Blog - Page 35 of 55 - Raiz Invest

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. Read Post

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. Read Post

Want to get some context on next week’s global economic data points and to understand what they mean? Raiz has you covered! Read Post

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. Read Post

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 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 product.

A Product Disclosure Statement for Raiz Invest and/or Raiz Invest Super are available on the Raiz Invest website and App. A person must 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.

The information may be based on assumptions or market conditions which change without notice. This could 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 Invest or Raiz Invest Super.

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

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.

Don’t have the Raiz App?

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

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 product.

A Product Disclosure Statement for Raiz Invest and/or Raiz Invest Super are available on the Raiz Invest website and App. A person must 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.

The information may be based on assumptions or market conditions which change without notice. This could 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 Invest or Raiz Invest Super.

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

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.