Archive - Raiz Invest

August 2020
Raiz Portfolio Performance Financial Year 2019-20
There is always a lot of interest from our community in the performance of our portfolios. In what has been quite a turbulent year, it is pleasing to report the returns of our investment portfolios are above the relevant Chant West industry benchmark (for Moderately Conservative there is no corresponding benchmark). Keep in mind that past performance is not a good indicator of future performance. The Raiz philosophy is about saving and investing small amounts regularly to build your savings - whether for a rainy-day fund, a short-term goal or building a start for your kids. Regular disciplined savings can help improve your financial position in the long run far quicker than choosing the best fund manager. Raiz Portfolio Returns FY 2019-20 Investing small amounts regularly, using our automatic savings features: Round-ups; Recurring investments; and Savings goal, can assist in managing market uncertainty. 80% of our Raiz community invest at least once a month. There is a saying “It’s not about timing the market, it’s about time in the market” 😊 Feel free to learn more from our blogs about our portfolios and the Raiz philosophy:  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it 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 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.  
Global coronavirus economic fallout continues
Raiz Market Insights 21-07-20 George Lucas, Raiz CEO With Victoria moving to stage four restrictions this week amid a second wave coronavirus outbreak in the state, it’s starting to sink in around Australia that there may be no post-COVID-19 world where everything goes back to normal and the virus is quickly eradicated. This is also the situation overseas. In the US and Europe cases and deaths linked to the virus have started to again rise. In the US, biotech company Moderna, the leading candidate to create a COVID-19 vaccine, which has now gone to stage 3 trials on 30,000 people, will not get FDA approval until it is 100 per cent effective on 50 per cent of the population, in line with the flu vaccination for example. These numbers are still staggering at this level of effectiveness and underscore that there’s no post-corona world where we go back to complete normal.  

Global coronavirus economic fallout continues

As the health impact of the pandemic continues, so too does the economic fallout. This is clear from the raft of euro-zone Q2 Gross Domestic Product (GDP) data released over the past two days, confirming that major euro-zone economies experienced record falls in output. In Germany, GDP fell by 10 per cent quarter-on-quarter, in Italy and France it dropped by 12 per cent and 14 per cent respectively and in Spain it declined by a staggering 18 per cent. In the US, GDP fell by 8.3 per cent quarter-on-quarter, or 32.9 per cent annualised. Still in the US, the government there is still negotiating another stimulus package, with internal disputes inside the Republican party about how to split the money between companies and individuals. They are yet to begin negotiating with the Democrats on the package. Meanwhile in China, the economic recovery there looks robust, with the recent official PMI supporting this.  

COVID-19 cementing big tech dominance

On stocks, the surge in the share prices of big tech -- Amazon, Google, FB, Microsoft, Apple -- since March seems to reflect a view that the coronavirus crisis will likely accelerate the growth of these huge companies. The lack of reaction to the current historic antitrust hearing in US Congress involving these companies presumably means that investors doubt the investigation will result in truly substantive changes to their business models.  

Australia suffers record fall in inflation

In Australia, headline inflation fell 1.9 per cent in the June quarter, marking the biggest plunge in the 72-year history of tracking the CPI. The fall was mainly due to one-off policy changes which will reverse in Q3, so we doubt that deflation will become a lasting feature of the economic landscape. That said, underlying inflation will probably remain depressed for years to come. So, for instance, your 0.20 per cent on your deposit account is still a real interest rate of 2.1 per cent at a -1.9 per cent inflation rate.  

Aussie dollar sell-off remains a puzzle

The latest sell off in the Australian dollar is perplexing, but a partial explanation is the joint fiscal deal agreed in Europe a week or so ago. That clearly appears to have supported the euro, without doing very much for global equities.  Meanwhile, the US has not been able to put a new deal together yet. Another factor may be a slightly delayed reaction to increases in expected inflation, which affect real interest rates and has been one of the driving forces behind the rally in gold. This is mainly due to the massive amount of cash being printed in the US driving an increase in inflation expectations. Now, some of the banks are saying the Australian dollar may get to US80c, with the local currency being driven by the Chinese demand for commodities and a strengthening in economic growth. However, the US dollar is probably moving down because there are currently more sellers than buyers after people piled into US currency at the start of the crisis. Meanwhile,
Bitcoin appears to be acting like it should be the new gold, although it probably isn’t. The recent fall in the dollar and rise in gold seems to have supported bitcoin, which is now priced at over USD11,000.  
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.
July 2020
Introducing the Raiz Rewards Blog
Raiz Rewards has come a long way since launching in 2017! We’ve now got over 200+ partners across a range of categories including food, fashion, travel, home and more. So that you can stay up to date with news, stories and advice from your favourite partnered brands we’ve launched the Raiz Rewards blog. Our goal is to continue to deliver exciting content about the brands that are investing in your future. Get tips and tricks on how to get the most bang for buck and never miss any of the latest news on Raiz Rewards.  

What is Raiz Rewards?

Raiz Rewards is our rewards program that sits within the Raiz app. For online sales simply click the link in the Raiz app or for in-store purchases click to activate then purchase on your linked card. When you do make a purchase with one of our partnered brands, you’ll earn a percentage of your purchase or flat dollar amount re-invested back into you Raiz account or Raiz Super Account. Innovated from a cash-back model, we instead give our customers a ‘cash-forward’ as the cash is used to buy shares. With brands like eBay, Dan Murphy’s, THE ICONIC, Booking.com, Best&Less and more! There is something for everyone.  

What is the Raiz Rewards Blog?

The Raiz Rewards blog sits separate from the Raiz Invest blog to bring you interesting articles about the rewards program and the brands promoted in it. From product launches, current sales or updates or even life advice, we’ll make sure you’re always on top of the most recent news our partners have to share. Check out some of them now:  

How can I be updated with the latest blogs?

Like our Raiz Rewards Facebook page to keep up to date on all of the latest blogs and any Raiz Rewards news.   Check out the Raiz Rewards blog at www.raizrewards.com.au  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it 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 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.
Make your money go further with the Raiz x bundll card
At Raiz, we’re committed to helping our customers take control of their finances by making money management as easy, affordable, and intuitive as possible. That’s why Raiz has partnered with bundll to create the new Raiz x bundll digital Mastercard for our customers. It provides flexibility, convenience, and budgeting power over how and when you pay for purchases.  

What is bundll?

bundll is an instantly issued digital Mastercard for your mobile phone that lets you make multiple purchases of up to your bundll limit at any store where Mastercard transactions are available, with the digital bundll Mastercard linked to your digital wallets, including Apple Pay or Google Pay. The way bundll works is that each week purchases made via bundll over the previous 7 days are aggregated, or ‘bundled up’ into one, with users having up to a fortnight available to you to pay that ‘bundll’ off.  There is no interest charged, like a credit card, on your outstanding bundll balance.  

How is a Raiz x bundll card different to a regular bundll card?

Raiz’s unique partnership with bundll makes it super easy for Raiz users to access and enjoy the benefits that bundll has to offer, with the added flexibility of using Raiz as a funding source. That’s because Raiz users can securely and quickly apply for bundll using their existing Raiz account information and link their accounts. If your Raiz initiated application is approved, you will be issued with a co-branded Raiz x bundll digital card, which will then be available to use in either Google Pay or Apple Pay on your mobile phone. It takes just one tap to add it to your digital wallet.  

Who’s eligible for a Raiz x bundll card?

If you see a Raiz bundll link in your Raiz app then you have been invited to apply. The process is simple, just follow the prompts within your Raiz app to download the bundll app, then go through the quick pre-filled application. Once you have a Raiz x bundll card, you’ll be given a maximum spending limit on your digital bundll Mastercard. Your spending limit depends on the individual background information you provide as part of the sign-up process.  

What are some ways I can use the Raiz x bundll card?

With Raiz x bundll, you have the option to use your Raiz account to pay for everyday spend, like groceries or petrol, in-store or online, and then have a fortnight to repay the amount interest-free. It’s super easy to use online or in-store. When shopping, your Raiz x bundll card is used just like in the same way as any other card. Simply open the digital wallet on your mobile phone, swipe to reveal your Raiz x bundll card and simply tap your phone to pay or enter your card details. Raiz x bundll also gives you flexibility when it comes to budgeting for everyday items. There is no interest charged on your outstanding bundll balance but with a Raiz x bundll account, you can take advantage of bundll’s ‘snooze’ feature that allows you to delay payments for an extra fortnight for a $5 fee. There are plenty of opportunities to be creative with how you spend and budget with the Raiz x bundll card. We’ll keep you informed of bundll card hacks and clever ways to use your card here on the Raiz blog. Watch this space!  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it 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 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. The bundll product is provided by FlexiCards Australia Pty Ltd ABN 31 099 651 877 Australian credit licence number 247415. Bundll, snooze and superbundll are trademarks of Flexirent Capital Pty Ltd, a subsidiary of FlexiGroup Limited. Mastercard is a registered trademark and the circles design is a trademark of Mastercard International Incorporated.
How to use your Raiz annual tax statement for your tax return
Tax time is here again, and even for the financially savvy amongst us, tax time can still be daunting and a bit of a chore. However, with a little help it doesn’t have to be so stressful. Around the 3rd week of July each year, Raiz will issue you with an Annual Tax Statement which you can download from within the Raiz App, or via our website. We will send you an email when it is available for your account. Even if you have sold all your investments during the financial year, you will still be able to log back into your Raiz account to download the statement when it is available. The Annual Tax Statement that Raiz provides to you will break down the different types of financial events which have occurred during the previous tax year on your Raiz investment portfolio. This information is important, and it will enable you, or your appointed tax professional, to successfully complete your annual tax return to the ATO. While many people use a tax professional to file their annual tax return, an increasing number of people submit their own tax return using myTax which is part of the ATO’s myGov online portal. This guide explains how to fill out your myTax return using the information on your tax statement to “Personalise” your tax return. Keep in mind that this guide should only be used by Australian resident taxpayers preparing individual tax returns. It should always be read in conjunction with the ATO guidance notes accessible from within myTax, and should you have any questions in relation to using myTax please contact the ATO directly. Disclaimer: this guide does not take into account your personal circumstances and does not constitute tax advice and should not be relied upon as a substitute for tax advice. We recommend you seek your own independent tax advice to address your personal circumstances.  

Example Raiz Annual Tax Statement:

 

Step 1 – Personalise your myTax return

Be sure to select “Interest”,” Dividends”, “Managed fund distributions”, and “Gifts, donations, interest, dividends, and the cost of managing your tax affairs” by ticking the corresponding boxes. This allows you to declare your numbers in the right place. Once you have done the above, click on [Next] within myTax and you will see the “Interest”, “Dividends”, “Managed fund distributions” and “Deductions” sections available for completion.  

Step 2 – Insert amounts from Annual Tax Statement.

Let’s begin with adding the interest from the Raiz Annual Tax Statement into myTax. Click on [Add/Edit] on the “Interest” section of myTax and enter the information as follows: After entering the “Interest” information, click [Save and Continue] and proceed to enter “Dividends” information as follows: After entering the “Dividends” information, click [Save and Continue] and proceed to enter “Managed funds distribution” information as follows: Note: If the amount shown at 18H on the Raiz Annual Tax Statement is in brackets, this means that you have made a capital loss on your Raiz investment in that financial year. If you make a capital loss, you can use it to reduce any capital gains you made in the same financial year from other investments. If you have not made a capital gain in the same financial year, you can use this loss to reduce a capital gain in a later year. If this occurs, you do not enter anything into 18H, and instead carry the loss forward to a future financial year and offset it against a future Capital Gains. Please consult a Tax professional regarding any questions you may have regarding Capital Gains and how they relate to your personal circumstances. After entering the “Managed funds distribution” information, click [Save and Continue] and proceed to enter “Deductions” information as follows: You have now successfully entered all information from the Raiz Annual Tax Statement into the myTax system.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it 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 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. This guide does not take into account your personal circumstances and does not constitute tax advice and should not be relied upon as a substitute for tax advice. We recommend you seek your own independent tax advice to address your personal circumstances.
Investors watch as the Q2 earnings season kicks off
Raiz Market Insights 21-07-20 George Lucas, Raiz CEO Investors are closely watching Q2 earnings season that kicked off in the US last week as it will shed more light on how hard COVID-19 has hit listed companies in different sectors. The pandemic’s effect on the US economy started to be felt in mid-March when lockdown measures were first imposed, meaning that this earnings season will be key in assessing coronavirus fallout.  

Healthcare, IT, consumers staples holding up in crisis

In general, the earnings of US firms in the healthcare, information technology and consumer staples sectors appear to have held up best, while those of firms in the energy, consumer discretionary and financials sectors seem to have fared worst. Returns from the information technology and consumer discretionary sectors stand out as being surprisingly strong, given their prospective earnings and sales results. That owes much to mega-cap stocks that drove the market up in the first half of 2020 and continue to do so. Since late March, investors have been focusing on the prospect of a strong economic recovery from its lockdown-induced slump. With that in mind, the biggest threat to the overall stock market now is probably a renewed hit to economic activity from the recent resurgence of coronavirus cases.  

S&P 500 resilient despite US surge in COVID-19 cases

Looking at where we’re at now, two surprising things have happened since early June. First, the S&P 500 has hardly fallen, despite the surge in new coronavirus cases in the US and signs that the economic recovery there is stalling. Second, it has performed no worse than major European indices, even though outbreaks are increasingly under control on the other side of the Atlantic. There are several explanations for the S&P 500’s resilience. First, there have been a range of support measures for the financial system, while another view is that the market has just ignored what has happened in the economy altogether and has been driven indiscriminately higher by new money. The unusual composition of the S&P 500 has helped to offset the influence of the broad economic trends outlined above. Technology-related sectors and in health care are significantly overrepresented in that index relative to most benchmark indices elsewhere, and compared to the structure of the US economy. The sectors are especially resilient to the coronavirus-induced slump. The S&P 500 also contains nearly all the world’s very largest listed firms, including several global oligopolies with vast cash reserves. Big firms with strong balance sheets have been much better able to weather the coronavirus storm than others. It should be noted that within the index several industries like hotels, restaurants and leisure, energy and airlines, are struggling. They are highly-vulnerable to virus-induced changes in behaviour, have slumped by 13 per cent, 23 per cent and 28 per cent, respectively, since 8 June.  

China data upbeat despite COVID

In China, June trade data was better than expected. It showed inbound shipments jumped by 14.1 per cent, the largest month-on-month increase since 2012, adding to evidence that domestic demand was strong at the end of Q2. After a sharp contraction in Q1, China’s GDP grew 3.2 per cent year-on-year last quarter, taking it back above the pre-virus level reached in Q4 2019 in seasonally-adjusted terms. What’s more, monthly activity and spending figures for June showed that growth was accelerating heading into the third quarter, on the back of policy stimulus. Labour market data was also encouraging, showing the improved job conditions helped drive a recovery in disposable incomes. Looking ahead, the recovery in China is likely to slow over the remainder of the year now that the initial boost from re-opening post COVID-19 has passed.  

Australia’s jobless rate hits 22-year high

In Australia, the number of unemployed people rose by 69,300 to 992,300 in June, pushing up the unemployment rate to 7.4 per cent for the month, according to the latest ABS figures. We hope that the unemployment rate has now peaked.  
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.
Raiz Quarterly Update from George Lucas, Managing Director/CEO
raiz quarterly update The 2019-20 financial year has been bitter-sweet for Raiz Invest. At a corporate level, it has been a year of remarkable achievement, both in Australia and Southeast Asia. However, this achievement has been overshadowed by COVID-19, a human tragedy that has exacted a heavy toll on many of our customers’ lives. Australia may have managed this pandemic better than most countries. However, the second wave that has erupted in Melbourne, forcing another strict shutdown, is a reminder that we are still combatting this virus and its impact on the economy. Throughout this pandemic, which has been with us for nearly five months, the health, safety and well-being of our customers and staff remain a priority, and we hope you and your families are keeping safe during these troubled times. The last quarter (April-June) of the 2019-20 financial year capped a very successful 12 months for Raiz. There is no better evidence of this than the fact both Funds Under Management (FUM) and active customers rose, with FUM up 30.6% to $453.6 million and active customers up 15.1% to 223,730 during the financial year. Pleasingly, superannuation FUM grew despite the fact customers are drawing down their super by taking advantage of COVID-19 Early Release. Revenue also rose by more than 60% (unaudited), illustrating that revenue in the Raiz business model can grow significantly faster than customer growth, in contrast to transactional financial services businesses. This growth again highlights the customer loyalty we enjoy, which is a testament to our commitment to service and the increasing relevance of our products and services. Raiz is a savings and investing mobile first platform, but we are also proud that our moderate (balance fund) portfolio option has outperformed the largest superannuation fund in Australia, AustralianSuper, for the past two financial years. The performance of AustralianSuper has been a bellwether for the superannuation industry. In May, we offered users exposure to Bitcoin, a relevant alternative asset class for many of our customers, with the launch of our seventh investment portfolio, Sapphire. It is not for everyone, but we have more than $11 million in FUM and over 8500 customers using this portfolio. We will continue to expand our investment options as part of our commitment to offer the complete savings and investment package. In Southeast Asia, it was exciting to announce in June that our joint venture subsidiary, Raiz Malaysia, had been issued a Digital Investment Management licence, and that we have started marketing our products to the 33 million Malaysians. We have more than 12,000 sign-ups, and growing, in just over a month. Indonesia continues to grow. We have learnt a lot from our beta testing, we have attracted over 95,000 signups to the App. We are now launching the new App that includes all our learnings from the beta testing and will start introducing fees. Indonesia is a unique market, accelerating at a significant pace. The fact that we have a licence and strategic partnership relationships ensure we are well positioned to participate in this growth. Raiz’s future has been set. The Australian business continues to be cashflow positive. We have $13 million in the bank as at 30 June 2020, and our Southeast Asian operations are up and running. We have been tested as a company by this pandemic, but management and staff have been equal to the task. What has driven us in these past difficult months has been our customers’ loyalty at a time when many of you are experiencing real hardship. So, let me thank you. And, please, stay safe. Yours sincerely, George Lucas Managing Director /CEO  
  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.
How to understand end of year financial reports
When it comes to making smart moves in the share market, a good place to start can be looking at an annual report. That’s because a company’s annual report is often a key way for potential investors to get an insight into the financial state of a company. Understanding an annual report can be confusing and even frustrating for those new to investing, so here are a few tips to help get you started.  

What is an annual report?

Simply put, an annual report includes information about the company, its activities, its financial accounts such as profit and loss, and strategies over the previous 12 months. This publicly available information contained in the annual report is published by a company in accordance with the accounting rules and laws and includes the directors’ report, the financial report and the auditor’s report on the financial report. In Australia, a company’s annual report will include a report on renumeration of key personal and often also include non-compulsory elements that provide further windows into its operations. For instance, there may be reports from the CEO and chairman or reports related to sustainability or corporate social responsibility aimed at further enhancing shareholder knowledge of these areas.  

When is an annual report prepared and published?

There are strict rules here in Australia. Annual reports must be prepared each financial year by all public companies as well as all large proprietary companies. Listed companies must prepare and send a copy of their financial accounts to all members at least 21 days before their annual general meeting and within four months of the end of the financial year. Thankfully, all listed companies also publish their financial statements and reports with the ASX, making them publicly available and on their website and notify shareholders of their action. Companies also lodge copies of their annual reports with ASIC.  

What to focus on when reading an annual report?

One of the key parts of a listed company’s annual report is the directors’ report. This is especially important because it contains information that shareholders of the company -- and potential investors -- may need to make an informed assessment about its operations, its financial position, its business strategies, and its future prospects. The company’s financial report is another important part to consider. It provides information about the financial performance and financial position of the company, and tells the story of the company in number, and can be particularly useful to potential investors keen for an insight into its financial health.  

The four primary financial statements

Delving into more detail, it can be useful to look at annual report’s profit and loss statement, balance sheet, statement of changes in equity, and the statement of cash flows. These reports are prepared in strict accordance with the accounting rules, which are also disclosed in the financial statements, though some of these accounting rules are not intuitive. In summary:
  • The profit and loss statement shows the revenue and expenses of the company during the reporting period
  • The balance sheet shows the assets and liabilities of all the resources controlled by the firm and all its obligations
  • The statement of changes in equity reports all changes to equity during the financial period, for example if a company issues new shares to raise capital
  • Statement of cash flows shows the cash inflows and outflows into the company’s bank account over the reporting period.
These statements can be great to check out as they show information relevant to the previous 12 months and comparative figures for the prior corresponding period on how the financial performance of the company has altered over that time. While often overlooked, the auditor’s report is another valuable section of a company’s annual report. It’s the product of auditors -- independent accounting practitioners appointed by the directors and confirmed at the AGM -- who are engaged to provide an opinion on the financial report. This section sometimes includes matters that will cause the auditor to issue a report that is qualified and can be useful to keep an eye on.  

Being Prepared

Remember, if you’re thinking about diving into a listed company’s annual report it helps to be prepared. So, before you get started make sure you’ve done your homework on the industry sector that the company operates in and the current and future market conditions.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it 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 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 making a decision to invest in Raiz and is not a good predictor of future performance.
This is the expected dividend schedule for Raiz ETF's (FY2020/21)

Keen to know when your next dividends will be paid? See the dates below. In the 19/20 financial year, Raiz re-invested over $11.7M in dividends back to our users.  

What is a Dividend?

As well as gains on market returns from investing, dividends (or distributions) is money paid by a company back to you, their shareholder, out of its profits. Raiz users choose to invest in one of our six investment portfolios, that comprises a mix of nine different exchange traded funds (ETF). The underlying stocks of these ETFs which make up the Raiz portfolios pay dividends from time to time. The ETF provider pays these dividends out, quarterly or twice yearly.  All dividends received by Raiz will be automatically re-invested back into your Raiz investment account, and your chosen portfolio. See our blog on 
What is an ETF and how they differ. When they are paid out will depend on what portfolio you are on. Below is a schedule on when we expect dividends to be paid by the ETFs accordingly for the financial year ending 2020.
Note: Some of these dates are estimated timings based from last year’s payment schedule that will change. Please refer to each ETF provider’s website for more details on exact dates when made available.
 

A quick summary on each ETF payout:

  • AAA (Cash) pays monthly
  • IVV (S&P 500) pays quarterly
  • IEU (S&P Europe 350) pays twice yearly
  • STW (S&P 200) pays quarterly
  • RCB (Corp. Bond) pays quarterly
  • IAF (Composite Bond) pays quarterly
  • ETHI (Sustainability) – pays twice yearly
  • RARI (Responsible Investment) pays twice yearly
  • IAA (S&P Asia 50) pays twice yearly
 
  Important Information The information on this website is general advice only. This means it 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 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 making a decision to invest in Raiz and is not a good predictor of future performance.
You asked, we listened: here's a breakdown of our portfolio selection.
Recently we’ve had some requests from the community to release a breakdown of the selection of our portfolios. Today we’re happy to share that with you! Whilst this data is interesting to mull over, it shouldn’t be your primary consideration in deciding which Raiz portfolio is the most suitable for you. The Raiz portfolios are structured to align with different specific risk profiles, which range from conservative to aggressive. When investors have a longer investment timeframe, they are generally comfortable with taking on more risk, as the market will have many years to recover in the event of a pullback. That’s why you will often hear the phrasing that in the long term, the market tends to go up. A more aggressive option may be more suitable for a long-term investor. On the other hand, a short timeframe in the market could easily see a downturn. In the event you need to sell your investment during a market downturn, you might be forced to accept lower (or negative) returns. Therefore, when choosing your portfolio with a short-term goal in mind – it may generally be best to invest in a conservative option to reduce the likelihood of the investment decreasing in value in the short term. Whilst we’ve tried to make investing across different risk classes as simple and clear as possible, everyone’s personal tolerance for risk and circumstances are different, so you must read and understand the Raiz Invest PDS and seek professional financial advice where appropriate.  
  Important Information The information on this website is general advice only. This means it 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 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 making a decision to invest in Raiz and is not a good predictor of future performance.
Global recovery strategies put to the test
Raiz Market Insights

06-07-20

George Lucas, Raiz CEO

In the wake of the resurgence of coronavirus in Victoria, it’s clear that the most effective form of government action to ensure a quick recovery will be a plan that reassures Australians it is possible to reopen without risking new outbreaks of the virus, and that if new outbreaks do emerge, like in Victoria, they can be contained without having to reimpose national or state-wide lockdowns. If governments get the ongoing response right, it will encourage those who have been saving during lockdown to spend thus mitigating the need for significant additional ongoing fiscal support from the governments. However, if fear and uncertainty about Covid-19 continues then Australians’ precautionary savings may likely increase, and consumer demand will remain depressed. In this scenario, there will be a need for significant additional stimulus.  

Coronavirus and the future of retail

We’ve seen large net savings into the Raiz App in April, May and June. If this continues it does not bode well for the long-term recovery of retail demand in Australia. This enforced savings is also one of the reasons why retail money has been pouring into equity markets and supporting them since the lockdowns started, globally. This leaves the federal government in a tricky position. If it pulls JobKeeper and JobSeeker too early the recovery will be weaker, however if they keep it too long inflation pressures may develop and equity markets may become overvalued quicker than would otherwise be the case. In my opinion, it’s better to err on the side of providing more stimulus. Another question for the government to consider as JobKeeper and JobSeeker are wound down is whether it will switch to infrastructure investment, which provides the biggest bang for your fiscal buck. This debate over the future of fiscal stimulus is likely to intensify over coming weeks.  

Chinese shares surge to 5-year high

Looking overseas, Chinese stocks rallied to a five-year high after a survey suggested the nation’s economy was recovering from Covid-19. The CSI 300 benchmark index of Shanghai and Shenzhen-listed shares lifted 1.9 per cent on Friday to close the week at its highest level since June 2015. Still in China, the Caixin/Markit purchasing managers’ index showed that activity in the Asian superpower’s services sector rose in June at its quickest pace in more than 10 years. The survey noted that Chinese “businesses were highly confident about the economic outlook” but that employment continued to fall and it would take “time for the economy to fully recover”. So far, China’s Covid-19 case counts appear under control and the reopening of the economy is relatively successful.  

RBA likely to keep rates on hold

Locally, the Reserve Bank of Australia (RBA) Board meets on Tuesday and is tipped to keep the official cash rate at its record low of 0.25 per cent. The meeting comes after data last week showed retail sales rose above their pre-virus level in May and we hope that they will climbed further in June.  
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.
Bouncing back with a budget
Despite COVID-19 restrictions easing across the country, the economic fallout from the pandemic continues to be felt many thousands of Australians from all walks of life. However, it’s also the perfect time to look forward and make sure your finances are stronger than ever to meet whatever challenges arise down the track. Indeed, with so many Aussies still experiencing employment disruption like layoffs and reduced hours, now is an ideal moment to look at your budget, actual spending, and savings to make sure you can navigate these unprecedented times. With that in mind, here are some simple and effective ways to budget with the money you have right now to make sure you build a safety net of savings and protect your financial health for the long term.  

Revamp your budget

When it comes to budgeting, now’s a good time to get money smart so you can emerge stronger and more prepared in relation to your personal finances. First, you’ll need to reassess your income. When it comes to this side of the ledger, you can split things up into dependable income, like your salary and things like capital gains from shares or dividends, and examine what they look like now. Depending on your individual circumstances, you might find your income has a new baseline if your hours have been reduced or if you’ve been impacted by a layoff caused by recent economic disruption. However your spending may have fallen more, creating excess savings which could be put away for a rainy day before your expenses increase again. Doing this analysis now, after forced cut backs in spending during COVID may give you a foundation to start reassembling a sustainable budget that works with your expected income during these difficult times.  

Cut your expenses

If you’re strapped for cash, the next thing you may want to do when figuring out your budget is look at how you’re spending your money and where you can make cuts. Some of these cuts may have already happened due to COVID with the forced reduction in your discretionary expenses like shopping, eating out, subscriptions and holidays. On fixed costs, like rent, utilities and insurances, you can also get active by looking for better deals or asking for payments to be temporarily suspended or deferred, then restarted as social distancing eases and your financial situation becomes more certain.  

Take a close look at essentials

With essential spending like housing, it also pays to get creative. For instance, if you’re renting, consider letting out a room to a lodger to help make up a sudden fall in income. Or, if you’re a home owner worried about falling behind on mortgage repayments, don’t hesitate to reach out to your lender about options for reducing your payments temporarily. You could also consider refinancing your home loan if that suits your particular financial circumstances.  

Money for a rainy day

While some people may need to make fundamental changes to their budgets, today’s altered conditions also represent a chance to plan and safeguard against other unknown shocks that may occur down the track. This is where building an emergency fund now is a smart idea. Just putting a small amount away on a regular basis can add up over time and make a big difference. How much you should aim to have in your emergency fund will differ from person to person, but it’s advisable that it can cover the basics like rent or mortgage repayments, food, loan repayments, transport, utilities and phone and internet for two or three months.  

The final word

In these unprecedented times, being as smart as possible with your money is more important than ever. If history has taught us anything when it comes to budgeting, it’s that being on top of your personal finances goes a long way when you’re looking for extra security and peace of mind in times of greater uncertainty.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it 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 or tax accountant 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 making a decision to invest in Raiz and is not a good predictor of future performance.
June 2020
Tax time: how COVID-19 could boost your tax return
Jar with moneyWith the end of financial year approaching fast, millions of Aussies are set to lodge tax returns in very different financial circumstances than before the COVID-19 crisis. While coronavirus has caused a lot of disruption across the country, tax time is a chance to take advantage of extra measures aimed at helping taxpayers navigate the pandemic. Here are some helpful tips to keep in mind when completing your tax return this year to make sure you maximise your refund during these tough times. As everyone’s tax circumstances are different please check with your tax advisor what is relevant to you.  

Get your working from home expenses right

With thousands of Australian employees working from home during the crisis, there’s likely to be a surge in the number of taxpayers claiming working from home deductions. In response to the expected pick up in this area, the ATO has rolled out a temporary method that allows taxpayers to claim 80 cents for each hour they work from home doing the job they normally carry out in an office, and have incurred additional expenses. In a big win for taxpayers, it means, unlike before the pandemic, you don’t need to have a dedicated area of your home like a home office set aside to get a deduction.  

Automatic offset to apply

Millions of Aussies are also set to benefit from between $255 and $1,080 in tax cuts for the 2018-19 financial year -- a welcome boost in the wake of COVID-19. Taxpayers earning over $126,000 are ineligible, but those earning under $37,000 will receive up to $225, while those on between $37,000 and $126,000 can get up to the full $1,080 in tax relief. The tax cut will be automatically applied when you lodge your tax return.  

Don’t forget the instant asset write-off

EOFY is always a time when deals abound, but this year things are even better if you need to make a business purchase thanks to an expanded instant asset write-off program. The program means firms can now claim accelerated depreciation on new assets worth up to $150,000 as part of the federal government’s response to COVID-19. The federal government has also extended the deadline for making claims from July 1 to December 31.  

Deductions for protective clothing

This year is also set to see a pick-up in taxpayers claiming deductions for protective gear like face masks, gloves, gowns or sanitiser needed for work in customer- and client-facing roles. Importantly, taxpayers in industries like healthcare, retail and hospitality can only claim these items if they paid for them and were not reimbursed.  

Other deductions to keep in mind

COVID-19 aside, there are many deductions that can be easy to overlook at tax time. For instance, if you use your mobile phone to make work calls, text messages or use the data for work purposes, then you can claim it as a deduction. Internet expenses also can be claimed. If you work from home and have your internet connection in your name, then it’s possible you could also claim that expense. In this case, you can estimate your monthly internet use as a percentage of the total household usage. Similarly, when it comes to using your car or travel, you can make a claim for work related travel and vehicle expenses provided they meet the eligibility criteria set out by the ATO. Other common, but sometimes overlooked deductions, include union fees, donations of $2 or more to an appropriate charitable organisation and rental property expenses like gardening and lawn mowing, pest control and bookkeeping fees. But remember, whatever deduction you’re seeking to claim, you will need to have a record to support it and you should check with your tax advisor. Records, usually receipts, must be kept these for five years from when you lodge your tax return in case the ATO asks you to substantiate your claims.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it 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 or tax accountant 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 making a decision to invest in Raiz and is not a good predictor of future performance.
What's the deal with voluntary super contributions?
We’re almost at the end of the 2019/2020 financial year, which means tax returns are back in fashion. Depending on your circumstances, you may be eligible to make voluntary contributions into your super before the years end which could be tax deductible.  

Concessional and Non-concessional Contributions

When a contribution is made into your super, it is classed as either concessional or non-concessional. A concessional contribution is any contribution for which a tax deduction could be claimed for (such as compulsory employer contributions and salary sacrifice amounts), whereas a non-concessional contribution is any contribution made with after tax earnings. Concessional contributions are taxed 15% upon entry into the super fund, unless your taxable income exceeds $250,000 for the year, in which case the tax rate is 30%. These contributions can be made up to a limit of $25,000 each financial year. Personal contributions you make with your after-tax income may be able to be claimed as a tax deduction and could count towards your concessional contribution limit. It should be noted that if you contribute too much money into your super for a financial year, you may have to pay additional tax.  

Why do concessional contributions matter?

Suppose you earn $65,000 a year and make a $10,000 concessional contribution into your super. After the contribution is taxed 15%, the net contribution is reduced to $8,500 invested in your super fund assets. Had you taken that $10,000 out as income and paid 32.5% on tax, you would be left with only $6,750 to invest outside of super.  

How do I claim a tax deduction on my after-tax contributions?

In order to claim a tax deduction on personal contributions, you must first provide your notice of intent to your super fund. There are various ways to give your notice, depending on your super fund. If available, you can use your funds own paper or electronic form. Alternatively the ATO has their own form which you can choose to complete:
Notice of intent to claim or vary a deduction for personal super contributions. Your notice of intent must be given by whichever occurs first of the following:
  • The day you lodge your tax return for the year in which you made the contributions
  • The end of the income year following the one in which you made the contributions
With the financial year ending soon, any voluntary contributions you make with the intention to claim as a tax deduction must be received by the fund by 30 June. Otherwise they would probably count towards the next financial year! Please check with your tax advisor on how voluntary super contributions may affect you.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  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.
May 2020
Stocks, gold and oil: How has COVID-19 impacted markets?
Stocks graphFrom Kylie Purcell - investments editor at Finder There’s no doubt that COVID-19 has had an enormous impact on markets the world over, as investors scramble to find a good place to keep their money. With some analysts pegging 2020 as the start of "The Greater Depression", it’s no wonder that global markets are seeing unprecedented volatility. And as stock markets fall, savings rates stall and property prices appear grim, you'd be forgiven for thinking the future of your investments was on a knife's edge.<!--more--> But don't forget that during times of adversity you'll find some of the best opportunities, and nowhere is this more evident than in the investment world. While Australia’s stock market (S&P/ASX200 index) has plunged as much as 34% since February, investors have never been more active. Between February and April, more than 4,000 Australians a day signed up to investment platforms to take advantage of the lower prices, an increase of more than 300% compared to previous months, according to the latest ASIC data. At the same time, not all markets have performed badly during the pandemic. In fact, some assets have rallied this year, hitting record highs, despite (or rather because of) fears of an impending recession.  

Which markets are winning?

During times of economic uncertainty, money tends to move out of riskier assets such as stocks and into “safe-haven”
investments like gold, bonds and even cash. With interest rates at record lows and political power plays continuing to disrupt global trade, the Australian price of gold has been on a rapid ascent since late last year. In late March, gold hit an all-time record high, bolstered by fears of a global economic slowdown and concerns that currencies could be devalued by a wave of COVID-19 stimulus packages. When monetary systems have failed us in the past, it’s historically gold that we’ve fallen back on. So when central banks start lowering interest rates in a bid to jump-start slowing economies, the price of gold usually moves in the opposite direction. Although precious metals such as silver, gold and platinum sometimes have a tendency to run together, the nature of the pandemic has left a number of these markets in a much more vulnerable position. The prices of palladium and platinum, for example – metals commonly used in car parts – have rallied in the last 12 months, only to hit a wall when COVID-19 struck. While palladium hit a record high in February, both metals fell by around half in March, as investors weighed how the pandemic would impact both supply and demand.  

Which markets have been the worst hit?

The energy sector has been one the hardest hit during the COVID-19 pandemic, for a number of reasons. The pandemic was already bad news for the oil sector, but the situation worsened after a price war erupted between Russia and Saudi Arabia on the back of a failed OPEC (Organisation of the Petroleum Exporting Countries) meeting in late February. By late April, US crude oil price futures had fallen below $0 for the first time in history, as the market became flooded and demand for fuel plummeted. With planes, vehicles and manufacturing plants no longer needing the usual supply of oil and gas, producers – even countries including Australia – have needed to pay just to keep their barrels in storage. This volatility in the oil sector has also been bad news for the stock market, with some investors fearing that energy company defaults could lead to a broader credit crunch. After news of OPEC tensions in March, Australia’s ASX200 index saw its biggest one-day fall since the GFC (-7.4%), followed by its fastest drop into a bear market in history in the following weeks. At the same time, oil company share prices such as Oil Search, BHP Ltd and Woodside Petroleum fell by as much as half.  

The unknowns

Other investment markets such as property have been slower to react, and it still remains to be seen how they will move. The latest numbers from property consultant CoreLogic show that property prices fell sharply in April compared to March, but still rose overall by 0.3%. With Australia’s immigration and tourism numbers drying up and unemployment at record highs, economists predict that we could see property and rental price falls across major cities. In a “worst-case scenario” offered by CBA last week, prices could fall as much as 30% by 2022. Commercial real estate is also under pressure, as companies will likely question the need to have their workers sitting in expensive CBD offices. This all sounds pretty gloomy, but at the end of the day, any market that has fallen is an opportunity for new investors to potentially scoop up a bargain. Falling property prices are undoubtedly bad news for existing investors, yet they may also be the much-needed hand that young Australians needed to get their foot on the property ladder. And while oil and stock prices are hitting multi-year lows, savvy share market investors are seeking out good quality companies and exchange traded funds to prepare for a stock market recovery. Long story short, nobody really knows what will happen after the COVID-19 pandemic, but history tells us that even in the direst of circumstances (think both World Wars), markets tend to recover eventually. Kylie Purcell is the investments editor at Finder. These are the views of Finder and not Raiz.   
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  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.
3 things to know about the new Sapphire portfolio.
bitcoin-trophy-against-pricesWe all have that one mate (or several) that cannot keep their mouth shut about Bitcoin (BTC). If you are struggling to think of which friend that may be, chances are that person is you. Irrespective of your personal affinity for the cryptocurrency, Raiz has released the Sapphire portfolio with a target weight of 5% towards Bitcoin. We explore below what this means for casual and serious crypto investors alike. Here are 3 things we think you should know before choosing the Sapphire portfolio.  

It’s very risky: The wins could be big, but the losses could also be bigger.

The first and most important thing to know is this – cryptocurrencies such as Bitcoin and Etherium are extremely risky and volatile. At time of publishing, the price of Bitcoin sits at $13,435.10 AUD and will most likely change dramatically again by the time you have refresh this post. Many of the risks associated with Bitcoin are not the same risks you would experience on a normal financial exchange, such as a stock market, so it’s important to read our
product disclosure document which provides more information about the risks, fees and costs. The Sapphire portfolio will not be suitable for everyone, but if you are interested in buying Bitcoin for the long term and understand the risks, then Sapphire may be suitable for you. The suggested minimum investment timeframe is 5 years for an alternative asset class such as this, so you should consider both your personal risk tolerance (and patience!) before deciding if Sapphire is suitable for you. Takeaway: Sapphire is very risky – only do it if you are prepared to hold steady through its peaks and troughs.  

It’s about choice: Sapphire is 1 of 7 portfolio options within Raiz.

After 18 months of research, and development by the Raiz team, Sapphire is now an option for customers looking to introduce Bitcoin into their investment portfolio (excluding superannuation). Millennials are typically the biggest global drivers of crypto investment, and with most Raiz investors falling into that age group, it’s no wonder that the appetite for a BTC portfolio has been growing. CEO George Lucas also observes that “…the Sapphire portfolio is another example of Raiz listening to our customers and giving them choice and control over where they invest, especially as we emerge from the COVID-19 pandemic and they want to re-examine their investment options.” Put simply, Sapphire gives you the option to dip a toe in the water with investing in Bitcoin. Takeaway: At your next dinner party, it may be worth mentioning Sapphire to that one mate who always talks but never does anything about “getting into crypto”.  

It's simple: Raiz is not a trading tool, so Sapphire is a secure way to get Bitcoin exposure without the complexities of trading.

With a target 5% asset allocation, the Sapphire portfolio provides investors a chance to reap the potential of Bitcoin while limiting their exposure in a risk-adjusted way. Diversification is a central pillar to smart investing, so if you are looking to introduce cryptocurrency into your long term strategy, Sapphire may be one way to bring Bitcoin into your portfolio without the overheads of currency trading. Raiz also uses the Gemini Exchange to buy, sell and store Bitcoin, a world leading cryptocurrency exchange that is regulated by the New York State government. You can read more about Gemini here. Takeaway: It’s hard work to buy Bitcoin – Sapphire let’s you micro-invest in Bitcoin without the trading. Before deciding to invest you must read the product disclosure statement to understand the risks, cost and fees associated with the Sapphire portfolio.  To preview the Sapphire portfolio, visit the portfolio page in your Raiz app.   [caption id="attachment_6147" align="aligncenter" width="394"]open app Click here to open your portfolio settings.[/caption]

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 releases new Sapphire portfolio with Bitcoin allocation

bitcoin

Media Release

Raiz Invest, Australia’s leading micro-investing app, will offer investors exposure to Bitcoin with the launch of its seventh investment portfolio that will have a five per cent target allocation to this alternative asset class. The new portfolio, called Sapphire, has taken 18 months to develop, and has been specifically designed to meet growing customer appetite for exposure to the alternative asset class of cryptocurrency. Aside from Bitcoin, the remaining 95% of the portfolio will comprise US, Australian, European, and Asian large-cap stocks, as well as the Australian corporate debt and money markets, all via exchange-traded funds (ETFs). Raiz CEO George Lucas says: “Although this latest portfolio offering from Raiz is very high risk, feedback from many customers has clearly shown that they have an appetite for an investment strategy that has an exposure to cryptocurrencies, and the Sapphire portfolio has been designed with this in mind. “The investment objective of the Sapphire portfolio is to provide exposure to Bitcoin in a managed, risk-adjusted way. The minimum suggested investment timeframe is more than five years. “Many of our investors are Millennials, who have time on their side when adopting an investment choice such as the Sapphire portfolio for the long term. “A December 2019 report by the US stockbroker Charles Schwab revealed that while stalwart companies ranked among the top investment picks for Baby Boomers and Generation Z, Millennials were more inclined to put money into crypto assets.” Financial advisers are showing an increasing interest in Bitcoin for their clients’ portfolios, according to some recent overseas surveys, although only a small number of financial advisers recommend it.  With governments printing more money globally due to the COVID-19 crisis, cryptocurrencies such as Bitcoin may play a more important role in a client’s portfolio in the future. Since launching its first investment portfolios in 2016, Raiz has embarked on a deliberate strategy to listen to its customers and deliver investors a selection of investment portfolios, ranging from conservative to aggressive. The Emerald portfolio was launched in 2017 to cater for investors wanting their investments to be socially, ethically, and environmentally responsible, again based on customer feedback. Lucas says: “The Sapphire portfolio is another example of Raiz listening to our customers and giving them choice and control over where they invest, especially as we emerge from the COVID-19 pandemic and they want to re-examine their investment options.” Raiz will trade and store Bitcoin with Gemini, a cryptocurrency exchange and custodian founded by the Winklevoss twins. Gemini is a New York Trust company regulated by the New York State Department of Financial Services. It is one of the safest cryptocurrency exchanges and custodians in the world. Jeanine Hightower-Sellitto, Gemini Managing Director of Operations, says: "Raiz is advancing micro-investments via its new portfolio that provides customers an opportunity to invest in Bitcoin in a thoughtful, regulated manner. We are excited Raiz has selected Gemini as the trusted cryptocurrency exchange and custodian to support this portfolio launch and to help further the adoption of this asset class in the Australian market."  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  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.
Political tensions increase amid coronavirus backdrop
Raiz Market Insights

25-05-20

From George Lucas, Raiz CEO

 

China unveils new COVID-19 stimulus measures

This week saw China pledge $500 billion worth of fiscal stimulus measures to support its economy as part of a bid to soften the impact of the coronavirus pandemic on livelihoods by creating nine million jobs and ensuring local governments can function. While the stimulus measures announced by Beijing are good news for the China economy and global economic recovery, an escalation in political tensions in Hong Kong, and between China and the US, risks undermining the current rebound we’re seeing in equity markets. Indeed, we saw this week that news of the large-scale fiscal stimulus package in China was overshadowed by Chinese authorities revealing plans for a new national security law in Hong Kong. That led to the Hang Seng index registering its worst trading day in five years, falling by 5.6 per cent.  

Hong Kong could be flashpoint in US-China stoush

Still on Hong Kong, there’s a risk is that the former British colony now becomes another source of conflict between China and the US as tensions escalate between the superpowers. Recently, US-China tensions have been rising amid recriminations about the coronavirus and renewed efforts by the US to stymie Huawei, a Chinese telecoms firm. Hong Kong could potentially be the next front in the White House’s aggressive approach to Beijing. If the trade war does restart with Hong Kong as a flashpoint, equities in Hong Kong and the rest of Asia are likely to suffer, while the renminbi will probably also come under pressure as occurred last year when the US imposed tariffs on Chinese goods. China’s ongoing encroachment on Hong Kong autonomy is also making it a less attractive place to do business, damaging its economy and undermining its role as a financial centre.  

US-China trade war could be here to stay

In any case, US-China tensions are likely to remain high for some time as it seems to serve leaders on both sides as a distraction from COVID-19 and resulting economic hardship. US President Donald Trump in particular seems to think the dispute can help him win re-election in November when Americans go to the polls. However, it’s unclear what Australian Prime Minister Scott Morrison is thinking as Australia, too, becomes caught up in the US-China flare-up, with a recent ban on beef exports and tariffs on barley exports to China. Thankfully, Australian iron ore and coal have been left alone so far, but it’ll become a major issue for Australia’s economic recovery if China makes our iron ore and/or coal less attractive with little effect on China, except higher pollution.  

Signs of emerging markets rally in wake of coronavirus

Looking elsewhere, MSCI’s World Index of developed market equities has risen by almost 30 per cent from its low on 23 March, recouping more than half its initial losses faster than in any previous bear market. Despite the scale of the current economic shock, the index is now trading around the same levels as in mid-2019, which is good news. However, even though lockdown measures are slowly being lifted in many countries, the latest global PMI survey data point to only limited signs of recovery in the global economy. At 30.5, the eurozone composite PMI is still consistent with economic activity contracting in May. It’s a similar story for the UK and the US. For equities, the aggregate composite PMI for the major developed economies, at face value, suggests equities should be lower than they are presently.  

Future PMI reports will be in spotlight

Nonetheless, the PMIs have at least improved in May and we are hopeful that Q2 will mark the trough in activity. Equity investors are obviously of a similar view. Looking ahead, assuming that the virus outbreak is slowly brought under control in the coming months  and economies gradually continue to re-open in that time, the rally in equities may have further to run. Bearing all this in mind, the strength of global equities may not be as irrational as it first appears based on incoming economic data.  
  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.
Click Frenzy 2020 is here. Earn Raiz Rewards on top of hot discounts!
Tis the season again folks - Click Frenzy starts 7pm, 19th of May 2020. Many of our Raiz Rewards partners are participating in this limited time online sale. That means you can get money reinvested into your Raiz account on top of the Click Frenzy deals. Here are just SOME of the best deals our Raiz Rewards partners are offering (more retailers to launch at 7pm on the do so be sure to check the app). Don't forget to login to your Raiz account via the mobile or web app then click the “SHOP ONLINE HERE” links so we can track your rewards. 2XU - 3.5% reinvested with 30% Off Almost Everything! Online only. Adairs - 4.2% reinvested with 25% off sitewide and Free Shipping plus Linen Lover's receive an extra 5% off Adore Beauty - Up to 4.2% reinvested with Save up to 20% on selected brands for 2 days only! ASICS - 7% reinvested with 25% off selected styles Bally - 7% until 20/5/20 reinvested. Enjoy up to 50% off the Bally™ Spring/Summer 2020 collection including shoes, accessories and ready-to-wear. Free shipping & returns. A limited-time offer bellabox - 17.5% reinvested with 20% off for 20 hours. Shop limited edition, shop items and new subscriptions. Delivered to your door 🤍 Use code: 2020VISION Ben Sherman - 4.2% reinvested with 40% off sitewide Best&Less - 3.% reinvested with 20% off sitewide, hurry 4 days only! Billini - 5.6% reinvested with 20% off everything BNKR - 6.3% until 21/5/20 reinvested with 30% off sitewide with code BNKRFRENZY (excluding Final Sale) Bonds - 5.6% reinvested with up to 80% off. Over 1,000 styles to choose from. Boohoo - 5.6% until 20/5/20 reinvested with SHOPPING FRENZY 50% off EVERYTHING (excl. sale) Bras N Things - Up to 3.78% reinvested with 20% off Sitewide with code FRENZY20 - Only for 3 Days! CAT Workwear - 5.6% reinvested with 20% off sale items Catch.com.au - Up to 2.8% reinvested with Click Frenzy Mayhem Save 50-90%. Charles Tyrwhitt - 5.6% reinvested with 3 Shirts for $149 with code FRENZY City Beach - 6.3% reinvested with Frenzy Sale - Up to 70% OFF! Clarks - 7% reinvested with 30 - 70% off sitewide. Coach - 4.2% reinvested with up to 50% off select styles Cotton On - Up to 6.3% reinvested 30-50% off sitewide ECCO - 4.9% reinvested with 20% off sitewide at ECCO, with brand new boots and sneakers online now. ECHT - 7% reinvested with 20% Off sitewide Forever New - 4.2% reinvested with a further 40% Off Sale Items with coupon code TAF40. Fossil - 5.6% reinvested with 20% off everything with code MAYHEM20 General Pants - 2.8% reinvested with 30% OFF* Storewide! Enter FRENZY30 at checkout. Ends 21/5/20 T&Cs Apply. Glassons - 5.6% reinvested with 20% off sitewide Hallenstein Brothers - 5.6% reinvested with 25% off sitewide including sale Harris Scarfe - 3.5% reinvested with 50% off all Homewares & Manchester. Excludes Electrical & HS Everyday. 40% off all Men’s & Women’s Underwear, Sleepwear, Sporting & Footwear. Excludes HS Everyday. 40% off Men’s & Women’s clothing. Excludes HS Everyday" HP - 2.5% reinvested with 20%* on selected HP laptops + loads more HOT deals across HP accessories, desktops, OMEN, and refurbished products! Hype DC - Up to 3.5% reinvested with 20% off sitewide Jo Mercer - 4.2% reinvested with 25% off sitewide Johnny Bigg - Up to 4.9% reinvested with 40% Off* Sitewide + Free Shipping. Kogan - 1.26% first purchase reinvested with the Kogan "Frenzy" offers Lacoste - 5.6% until 20/5/20 reinvested with up to 50% off sitewide Lee - 5.6% until 21/5/20 reinvested with up to 50% off select items Lorna Jane - 3.5% reinvested with 20% OFF Full Price Jackets & Hoodies, Lornajane.com.au. Discount applied at cart, 24hrs only. Nasty Gal - 5.6% reinvested with FASHION FRENZY 60% Off everything inc sale. Nautica - 4.2% reinvested with 40% off sitewide New Balance - 4.2% reinvested with Receive 40% off all Full Priced Items at New Balance when you use code MAYHEM40 Nine West - 4.2% reinvested with Take 30% Off Full Priced Styles - Applies At Checkout To Full Priced Styles Peppermayo - 7% reinvested with 30% off sitewide Platypus AU - Up to 5.6% reinvested with 20% off sitewide Review - 5.25% reinvested with 30% off storewide. Excludes outlet styles. Discount applied at checkout. Riders by Lee - 5.6% until 21/5/20 reinvested with up to 50% off select items Saucony - 5.6% reinvested with 20% off sitewide Skechers AU - Up to 5.6% reinvested with 20% off sitewide Speedo - 4% reinvested with a further 20% off Sale items Stylerunner - 5.6% reinvested with Stylerunner Fit Frenzy Sale - Up to 30% Off Superdry - 4.9% reinvested with 20-60% Off Sitewide! THE ICONIC - 3.5% invested with 30% off selected sport and fashion styles. The North Face - 4.2% reinvested with Sale Frenzy - Up to 30% off select new season styles Timberland - 5.6% reinvested with 20% off sitewide Tony Bianco - 7% reinvested with 30% Off Storewide at Tony Bianco. UGG - 5.6% reinvested with up to 50% Off | New markdowns added Under Armour - 5.6% reinvested with 30% Off Sitewide, including outlet. Excludes: Rock SS20, Technology, Curry Men's, Golf, Selected Sonic, Selected Phantom SE Witchery - 3.15% reinvested with 20% off Almost Everything. Wrangler - 5.6% reinvested with 30% off sitewide *Please refer to all T&Cs including promo codes and time periods for each individual offer on the Click Frenzy or retailer’s website.   [caption id="attachment_6147" align="aligncenter" width="394"]open app Click here to start shopping[/caption]
Markets continue rapid rebound as restrictions ease
Raiz Market Insights

12-05-20

From George Lucas, Raiz CEO

 

Making sense of rising equities despite COVID-19

Last week global equities continued their rapid rebound despite the COVID-19 pandemic and dismal news on the state of the global economy. While equities plunged after coronavirus hit in February, the US equity market as measured by the S&P 500 has risen by almost 30 per cent from its intraday low on 23rd March and is now trading around the same levels as in mid-2019.  Other global markets have also recovered but not as quickly as the S&P 500. The worst is likely yet to come in terms of the economic data, but so far, bad data has not stopped the equity markets globally, from rallying.  

Investors confident of quick economic recovery

Two key factors appear to underpin this rally in equities. The first is that investors are looking through the bleak near-term outlook and focusing on the prospect of a quick economic recovery in the second half of the year, once the pandemic is brought more under control. The second factor is the massive fiscal and monetary policy response to the virus-induced economic shock. Central banks, led by the US Federal Reserve, have gone to extraordinary lengths to backstop the financial system and shore up asset markets. The fiscal support packages put in place by most major countries, as well, are far larger than anything seen before in peacetime. More importantly, expectations that monetary policy will be kept extremely loose for years to come have boosted equity prices. However, key downside risks remain as nations move into the recovery stage, including secondary virus outbreaks as economies reopen, a long U-shaped recovery, or a breakdown in the consensus for maintaining policy support both fiscal and/or monetary policy support.  

Underperformance in emerging markets

One feature of the recent rally has been the underperformance of equities in emerging markets relative to those in developed markets. One big reason for the underperformance of emerging markets equities has been the collapse in commodity prices, with the GSCI’s index of industrial metals has dropped by 10 per cent over this period. The fall in commodity prices has hit EM equities disproportionally. The underperformance of emerging markets equities has also coincided with the number of coronavirus cases rising more sharply in emerging markets than developed markets since mid-March. Another factor has been the relentless outperformance of US equities, which has been driven by the five largest listed stocks, mainly in Tech, in the US.  

US-China trade war at risk of flare-up

Last week also saw signs of a re-escalation in trade tensions between the US and China led by President Trump when he said that he was “watching closely” to see if China was living up to trade-deal commitments to purchase large quantities of US goods. President Trump seems to view putting pressure on China as a vital part of his strategy ahead of November’s election. With his approval rating now standing at just 43 per cent, it is likely that tensions with China could remain high, at least until the US election is over. For equities, if the previous trade war is anything to go by, another stoush would benefit equites in the US while hitting those in China and the rest of emerging markets.  
  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.
April 2020
Economic impacts of COVID-19 becoming clearer
Raiz market and economic update

27-04-20

From George Lucas, Raiz CEO

 

Economic impacts of COVID-19 becoming clearer

The world remains gripped by the COVID-19 crisis as the economic impact of government lockdowns globally are becoming clearer. Equity markets, which look 12 to 18 months ahead, are currently anticipating a swift recovery, while the economic data illustrates the significant impact to global unemployment and growth in the last few months. GDP in China fell by 6.8 per cent year-on-year in the first quarter of 2020 -- the first quarterly contraction since records began there in 1992. On a sector-by-sector basis, hospitality, retail and construction contracted at a double-digit pace, while IT and finance continued to grow. In the US, a negative sign for the global superpower’s economy was the market price of WTI crude oil, which turned negative last week for the first time in history. This was caused by very weak demand and nowhere to store the excess oil.  

Employment around the world falls

On the jobs front in the US, there was a further decline in initial US jobless claims to 4,427,000 last week. The data is consistent with the official jobless rate nearing 20 per cent in April. The jobs data coming out of the US is consistent with GDP declining at a 12 per cent annualised pace. In Australia, the unemployment rate will likely jump as a result of job losses due to COVID-19 lockdown. However, the federal government’s JobKeeper program will muddy the official jobless rate in Australia, which Treasury forecasts may nearly double from 5.1 per cent to 10 per cent by June. While the jobs market is deteriorating, panic buying of groceries and toilet paper in Australia resulted in a massive 8.2 per cent month-on-month jump in retail sales in March. In Germany, the IFO Business Climate Index fell to a record low in April, pointing to a very sharp drop in GDP. The German economy will hold up a little better than the eurozone average this year, but it still looks set to contract by about 8 per cent over the year.  

Looking forward

The equity markets have priced in the recent bad economic data well, rallying significantly off their lows. The rate of recovery in the global economy will be closely watched by the markets as restrictions are slowly removed. The equity markets may be able to continue to rally if the global economy’s recovery is swift enough to satisfy the market. However, for the next few months expect to see economic data which is exceptionally poor.  
  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.
Raiz Quarterly Update from George Lucas, Managing Director/CEO
raiz quarterly update On 23 January 2020, when I gave my last update, the world was a very different place. Although COVID-19 (coronavirus) was gaining public attention, it certainly wasn’t a global health crisis affecting economic growth and investor sentiment around the world. Today, Australia has been in lockdown for nearly a month and social isolation is the name of the game. Large sectors of the economy (notably tourism, hospitality, and much of retail) are closed for business and others are suffering. We remain primarily concerned for the health, safety and wellbeing of our customers and staff during this period. At Raiz we are weathering this difficult period.  We will soon report revenue from our Micro Investing Platform, that grew in the March quarter as we continue to increase the number of customers and activity on our platform. Our business, which derives about two-thirds of its revenue from the $2.50 management fee, continues to retain the loyalty of our valued customers, and also add new customers. At 31 March 2020 we had 215,398 customers, up from 211,657 at 31 December 2019, despite the uncertainties caused by the Government lockdown. For this outcome we can only offer you our sincere thanks. The team and I will work hard to meet your expectations and assist you in taking control of your finances in these difficult times. That we can retain and increase customers during this quarter tells me a few things. Firstly, that the products and services we offer, and the customer service that accompanies them, still meet your expectations, even during this crisis. Customers are aware of the need for a robust savings plan to assist them in controlling their finances. Rest assured we will continue to maintain the high level of service that you have come to expect. And continue to listen to your feedback to enhance our product offering and services. Secondly, our customers are increasingly appreciating that investing can be a long-term game, and that despite the current volatility they understand the need to stay in the market, realising this crash may be the precursor of the next bull market. Finally, that you understand that even during this extremely challenging period, Raiz’s financial management, rising revenues and the capital raised in December last year has put the business in a secure position that bodes well for its corporate future. This gives us a much-needed financial cushion in these troubled times. Raiz entered the market to offer Australians, especially young Australians, a smart alternative to the established players in the financial services sector by putting control of their financial futures into the palms of their hands. The current crisis has not changed that. So, during these uncertain times your ongoing commitment to savings and controlling your finances via Raiz is deeply humbling and a very promising sign for all our futures. Again, my heart-felt thanks, and stay safe.   Sincerely, George Lucas Managing Director /CEO  
  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.
What does liquidity mean?
water droplet rippleIf you’re starting out as an investor you may have heard about something called “liquidity”, but you may not be exactly sure what it is or what the term refers to. That’s totally understandable as there are lots of concepts to come to grips with when you’re getting investing and it takes time to figure them all out. The concept of liquidity is an important one to understand because in the context of financial markets it affects many aspects of how markets operate.  

What is liquidity?

Simply put, liquidity refers to how easily an asset or security, such as shares, can be bought or sold in the market at a price reflecting its true worth, or in other words, its intrinsic value. In a practical sense, this means that liquidity can be thought of as how easy it is to convert an asset to cash, which is considered the most liquid asset of all. Assets can be placed on a scale from liquid to illiquid, depending on how easily they can be converted to cash. So-called tangible assets, like collectibles (cars, rare books etc) property and fine art, are considered relatively illiquid, while stocks are considered rather liquid. Meanwhile, the liquidity of other assets such as contracts, currencies, commodities and derivatives commonly depends on how many players are in the market, their size and the amount of assets listed.  

Characteristics of a liquid asset

Cash is considered the most liquid asset as it can be exchanged for goods and services instantly with no loss of value. In other words, you don’t have to wait for a suitable buyer of the cash and it can instantaneously be used to do things like selling, buying or paying down debt. This contrasts with an illiquid asset that’s tough to sell unless you drop the price significantly. This could be to a lack of market actors (buyers and sellers) or to scepticism about the asset’s underlying value.  

What’s market liquidity?

So, we’ve covered liquidity generally, but what about liquidity as it relates to the share market, or other financial markets. This is what’s generally known as market liquidity and it refers to how easy or hard it is for assets in a particular market to be bought and sold at stable prices reflective of true value. The stock market is generally characterised by higher market liquidity meaning that, unless it is uncharacteristically dominated by selling, the bid price (the price a buyer offers per share) and the ask price (the price the seller is willing to accept) will be pretty close. One of the advantages of
ETFs is their liquidity.  

Watch out for illiquid markets

Liquid markets are usually a good thing. High levels of liquidity occur when there is a lot of trading activity and both high supply and demand for an asset, leading to less risk. But even in share markets, remember that some shares trade more actively than others on, meaning there is more of a market for them and they are more liquid than other, less traded, stocks. By contrast, in an illiquid market, there may be only a few market participants and trading is infrequent, meaning that they carry higher risks. This is known as liquidity risk and becomes more prominent during times of market turmoil when holders of illiquid assets may find it hard to sell without losing a substantial amount of money. The most widely known illiquid investments include hedge funds, property, private equity and infrastructure, and investing in these types of assets is usually not done by newbies.  
 

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Download it for free in the App store or the Webapp below:
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  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.
Global COVID-19 stimulus dwarfs GFC response
Raiz market and economic update 14-04-20 From George Lucas, Raiz CEO  

Global COVID-19 emergency rolls on

This week COVID-19 continued to cause upheaval across the globe. In the US, another $2.3 trillion was added to stimulus measures aimed at softening the virus’ impact on the US economy. This time, the focus of the stimulus was corporates, giving the US Federal Reserve more fire power in buying up US corporate debt. Asian markets reacted well to this new stimulus. More broadly, the size of the stimulus packages coming out of the US, Europe, UK and Australia dwarf the stimulus packages that were rolled out during the global financial crisis and indicate how significant the economic effect of COVID-19 will be on output and unemployment worldwide.  

Stocks rally despite coronavirus pandemic

The unprecedented global impact of COVID-19 makes last week’s rebound in equity markets so surprising. On the plus side, the rally partly reflects hopes that the peak in pandemic may be close. On the other hand, large increases in equity prices are quite common after major corrections. In short, it’s hard to read much into the rally. That’s because it’s difficult to determine how much economic bad news is currently priced into the market given the unprecedented fiscal stimulus currently propping up the global economy. Indeed, governments themselves are finding it hard to forecast the pandemic’s economic impact as the multiple rounds of stimulus being rolled out makes clear. Governments around the world are all playing catch up with COVID-19 at the moment.  

When will the global economy recover?

Ultimately, COVID-19’s full economic impact will become clearer when social-distancing restrictions are wound back and business starts to get back to normal. It’s hard to predict when this will be. Air travel provides a case in point. With airlines grounded due to COVID-19, the International Air Transport Association (IATA) has projected a possible hit to worldwide revenues of up to $113bn this year – 20 per cent of 2019’s total revenues. It’s far from certain when things will return to normal. However, what is clear is that air travel will not return to anything resembling business as usual until a vaccine is readily available in 12 to 18 months’ time. Until that point, this will have flow-on effects for domestic airlines, hotels, restaurants, bars and any tourist related industry linked to international air travel.  

Govts need to get COVID-19 response right

With so much uncertainty, the recent market rebound relies on the belief that governments are getting it right with their stimulus packages. That’s what largely occurred during the GFC. But there’s no guarantee they are getting it right. This economic downturn is not a financial crisis, but a shut down in consumer ability to buy and travel.  
  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.
The difference between 'real' and 'paper' profit/loss
Star Trek Action Figures"Live long and prosper" are the words often spoken by Star Trek’s fictional character Spock, the half human, half Vulcan science officer aboard the USS Enterprise. Now you may be wondering why we’re mentioning Star Trek in this blog article. Could it be that Spock’s words are somewhat poetic in these crazy times of pandemics and bear markets that we find ourselves in? Is it because as a species, Vulcans have perfected the art of suppressing emotions, and maybe we all need to be a little more ‘Vulcan like’ to keep a steady nerve as we watch our investment balances decline? Well yes, both of those are good reasons, but we mentioned Star Trek because one of the most endearing qualities of that TV show is its ability to frame its episodes in an allegory. Telling stories, which upon reflection, can readily illustrate and convey a complex concept in a more comprehensible way to the viewer. Now for a moment, come on a journey with us. Let us take you back in time to about 18 months ago. A time when the Australian housing market bubble had ‘burst’.  

The housing market 'burst'

Can you remember the influx of real estate that came onto the market? Owners that were falling over themselves to put their properties up for sale? No, we don't remember that happening either! Obviously, some people had no choice to sell, but as evidenced by the lack of properties for sale and the mass crowds of bargain hunter investors at every open house at the time, most owners had no intention of selling. First time home buyers and property investors saw it as an opportunity to buy at a "bargain price" but choice was limited as owners chose to simply wait it out and hope for the housing market to improve. Fast forward 12 months and sure enough most major cities were reporting modest property price increases. If you were fortunate enough to own a property during that time and did not sell it, in real terms how much did you lose when the bubble burst? Well the answer is nothing. After all, it was only the current market value of your real estate that had changed, and you still owned the original investment. Therefore, the current market price is only ‘relevant’ if you want, or need, to sell your investment. The example of the property market can equally be applied to other types of investments.  

Applying this example to Raiz

When you make a deposit into Raiz, that money is fully invested into
Exchange Traded Funds (ETFs) which are effectively baskets of shares that are traded on the ASX. You own ‘units’ in these ETFs, and depending on your portfolio choice, your portfolio is made up of either 4 or 7 different ETFs. The balance you see within your Raiz account is the current market value of all the units you own as part of your portfolio, and at no time is cash held as part of your balance. In reality, the price of units in each of the ETFs will have a different current market price, but to simplify things, let’s just assume there is one unit price for a moment. Say for example, you decided to invest $100, and the current unit price is $0.50. When you make that investment, your $100 would buy you 200 units. Now say that unfortunately there is a downturn in the market, and the unit value is now only $0.40. Your 200 units would now have an investment balance of $80. So, you have lost $20, yes? Well, yes and no! You see, you still have 200 units, like you still had your real estate investment in the example above. You only really lose $20 if you sell your units because at this point in time their value is currently less than it was when you bought them. However, if you don’t sell you still have the 200 units, and you have not realised the loss. Keep in mind that the reverse is also true. If the market has an upturn, and the unit value is now $0.60, your 200 units would now have an investment balance of $120, so you are in profit by $20. Well again, that is only true if you sell, because from an investment perspective you still only have 200 units – and markets go up and down! Sometimes we refer to this $20 profit or $20 loss as a 'paper gain/loss' because it does not become real until you sell. Every time you put money into Raiz, you are buying units, and every time you request a withdrawal you are selling units. It is only when you sell an investment that you ‘crystallise’ the profit or loss from having owned it. It’s good to remember that when it comes to investing, there are only two key points in the whole investment cycle that really matter. The price you paid at the time that you bought the investment, and the price you get when you decide to sell it. At the end of the day, every price your investment is "worth" between those two points is effectively just noise and is just a part of the roller-coaster ride of investing, which inevitably has highs and lows along the way. Peace and long life. 🖖  
 

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  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.
March 2020
Governments globally ramp up response to pandemic
Raiz market and economic update 30-03-20 From George Lucas, Raiz CEO  

Governments globally ramp up response to pandemic

Over the last week we have witnessed the roll-out of government stimulus packages around the world aimed at supporting the global economy amid the COVID-19 pandemic. Health impacts aside, governments are currently facing an economic emergency larger than the 2008 global financial crisis. Unlike that crisis, where banks stop dealing with other banks, COVID-19 has caused corporates to stop dealing with other corporates in a large and unexpected way. Given the gravity of the crisis, government responses have been both on the fiscal and monetary sides, with the fiscal policies being slower to be enacted as some have been delayed by politics of the day.  

Trump approves US$2 trillion stimulus package

In the US, President Donald Trump signed the largest stimulus package in that nation’s history, approving a US$2 trillion bill intended to buoy the coronavirus-hit economy where the number of cases continues to rise. Despite the package, worth over 10 per cent of their GDP, it will not be enough to stop a sharp fall in US economic growth in coming months as the restrictions being imposed mean that fewer people will be on the streets buying essentials items or spending on entertainment or luxury goods. On the monetary policy side, the US Federal Reserve also announced unlimited support for the US treasury market and the purchase of corporate bonds.  This too is their largest response to an emergency.  

Australia announces major stimulus packages

In Australia, it’s a similar situation as the federal government tries to insulate the domestic economy from the worst impacts of the pandemic. The Morrison Government has announced two major stimulus packages, worth around AUD$189 billion. In total, the Australian stimulus package is in line with other global governments -- almost 10 per cent of GDP -- and there will be more to come aimed at ensuring businesses can resume trade quickly and re-employ workers when the crisis resolves. Elsewhere, Japan is also planning a stimulus package of around 10 per cent of GDP with details yet to be finalised. This is the same in Europe where nations are still working through the politics.  

The global economy

Globally, the biggest problem faced by all economies is that while coronavirus restrictions remain in place people are not doing business with shops, shops are not doing business with suppliers, and suppliers are not doing business with other companies. This is known as the velocity of money, which describes the rate at which money is exchanged in an economy. The challenge right now is that the velocity of money in economies worldwide has fallen off a cliff and will not come back until the restrictions are removed. So, despite fiscal and monetary stimulus, we all must prepare for a drop in GDP over the coming months due to layoffs, huge reductions in revenue for companies, and the shutting down of many companies. Stimulus plans, both monetary and fiscal, take time to work and stabilise markets. It is not an instant cure. Although it may not be until next week, or next month, that they begin to work, governments are now in the process of doing all they can to ensure that the global economy can weather the current crisis, and recover as quickly as possible when it ends.  
  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.
Quiz Question of the Month!
 
  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.
Terms & Conditions for entering our Quiz of the Month Competition
  1. An active Raiz Invest Account must be held (account balance greater than $5). Raiz account holders hold valid accounts as set out in the product disclosure statement found on the website: raizinvest.com.au
  2. To enter, you must click or tap through (via desktop or mobile) one of the answers from the “Chance to WIN – Quiz of the Month” email to the Quiz of the Month Blog page. This will allow us to automatically put your email in the draw. You must be subscribed to emails to receive this.
  3. Entries open Sunday 29th March 2020 at 2pm and entries close Thursday 30th April 2020 at 11.59pm. This may be changed at Raiz’s discretion.
  4. Raiz Invest will be giving away twenty copies of the book 'Making Money Made Simple', authored by Noel Whittaker. These twenty winners will be selected at random. We note that no individual prize exceeds $250.00 and total value of prizes do not exceed $50,000.00.
  5. These twenty random Raiz Account holders will be notified by email within two weeks of competition end date to confirm their delivery address.
  6. The permit number in the format NSW Permit No. LTPM/18/03853.
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  9. The competition is promoted by Raiz Invest Australia Limited, Level 11/2 Bulletin Place Sydney 2000 NSW, 1300 754 748. ABN 26 604 402 815, who is the Authorised Representative of AFSL 434776. The Raiz product is issued in Australia by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) and promoted by Raiz Invest Australia Limited (ACN 604 402 815). A Product Disclosure Statement dated 16 December 2019 for this product is available on the Raiz website and App. A person should read and consider the Product Disclosure Statement in deciding whether or not to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.
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Market volatility can be infectious
Inter-connected ropes 23-03-20 From George Lucas, Raiz CEO I have been frequently asked in recent days how long this market volatility will last. The past two weeks have seen extreme volatility in equity markets, with moves (up and down) of up to 7% a day (and greater) compared with last year when a 1.5% move would have captured newspaper headlines. Now, if the market only moves 2% or 3%, it’s no longer newsworthy. Make no mistake. If the current market volatility is not unprecedented, it’s rarely seen on this scale.  But it has happened before. It’s not just equity markets. Market volatility can be highly infectious. Although most commentary has understandably been about the share market, it’s worth noting that this extreme volatility started in the oil market. Two weeks ago, Russia and Saudi Arabia shocked markets globally when they could not agree on production cuts to help prop up prices, prompting Saudi Arabia, the world’s largest producer, to flood production, causing a huge decline in the price of oil. So, at the very time the global economy is slumping in the wake of COVID-19, two major oil producers flood the market. The inevitable result saw the oil prices crash 30% in a day, sparking market volatility not only in equities, but in the currency and fixed income markets too. In the foreign exchange (FX) market, the Aussie dollar last week fell as low as 55 cents against the greenback (US dollar) before rallying to close on Friday at around 58 cents. These are large moves for our currency. In the three-year Australian Government bond market, yields on this government debt last week started at 0.85%, rallied up to as high as 1.60% and has fallen back by the end of last week to about 1.15%. Certainly, this is not my first rodeo. I’ve been riding these extreme market selloffs and volatility events since the 1987 share market crash, so I know there’s no short-term remedy and it takes time for markets to calm again. Like everyone else, I wish there was a short-term fix. That said, experience also tells me that the markets will recover in the long-term, that the record share market high of 20 February 2020 will be overtaken. I just don’t know when. [caption id="attachment_5990" align="aligncenter" width="640"]All ordinaries index since 1987 Source: Bloomberg[/caption] In what feels like unprecedented days, it’s worth reminding ourselves that other upheavals, global wars, September 11, even pandemics, such as the 1918-19 Spanish flu outbreak, has never stopped economic activity picking up and markets recovering. As Douglas Adams (Hitchhiker’s Guide to the Galaxy) tells us, “don’t panic”. For many, this will not be the last market meltdown in your lifetime. Although, if you have a long-term plan that involves investing small amounts regularly, then you are on the right track. Right now, I know it’s hard to focus on the long-term when the immediate future looks so bleak. And it’s easy for me to write about how you should stick to your investment/savings. I know it’s hard to execute at the moment, but I firmly believe that if you do, it will be worth it in the long run.  
  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.
How does COVID-19 affect markets?
On 20 February, the bellwether ASX200 index closed at 7162 – a record high. On the 19th of March , its close at 4747 points represented a drop of 2415 points or 33.7% from this high point. To state the obvious, the actual and potential economic impact of COVID-19 (coronavirus), globally and locally, has markets spooked. It’s the very unknowns about this virus, when coupled with the fact there is no vaccine, and lack of clear global government action, that is fuelling public anxiety and investor panic. In this volatile investment environment, investors need to take a deep breath and hold their nerve. Like all crises that afflict the markets, such as the Global Financial Crisis, the dot.com crash, or the Black Monday 1987 crash (Tuesday in Australia), it will pass, and markets will recover. [caption id="attachment_5990" align="aligncenter" width="640"]All ordinaries index since 1987 Source: Bloomberg. Data accurate as at 13-03-20[/caption] Many of the companies listed on the stock exchange have sound fundamentals that will not be significantly impacted by COVID-19. Companies that are well-managed, hold cash reserves, have revenue streams largely immune to the economic fallout from COVID-19 and with strong growth prospects had those qualities on 20 February – and still have them today. In fact, there will be companies that could benefit from the changes in consumer behaviour due to the virus. At Raiz, we completed a capital raise in December 2019, so have a strong cash position and are well funded. Our flat monthly fee model means our revenue stream is largely immune to the market fallout. The systems and processes we have put in place at Raiz would allow us to serve our users even if there were a Government decision to effectively lock down the country. We have taken all possible steps to ensure the business can operate normally with all staff capable of working remotely to maintain the highest level of service. None of this is to minimise what is happening, or the real economic consequences it’s having and the hardship it could cause to employees in certain sectors such as hospitality or tourism. Indeed, what is happening is a reminder that humans are not invincible, and that a microbe can have a huge impact on the world we live in. Markets, unfortunately, do fall when such uncertainty takes place – sometimes sharply - and the worst possible response is a knee jerk reaction. Investment is a long-term game, and the events of recent weeks are a sober reminder of this. Remember, investing small amounts regularly, over time, consistently, and no matter the market conditions, could help you gain financial experience and build a savings base.  
  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.
Coronavirus continues to disrupt markets
Person walking through hills
From George Lucas, Raiz CEO/Managing Director
  The disruption to the markets and our lives has continued due to the spreading global coronavirus outbreak. The Australian equity market and the Australian dollar are not holding up well as the impacts of the virus are felt globally. Oil prices have also fallen dramatically as Saudi Arabia and Russia were unable to come up with a deal to support oil prices. Oil prices had already been falling due to expectations of slower global growth caused by the coronavirus. I have no idea when the threat will end, but it now appears far from a short-term event, with the markets yet to be convinced that the stimulus and actions from governments will be enough to offset the spread of the virus and the economic issues it is causing. Despite growing fear, it is unlikely that the virus will bring the world to a standstill as it seems to have mild effects on most infected people while having the most impact on the elderly. The 1918 Spanish flu, which was far more deadly, also failed to bring the world to a standstill. Even so, given the fear around coronavirus, or COVID-19 as it is also known, people and markets are currently not acting rationally. Which is not surprising based on the number of unknowns. Indeed, the recent rush on toilet paper at supermarkets across Australia is a good illustration of how irrational people can become when mass fear sets in. When it comes to the markets, it should be noted that given the strong global market rally over the last few years without a correction, especially in the US, a correction was going to occur at some point. The coronavirus and the short-term effects on the global economy has been the catalyst for this correction. Given the current irrationality of the markets, it’s my view that long-term investors are best served sticking to their investment strategy. Specifically, I believe that the Raiz philosophy of investing small amounts regularly is the best way to go to assist in managing the current uncertainties associated with the markets.  

Long term coronavirus impact still unclear

On the outlook, there is currently no vaccine for the virus, and it is unlikely that one will be available for at least 12 months. However, looking further ahead, the virus is likely to have significant long-term effects on our behaviour and communities. The Spanish flu, for instance, had a large impact on social justice in the Western world and eventually led to socialised medicine, paid sick leave and many other benefits for communities now seen as unquestionable rights in many countries across the globe. Going forward, while the long-term impacts of the coronavirus are yet to be seen, it’s likely to affect the way we save, invest, travel and our approach to social justice for many years to come. I wish I had more insight into the short-term effects on markets. I understand that it’s easier to talk the talk about sticking to a philosophy of regular investing, but harder to walk to walk when it is your own money and markets are falling. I do however know that in the long-term the markets will recover, but I just can’t say when and how quickly.  

 
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.
How to navigate your emotions when markets make you uneasy
women staring at lake In recent weeks, the stock market has had large fluctuations in response to the coronavirus outbreak. Corrections in the market are common, and historically, downturns have ended in upturns. It can help to take the long view; this episode will pass, even if it’s impossible to know exactly when. However, when it is your own money there is no doubt that this jolt is painful. How do you navigate your emotions when you’re seeing your position jump up and down so frequently? Here are 3 tips for staying the course during stock market fluctuations.  

1. Understand the source of your uneasiness

The first step to ease those nerves is to ask yourself a few questions. “When you start investing in the market, it’s generally to build wealth in service of a goal. What is that goal? Are you afraid that you won’t have the money to meet a need? What is that particular need?” You should keep in mind, ‘What’s your goal?’ and ‘What’s the timing of that goal’. If you don’t need the funds in the short term, then you may be able to afford riding out the downturn and waiting for the upswing. You could think ’Yeah, I’m seeing the total market value of my portfolio go down at the moment, but actually, I still hold the same number of shares and their value should go back up in the long run.” Another question you could ask yourself is, “Are you worried in response to the fact that other people seem worried? If not, what are you responding to?” It could be that constant updates about the news cycle are feeding your fears in an unhelpful way. Maybe the solution could be as simple as tuning out from the headlines for a little while.  

2. Stay informed, but don’t read every headline

For a lot of people, having the right information can bring on a sense of comfort. Having a better understanding of what the market is doing and why, might affect your feelings about any sudden highs or lows. Still, there’s a difference between staying informed and following every breaking news alert. You may benefit from waiting for the market to stabilize and not letting your news feed dictate your emotional experience or your actions. The same goes for your portfolio: Though it’s smart to monitor it, try not to check it too often.  

3. Pause for 24 hours before making any big decisions

If the market’s moves have made you consider pulling out of the market altogether, you’re not alone and it is totally understandable. One strategy to keep you from acting impulsively is to institute a waiting period for yourself when you want to make these kinds of choices. Take a pause and see if you can wait 24 hours before making any kind of long-term decision, and then evaluate if you still feel that same intensity to act 24 hours later. Implementing a waiting period can be a way of creating a boundary, so that you’re acknowledging your emotions, but still being systematic about the actions that you’re taking. It is hard. It can be sensible to take some time to reflect on what is making you feel uneasy. You don’t want to create a cause and effect relationship between your emotion and the market’s volatility. Emotions are valid, but you can recognize them without putting them in control.  
 

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Download it for free in the App store or the Webapp below:
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  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.
How the stock market has recovered after past downturns
roller coaster Market figures accurate as of 02/03/2020   When investing, it’s important to keep the big picture in mind. Even after a 10% drop in the last week of February, the ASX 200 Total Returns Index is still up 113% over the past 10 years. However, we know it is difficult when it’s your own money, and seeing the big picture is not always easy as your goals may not be long term. When stock prices are plunging over a matter of days, it can test anyone’s resolve. But periods of turbulence can be good for long-term investors. For long term investors, sometimes the best advice is: “Buy stocks.”  

The market has always bounced back

While the ASX 200 Total Returns Index is down 3% this year, it’s still up almost 9% in the past 12 months, and a solid 35% in the past five years. This is substantial when compared to interest rates. For old experienced investors, who have lived through many stock market corrections, a 3% decline in one day is just a blip; stock market corrections happen. [caption id="attachment_5944" align="aligncenter" width="640"]ASX 200 Total Returns Index over the past 10 years  [/caption] Now coronavirus is front and centre. Something else will be front and centre six months from now and a year from now and two years from now. Rather than trying to predict that market’s moves in the short term, investors can be better off by remaining disciplined and sticking to their strategy. The market is correcting for more reasons than the coronavirus. Another driving factor in this correction is the strong rally we have had in the market over the last 12 months.  That is why the market is still up almost 9% over the last 12 months. The 20- and 30-year outlook for markets is not changed by the coronavirus.  

How to take advantage of market dips

Given that the market will eventually bounce back, there is the potential to seize the opportunity and buy more when prices are lower. You can take advantage of these declines in two ways: by dollar-cost averaging and by lump-sum investing. With
dollar-cost averaging, you regularly add money to your portfolio over time. The automatic features of Raiz; Round-Ups and Recurring investments, ensure that you buy at a variety of prices, regardless of whether the market is tumbling or soaring. That is, you will invest small amounts of money on a regular basis. Doing so simplifies the investing process, removes the temptation to try to time the market by predicting when prices will be higher or lower, and can help manage risk for long term investors. With lump-sum investing, you take a more tactical approach, which is also usually driven by emotion. If you see that the market has fallen by a certain amount, you’ll dive in with money you’ve been saving up for this exact purpose. For example, if you receive a tax refund, a smart way to use that money is to invest it in the market. The goal here is to buy at the lowest possible price. The same logic applies for withdrawing your money in a lumpsum, it is a tactical approach, usually driven by emotion rather than sticking to your investment saving strategy. Research shows dollar-cost averaging minimises the potential for regret. And it’s rare that most people have the skill to make timing a lump-sum investment attractive.  It is all about time in the market not timing the market. “Successful investing takes time, discipline and patience.” – Warren Buffett  
  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.
February 2020
Coronavirus impact on Aus economy unclear
Raiz market and economic update 25/02/20 From George Lucas, Raiz CEO   

Soft Aussie jobs data hits AUD

This week saw the Australian dollar hit its lowest level against the US dollar since March 2009, while the yield of Australia’s 10-year government bonds fell below 1 per cent on Thursday. The trigger for the slide in the local currency appears to have been weak jobs data, which showed the unemployment rate climbing to 5.3 per cent in January, up from 5.1 per cent in the previous month. However, it should be noted that the jobless rate rose because more people were looking for work, not because jobs were being cut, with total employment rising by 13,500.

 

RBA keeping close eye on labour market

Given the recent fall in the AUD, it’s unlikely that the Reserve Bank of Australia (RBA) will loosen monetary policy any further from its historically low level of 0.75 per cent. However, given the uptick in the unemployment rate, RBA Governor Philip Lowe will be keeping a close eye on the labour market after flagging that an unemployment rate trending higher could justify another rate cut.  January’s increase does not signify a trend yet. The RBA, in its considerations, would also be monitoring inflation as well as the effect on the economy of the sharp fall in the AUD this year.  This cannot be measured in one month of data.  

Coronavirus impact on Aus economy unclear

Turning to the global coronavirus emergency,  experts are warning that the spread of the virus is outpacing efforts to contain it, with recent notable outbreaks in Italy and South Korea. Regarding the virus’ impact on the Australian economy, the effect will depend on how quickly it is brought under control worldwide and especially in China, which is the epicentre of the emergency. That’s because Australia is exposed to both a sharp fall in Chinese tourism spending and prolonged factory closures in China flowing from efforts to contain the coronavirus. I believe that the effect of the coronavirus may be short lived and in the near future we could see a rebound in the Australian dollar, but unfortunately also in inflation.  

Bushfires likely to dent economic growth

While the impact of the coronavirus on Australia is still to play out,  the adverse impact of the recent bushfire emergency on growth will likely see the economy contract by 0.1 per cent this quarter. Looking ahead, the news is better as we will see the bushfires add to the growth of the Australian economy in the next 36 months as the country begins to rebuild after the crisis.  

Big 5 tech companies driving US stocks higher

In the US, the shares of the five big US tech firms -- Facebook, Amazon, Apple, Microsoft and Alphabet -- have done a lot of the heavy lifting in seeing the US stock market rise to a record high. This begs the question, should we be concerned about a tech bubble? There are some obvious differences between today and the 1990s, with most of the modern tech stars hugely profitable. However, the combined price/earnings ratio of the tech titans is now 60 per cent higher than that of the rest of the market, with tech stocks also the “most crowded trade” across global markets.  

Rapid earnings growth behind tech stock valuations

Looking at the drivers for what’s going on with tech stocks, the story appears to be expectations of extremely rapid earnings growth fuelling high valuations. According to Bloomberg, analysts forecast that the big five will see double-digit earnings growth over the next three to five years, and a more than 20 per cent annualised rate in a couple of cases. That’s far faster than analysts’ projections for the median firm in the S&P 500, and well above any reasonable estimate of US nominal GDP growth. On this basis, the tech rally amounts to a bet that the largest listed firms will become even more dominant in time. However, downside risks remain. These stocks are exposed to political risk especially if Democrats win the presidential election. Indeed, big tech’s sheer size makes it most exposed to the tougher anti-trust enforcement supported by most Democratic candidates. There’s also the risk that future US corporate tax reform may impact the tech giants’ earning, since their effective tax rates are generally lower than average. The EU is already taking a more proactive stance, with new digital services taxes a key threat.  

Gold rises on coronavirus fears

Meanwhile, the price of gold rose above $1,600 per ounce for the first time since 2013 last week. While the drivers for this remain unclear, the jump may be linked to investors rushing to the precious metal’s safety due to fears over the global fallout from the ongoing coronavirus crisis.  
  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.
Australian dollar nears lowest levels in 11 years
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.
How to make extra cash in your spare time with a side hustle
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:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  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.
What’s covered, and how to make a claim with Raiz Insure Single Item Insurance
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.
January 2020
Market and Economic Update: Australian stimulus reducing pressure on cutting interest rates
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.
5 easy tips for staying money-smart on payday
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:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  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.
Terms & Conditions for entering our January Quiz of the Month Competition
  1. An active Raiz Invest Account must be held (account balance greater than $5). Raiz account holders hold valid accounts as set out in the product disclosure statement found on the website: raizinvest.com.au
  2. To enter, you must click or tap through (via desktop or mobile) one of the answers from the “Chance to WIN – Quiz of the Month” email to the Quiz of the Month Blog page. This will allow us to automatically put your email in the draw. You must be subscribed to emails to receive this.
  3. Entries open Thursday 16th January 2020 at 11am and entries close Thursday 30th January 2020 at 11.59pm. This may be changed at Raiz’s discretion.
  4. Raiz Invest will be giving away twenty copies of the book 'Making Money Made Simple', authored by Noel Whittaker. These twenty winners will be selected at random. We note that no individual prize exceeds $250.00 and total value of prizes do not exceed $50,000.00.
  5. These twenty random Raiz Account holders will be notified by email within two weeks of competition end date to confirm their delivery address.
  6. The permit number in the format NSW Permit No. LTPM/18/03853.
  7. This promotion is in no way sponsored, endorsed or administered by, or associated with any other third party.
  8. By entering this promotion, you agree that we may use entries for future marketing purposes in any media or branding.
  9. The competition is promoted by Raiz Invest Australia Limited, Level 11/2 Bulletin Place Sydney 2000 NSW, 1300 754 748. ABN 26 604 402 815, who is the Authorised Representative of AFSL 434776. The Raiz product is issued in Australia by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) and promoted by Raiz Invest Australia Limited (ACN 604 402 815). A Product Disclosure Statement dated 16 December 2019 for this product is available on the Raiz website and App. A person should read and consider the Product Disclosure Statement in deciding whether or not to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.
NSW Permit No. LTPM/18/03853
Quiz Question of the Month!
Line of parked trucks  

What is a dividend?

As well as the possibilities of gains from the change in value of your investment on the stock market, dividends (or distributions), is money that may be paid by a company back to you, their shareholder, out of its profits. The underlying stocks of the ETFs which make up your Raiz portfolio pay dividends from time to time. All dividends received by Raiz will be automatically reinvested back into your Raiz account. You can check out the full estimated calendar for when each of the ETFs dividends will be paid
here.  

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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.
Market and Economic Update: Market drama to begin the new year
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.    

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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.
How are ETFs different from stocks?
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:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  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.
December 2019
5 ways to achieve your money saving goals in 2020
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:
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