly performance since June 2019.

Specifically, the bounce-back equities has seen investors return to risky assets after China’s central bank pumped extra cash into the financial system to help it combat the fallout from the coronavirus.

There was also the pledge from China to halve tariffs on some US imports, which buoyed equities last week. China vowed to slash tariffs, worth about $75 billion, on some US goods from 10 per cent to 5 per cent, and from 5 per cent to 2.5 per cent on others.

Coronavirus impact to hit Europe and US

Like in Australia, which due to its close ties to China has felt the economic effects of the virus quickly, Europe and US are also set to get a spill-over from the virus-induced China slowdown.

However, at the end of the day, equity markets are reacting like traders continue to believe that the coronavirus will be bought under control swiftly and there will soon be a return to business as usual.


Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website.

Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products.

General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.

paint brush and canvas

When it comes to personal finance, one of the big areas many Australians are becoming more interested in is developing their own side hustle.

A side hustle — a job that you can work on top of your full-time job — can be a convenient and fun way to bring in extra money. It can also be a neat way to pursue a personal passion.

Here are four achievable side hustles that you can use to top up your bank account while having some fun at the same time.

Sell products online

Like millions of other people around the world why not consider starting an online business to rustle up some extra cash. eBay, Amazon, Gumtree, Facebook Marketplace and Etsy are all easy and simple to use and can be an ideal place to buy and sell all manner of goods.

Sell your skill set

These days there are host of online marketplaces and sites where you can get paid for your skills. Websites like Airtasker, Fiverr, and Behance offer users the chance to use their skillset, ranging from copywriting, helping with removals, or even car detailing and cleaning.

For the more tech savvy, what about getting into the online tutorial world? Online tutorials such as instructional videos on software programs, cooking, or bike riding can generate thousands, even millions of views, user engagement and generate passive income.

Gig economy driver

If you own a car, it’s at some point you might have turned your mind to taking up a side gig as a ride share driver. Drivers for these services, like Uber or one of its many rivals, can often make a decent hourly income, especially at peak times when pricing surges.

However, before you sign up, remember that there are additional expenses, like fuel, you will incur as a driver that can dent your overall income. You also need to make sure your car meets the minimum requirements to be listed on ride sharing platforms.

Pet-walking

If you’re an animal lover this could be the side hustle for you. Starting your own pet-walking business means playing with a cute animals and getting paid for it, without the responsibility of looking after one full-time. What’s more, it’s a great way to stay healthy and fit.

If setting up your own business isn’t for you, there are a number of apps available that you can sign up for which connect pet owners with pet sitters, such as Mad Paw and Paw Shake.


Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

Whether you’re thinking of purchasing Single Item Insurance with Raiz Insure, or have already taken out a policy, it’s important to understand what you’re covered for and the process for making a claim.

What am I covered for?

Raiz Insure provides cover for your listed item only in relation to loss or damage caused by certain listed events that happens inside your Home (the location shown on your Certificate of Insurance). These events include:

  • Storm – being violent wind, cyclone, tornado, thunderstorm, hail, rain, snow or dust.
  • Flood – being the covering of normally dry land by water that has escaped or has been released from the confines of a lake, river, creek, another natural watercourse, reservoir, canal or dam.
  • Fire – Loss or damage is not covered if a fire is started with the intention to cause damage by:
    • You or someone who lives in your Home; or
    • Someone who has entered your Home with your consent or the consent of someone living there.
  • Theft or attempted theft – is covered provided that:
    • The theft or attempted theft is reported to the police.
    • The burglar gains entry to the building by causing physical damage to the point of entry.
    • If the property has location tracking capabilities (e.g. Find My iPhone), those capabilities must be activated at the time of theft or attempted theft.

You will not be covered for any loss or damage to your item arising directly from storm, fire or flood for the first 72 hours after taking out your policy. This rule does not apply if you have just bought the item and the insurance is effective from the purchase date, or your policy is replacing another policy covering the item and there has been no break in cover.

Theft cover anywhere in Australia

If you choose the optional cover ‘Theft cover anywhere in Australia’ when taking out your policy, you will be protected from theft or attempted theft anywhere in Australia. Cover is provided given that:

  • The theft occurs while the item of Nominated Property is in your sight and is in close proximity to you; or
  • occurs while the item of Nominated Property is in a securely locked building or vehicle, and provided that:
    • the theft or attempted theft is reported to the police; and
    • if the item of Nominated Property has location tracking capabilities, these are activated at the time of the theft or attempted theft.

Accidental damage anywhere in Australia

If you choose the optional cover ‘Accidental Damage’ when taking out your policy, you will be protected from accidental damage anywhere in Australia.

Accidental damage is defined as loss of or damage caused by an unintentional act or unforeseen and uncontrollable incident.

 

How do I make a claim with Raiz Insure?

You can lodge a claim online by logging into your Raiz Insure account.

If you make a claim, you will have to pay any excess that applies to the item. The amount of the excess will be made known to you when you apply for your policy and will also be shown on your Certificate.

Before any claim is payed, Raiz Insure will deduct

  1. any Premiums that are due but haven’t been paid, and
  2. all upcoming Premium instalments between the date of the claim and the end of your Period of Insurance if the nominated item is a total loss. This is because after a claim is agreed to be covered, the cover for your item will end, and you’ll need to take out a new policy for the replacement item if you wish to continue coverage.

What do I need to provide to make a claim?

Receipts of ownership and/or photographic evidence of ownership. You will need to lodge a police report if you are claiming for theft.  You may need to send your item by post to one of the panel of repairers.

If my item is damaged, where can I get it repaired?

Raiz Insure has a panel of repairers which you will need to send the item to by post who will aim send back your item within 14 days.

How are claims paid?

If your valid claim is accepted, your item will typically be repaired or replaced within 14 days. This 14 day replacement or repair period is unable to be guaranteed due to circumstances outside the insurer’s control (such as delays if there is a wait for parts for repair).

The Insurer may choose to provide you with a replacement item or with a voucher to purchase an equivalent item through a supplier, or pay you a cash settlement. If an item requires replacement the typical process would involve either: posting you a brand new item (if able to be posted), arranging for you to pick up the item from a local store (such as JB HiFi), or delivering the item if it is large (TV).

The maximum amount payed for any item is the sum insured for that item as shown on the Certificate of Insurance.

What if I don’t have the original receipt?

When signing up to a policy it is best practice to take photos as proof of ownership. You will be asked for the original receipt or invoice first, if you do not have a copy you will be asked to provide evidence to satisfy the proof of ownership. This includes photographic evidence, mobile phone plan, warranty certificate etc. The claims team will then look at these to assess the report.

Do you need to pay for postage when sending an item for repair?

No, this will be covered by Raiz Insure, under the conditions of your policy. Following receipt of your claim details, you’ll be sent an email with an Australia Post eParcel consignment note attached for you to take to the Post office.  For small items like phones, iPads and laptops, a box and packaging will be provided. For larger items such as PC’s and All In One Computers, you’ll be emailed a Star Track (courier) consignment note, however you will be responsible for packing the item yourself. For larger items an onsite inspection will be arranged.

You can find more information about the claims process and the events you are covered for in the Raiz Insure Product Disclosure Statement (PDS).


Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

Raiz market and economic update

28/01/20

From George Lucas, Raiz CEO 

Global activity data improves

In positive recent news, flash Purchasing Managers Indexes (PMIs) for advanced economies in January showed further evidence of global economic stability, but not a strong pick-up in growth.

The PMIs are consistent with indications from several forward-looking global economic indicators over the past couple of months, while more timely leading indicators of global growth suggest that a slight turnaround in global trade is just around the corner.

ECB keeps policy on hold

Turning to the Eurozone, the European Central Bank (ECB) left policy settings unchanged at its policy meeting on Thursday as was widely expected, committing to sticking to its existing tools.

On the same day, the ECB officially launched its strategic review of its inflation goal and tools, with ECB president Christine Lagarde providing little new information about what the review will cover. Even so, I suspect that persistently sluggish Eurozone growth will keep inflation below the ECB’s current target of just under 2 per cent, prompting it to loosen policy later in this year.

Across in the UK, the Withdrawal Agreement Bill, which will take the UK out of the European Union (EU) on 31 January, passed all its stages in parliament and has been given royal assent. After the bill becomes law, the European Parliament must ratify it, which will set the stage for Brexit to occur.

Australia’s unemployment rate nudges lower

In Australia, the jobless rate fell to a nine-month low of 5.1 per cent in December, with the improvement driven by the creation of almost 29,000 part-time jobs across the month.

The fall in the unemployment rate shows monetary and fiscal stimulus are starting to work and is reducing pressure on the Reserve Bank of Australia (RBA) to cut interest rates. However, it will be strength or weakness in the Australian- US dollar cross that will dictate what the RBA does this year.

Elsewhere in the region, Indonesia’s central bank, Bank Indonesia, left interest rates on hold at 5.00 per cent, but kept the door open to further cuts. With the Indonesian economy struggling, inflation low and the rupiah appreciating against the US dollar, further easing is likely over coming months.

Coronavirus rattles global markets

The coronavirus has been dominating global headlines and there was some weakness in global stock markets, reportedly triggered by fears about the spread of the virus in China, especially in the city of Wuhan. There are now cases reported outside of China, including in Australia.

History suggests such events rarely have long-lasting and widespread effects on equities. Indeed, it is worth remembering that since the SARS outbreak, which was first reported in Asia in 2003, there have been many epidemics and pandemics which have made little discernible difference to global financial markets, despite impacting far more people than SARS.

For instance, outbreaks of diseases like avian flu, swine flu, MERS and zika failed to generate the same kind of panic as SARS. This is perhaps in part because of the initial secrecy that surrounded the SARS outbreak.

Even so, the coronavirus outbreak clearly represents a test for global equity markets right now, despite the recent strength in equities making it tempting to think that the rally can’t end.


Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website.

Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products.

General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.

Jar with money

Getting on top of your personal finances can be tough and a common area where a lot of people fall down is keeping their spending in check when payday rolls around.

That’s because when your pay lands in your account it’s easy to spend too much and then not leave enough for savings and investing as well as all your fixed costs like rent and food.

But it doesn’t have to be this way and whether you get paid weekly, fortnightly or monthly, there are some easy tips you can follow to help manage your money around payday.

Shift your payday habits

Managing your money at payday means having good routines in place. So, it’s a good idea to have a look at your usual spending habits at this time and see if anything needs to change. For instance, if you regularly spend half your pay on buying clothes online as soon as money lands in your account, then you probably need to reassess your spending in this area.

Indeed, if this sounds like you, it may be a good idea to schedule a different, and less costly, purchase at that time, or an activity you enjoy that won’t break the bank.

Get your priorities straight

Your spending priorities are also very important to get right on payday. Remember, if you want to manage your money smarter, and not get caught short before your next pay is due, it’s helpful to pay important things like mobile and internet, rent and insurances first.

Even better, why not consider setting up automatic deductions from your transactions account that can be timed for when your pay arrives. This will enable you to make important payments without having to lift a finger as well as more accurately budget.

Take the hassle out of saving

Living pay check to pay check makes saving money difficult as you either run out of cash before you have the chance to save, or you end up using your savings to cover regular bills.

Breaking this cycle can be tricky, but one option is to open a stand-alone savings account and then have a proportion of your pay automatically deposited into it – a strategy commonly referred to as ‘paying yourself first’. This amount can even be deposited directly by your employer at some organisations.

Want to invest? Think about automatic recurring deposits

Many people, especially millennials, want to get into investing, but may not think they have the money. This could be due in part to financial mismanagement at payday. However, the good news is that mobile apps like Raiz are making it easier than ever to invest and put your money to work.

Setting up a recurring deposit into your Raiz account on payday will automatically invest a portion of your paycheck as you go about your daily life, taking a lot of the hassle out of your hands and removing the need to make big decisions on payday.

What about emergencies?

Payday is not just about saving money or investing, it’s also about ensuring you’ll be okay if something unexpected happens. For many people, this means having an emergency fund.

When it comes to an emergency fund, how much you’ll need will differ depending on your particular  circumstances. But even so, it’s a good idea to reserve some of your pay for unexpected shocks like a death in the family, a medical emergency or a one-off payment.


Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

Raiz market and economic update

14/01/20

From George Lucas, Raiz CEO 

Markets react to US-Iran tensions

There has been significant market drama to begin the new year, including hefty swings in oil and havens such as gold, largely on the back of escalating tensions between Iran and the US.

For instance, in the wake of Iran’s recent missile strikes on US forces in Iraq, Brent crude posted a peak-to-trough drop of almost 9 per cent, sending crude back to near $65 a barrel.

However, for investors, despite the recent rising US-Iran tensions initially sparked by the killing of Iranian commander Qasem Soleimani, it remains important to focus on long-term strategy.

Lessons from the US-China trade war

The ongoing US-China trade war is a case in point here. Over the past 18 months, while the US and China have played out a protracted trade war, there have been regular bouts of weakness in equity and bond markets. Buying in these dips has been rewarding.

We must also acknowledge the crucial role played by very supportive central banks against a backdrop of low government bond yields and interest rates at present. In such an environment, with interest rates so low, if you sell out of equities it can be difficult to decide where to put your money.

This context also applies to the current geopolitical stoush between the US and Iran. In short, asset allocation committees need to be convinced that a pullback in equities is a longer-term correction given the limited upside from holding expensive bonds that provide meagre fixed rates of interest.

It should also be noted that, in practice, the risk that Iran attacks oil shipments in the Strait of Hormuz is low given that China — one of the few friends Tehran has — derives nearly half of its crude imports from the region.

Indeed, according to Bloomberg, less than 5 percent of the 16.5 million barrels a day of crude and condensate oil that flowed through Hormuz last year went to US refineries, making Iranian action there as a move against the US of little utility.

US Federal Reserve’s balance sheet expands

In other news, the US Fed has started to expand its balance sheet once more, with its most recent monetary stimulus spree taking its balance sheet close to its all-time high of $4.5 trillion. This has caused recent weakness in the US dollar and has been boosting prices of US equities.

The weakness of the US dollar will be closely watched by the RBA here and increases the likelihood of a cut in official interest rates here in Australia.

Finally, 2020 is an election year in the US. Given this, the last thing US President Donald Trump will want is protracted volatility in oil prices that dents consumer and business confidence.

____________________

Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website.

Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products.

General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.

Computer screen with stock market information

When it comes to starting out investing, it’s critical that you know the basics before jumping in, including getting across the difference between stocks and exchange-traded funds (ETFs).

The concepts may seem tricky at first, but both stocks and ETFs are at their essence investment vehicles that can give you a way to begin investing. Here are a few more things you should know about these common products as you look to build your portfolio.

What exactly are ETFs?

Stocks and ETFs have some similarities. They both are traded on the stock market in Australia, their prices move up and down and they are linked to the performance of companies. Even so, it’s key to appreciate that stocks and ETFs are different in many ways.

ETFs, one of the fastest growing investment products in the world, are comprised of baskets of different types of investments that are pooled together into a single entity, with each share of an ETF giving  its owner a proportional stake in the total assets of the ETF.

Although an ETF is a type of investment fund that can be bought and sold on a securities exchange market, like a stock, many of them are described as “’passive” investments. Passive ETFs commonly track a market index and do not try to outperform the market. Hence, they will tend to go up or down in value in line with the index they are tracking.

How are ETFs different from stocks?

Stocks don’t work like this. Think about what a stock tracks — a single company. That’s because a stock is a type of investment that represents an ownership share in one company. So, when you by a company’s stock, you’re purchasing a small piece of that specific  company not a share in a proportional stake in the total assets of a fund.

These differences bear on the volatility of both investment types. For instance, when it comes to individual stocks, they can be impacted by things like a bad report, negative profit guidance or even the appointment of a new chief executive. By contrast, ETFs tend to be less volatile than an individual stock because of the diversity involved in the fund.

Are ETFs or stocks better for me?

What product you choose depends on your particular financial circumstances and risk tolerance. A big upside of ETFs is that is that you don’t need to have heaps of money to invest and each share in an ETF gives you exposure to a diversified portfolio of investments.

Another plus is that there are ETFs that cover nearly the whole range of available investment assets in the financial markets. While stock ETFs are most common, there are also funds that target many other asset classes like bonds or commodities.

ETFs are popular with millennials

It’s for these reasons that more millennials are being drawn to ETFs. Indeed, industry research has shown that over 90 per cent of millennials now choose ETFs as their investment vehicle of choice, a rapid rise over the past decade.

The popularity of ETFs among those aged 18-35 is likely due to a mix of factors. For instance,  younger investors may opt for growth ETF portfolios to aim for higher potential returns of around 10 per cent per annum if they do not need to access the money for several years.

There’s also the rise of micro-investing platforms, like Raiz, that have contributed to the increasing popularity of ETFs among younger investors. Such platforms have made ETFs widely available and accessible via your smart phone.

They have also removed much of the leg work from investing. For instance, in the case of Raiz, our expert team has selected a basket of widely traded ETFs and then combined them into six different risk-adjusted portfolios ready for your selection.


Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

Dart Board

The end of the year is the ideal time to make some financial resolutions for 2020. One of the most common resolutions, when it comes to personal finances, is to be a better saver for the year ahead. This sounds easy in theory, but can be harder to achieve in reality.

With that in mind, here are five simple tips to help you achieve your saving goals in 2020.

Have a concrete goal

It’s basic but often overlooked — you’re much more likely to shift your spending habits and get better at saving if you have something to aim at. While the particular goal is up to you, it could be a holiday, a new car, or some new clothes, make sure it’s clear and achievable.

Budget wisely

A budget is also important. That’s because it allows you to see where your money is going and then allocate more to saving and less to spending. Once you’ve examined your income and expenses, you’ll be in a position to know how much income you have to work with at any given time, which will help you to save more effectively in the future.

What also helps, when it comes to maximising your savings, is to look closely at your budget and figure out how much you spend on discretionary items like clothes, holidays and eating out to see where your expenses in these areas can be trimmed.

Analyse your expenses

While reducing expenses opens up more opportunity to save, so does some lateral thinking. For instance, it’s a good idea to keep on the lookout for cheaper deals when it comes to banking, insurance providers or memberships on things like gyms and streaming services.

It also pays to stay on the lookout for cheaper brands of clothing and food as well as savings on utilities, like power or water, by switching providers or using services off-peak.

Get out of debt

It’s simple — debt is not your friend if you’re trying to save. Indeed, you’ll be amazed how much easier saving is when you’re not fighting against spiralling debt.

If you’re in this boat, try and get across how the interest on your debt is calculated and when it’s charged as this can help you manage your repayments and avoid paying unnecessary interest. It’s also a good idea — if you have several debts – to try and pay off the debt with the highest rate of interest first.

Phone a friend!

Even for the most disciplined person saving can get difficult at times, especially with brands constantly trying to get you to open your wallet. That’s why it can help to team up with a family member, mate or colleague who’s also got a saving goal and work together.

Still, if you do have to go it alone, think about imposing some hard spending rules on yourself. For instance, when it comes to impulse buys, one option is to impose a 24-hour ban on splashing cash after it hits your account. If you impose such a “cooling-off” period on yourself, you may realise that what you wanted to buy was not so essential after all.

Additionally, think about taking some of the pressure off yourself by automating saving for next year. It’s easy to schedule a recurring amount of money to transfer from your transaction account to a linked savings account. Doing this can be a convenient way to keep money landing in your savings account on a regular basis.


Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

Raiz market and economic update

17/12/19

From George Lucas, Raiz CEO 

2019: a ‘dramatic’ year in review

This week is an ideal time to reflect on the events of 2019. It’s certainly been an eventful year, including mounting fears of a global recession, turnarounds by the US Federal Reserve and European Central Bank on monetary policy, and the escalation of the US-China trade war.

Elsewhere, it’s been dramatic in the UK where two Brexit deadlines have come and gone, the US economy weakened by more than expected and the eurozone economies slowed, while the Chinese economy has held up a bit better than forecast over the past 12 months.

Despite the geo-political drama, asset prices have risen across the board, with global bonds rallying and equity markets hitting new highs. The reason for this seems to be that equity markets are taking their cue more from central banks than the real economy and growth in corporate earnings.

Indeed, the speed and the scale of the response by central banks this year suggests that policymakers are more attuned to downside risks to growth than the market previously thought.

Swift Brexit resolution unlikely

In the UK, the big general election win by UK Prime Minister Boris Johnson’s Conservative Party now means that the Withdrawal Agreement will pass UK parliament — a significant step towards Brexit.

Nonetheless,  a major break-through on trade or a swift resolution of Brexit next year is still unlikely given the election win sets up a new cliff edge at the end of next year when a free trade deal with Europe will have to be agreed.

Signs of global recovery on horizon

Looking ahead, there are signs that the global economy is slowly stabilising, helped by monetary policy moves and it’s my view that we will start to see global growth recover in late 2020.

In the US, the Fed, which cut interest rates three times this year, will probably leave rates unchanged for the foreseeable future as inflation globally doesn’t seem to be an issue.

Australian economy tipped to remain weak

In Australia, economic growth is probably bottoming out but wage growth is likely to remain weak in the period ahead. Annual GDP lifted to 1.7 per cent in the September quarter, but still remains well short of what is needed to drive down unemployment and boost wages.

If this scenario continues, the Reserve Bank of Australia will have room to cut rates to 0.25 per cent early next year and launch quantitative easing, which markets have yet to factor in. Any strength in the Australian dollar will cause this to happen sooner as the RBA knows that movement in the currency is a much more effective stimulus tool than interest rates.

The Australian dollar is linked to commodity prices and, like other asset classes, oil and commodities have fared better than expected recently, putting upward pressure on the AUD. If this trend continues, the RBA will likely look to monetary policy to help weaken the local currency.

Indonesia: central bank open to more rate cuts

Finally, Bank Indonesia’s Deputy Governor Dody Budi Waluyo recently indicated that the central bank remains open to more interest rates cuts after this year’s four rate cuts.

Similar to Australia, we will probably see a 25 basis-point cut by Bank Indonesia as the Indonesian rupee continues to perform well against the US dollar.

____________________

Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website.

Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products.

General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.

Women sitting atop cliff overlooking valley with path

You may have heard about active and passive investing, but if you’re new to investing you may not be sure exactly what these terms mean or how they work.

We get that. There are lots of concepts associated with financial markets and understanding them all can get tricky. When it comes to passive and active investing here’s the basics.

What is active investing?

In a nutshell, active investment funds are run by portfolio managers who are experts in making investment decisions to take advantage of price fluctuations in the financial market.

Active investors try to beat the returns of the index to which it relates — commonly known as its benchmark. The index, for instance the S&P/ASX 200, contains the companies whose shares the fund is buying and selling. With this style of investing, the manager picks stocks to buy then compares the returns they make against the benchmark.

The benefits of this style of investing include the potential for greater profits and returns than market and index funds and greater control over an investment. But be aware, it can also involve much higher management fees and expenses than other investments. It can also underperform the market due to suboptimal investment strategies.

What is passive investing?

Passive investing is a completely different approach. A common example of passive investing is an index fund that invests in major companies such as those included in the S&P 500 (top 500 US public companies) or ASX 200 (top 200 AUS public companies). Typically, the fund will buy all the stocks in the given index in the same proportion they appear in the index.

Investing in an exchange traded fund (ETF) is also considered a type of passive investing when the ETF is tracking an index. ETFs are essentially a combination of assets (such as stocks, cash or bonds), bundled together under one roof to form a single financial product that can be traded on the stock exchange. The ETF is like an index fund, and their value will go up or down in line with the index they are tracking.

Some advantages of passive investing include reduced expenses compared to active investing and the benefits of diversification that comes with index funds.  Warren Buffett, the all-time active investor legend advocates for passive investing on the basis even if active investing can yield significant profit quickly, often it is the portfolio manager who is rewarded with high remuneration, not the investor.

Which style is best for me?

Like anything else when it comes to investing, you need to make the right decision for your particular financial needs and circumstances.

Some investors, especially those with more knowledge, are comfortable selecting their own portfolio of funds or taking an active approach to investing. Others, particularly those starting out, may want to take a passive approach to investing.


Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

Bitnami