What is happening to the world?

Gosh… what a difference a month can make. The euphoria that surrounded the run-up to and actual election of Donald Trump to the White House, caused the US share market to climb almost 10 per cent since November.

But the sudden realization of what an actual Trump Presidency means for the world and perhaps more importantly the domestic US economy, has prompted the share market to slide, bond yields to fall, cryptocurrency values to tumble and consumer confidence to plunge.

Things have become so volatile so quickly that many clients are starting to fear a major correction could happen in the Australian share market and what they should do if this happens.

So I thought it would be useful to recap the events of the global financial crisis during the years 2008 and 2009 and how truly sickening it was to see the value of good quality share portfolios steadily lose ground.

The only protection as you will read is to invest in good quality companies, refuse to panic and keep in mind the only thing we know with confidence about a downturn in the market is that it will eventually end.

And speaking of things ending, after more than a year of steady gains in the share price of Australia’s big banks, it was only to be expected that there would come a period where the market would retrace some of these gains.

This is what we are seeing now. While there has been some selling, the Commonwealth Bank is still 12 per cent higher than it was 6 months ago, Westpac is 3 per cent higher while the ANZ is down just 1.5 per cent and the National Australia Bank down 6 per cent.

The Australian Government just can’t resist tinkering with super, so there are a few things to be forewarned about that big super will be trying to push on average retirements which may not be as good as they seem.

Finally, I don’t often write about maintaining a good healthy regime as you move through retirement in this newsletter but sometimes, I think that’s a mistake, as we all need to be reminded of this from time to time.

If you know of anyone who is unsure how to arrange their finances as they move into retirement, please encourage them to contact me. If they mention this newsletter, I am happy to send them a free copy of my book The No-Regrets Guide to Retirement.

It could be a lifesaving, if not retirement saving, moment for them.

Patricia Howard

0427 429 817

Patricia@patriciahoward.com.au