The Reserve Bank has increased interest rates for the fourth month in a row, raising its cash rate target by half a percentage point. And again, the general sentiment is that this won’t be the last one for this year. The goal here is to ensure inflation in Australia returns to target over time.
A direct effect of this is the softening housing market, which for many marks the start of some good news. This week we’ve started seeing the first signs that inflation is coming down, and along with it interest rates could be next, suggesting the soft property market could be over sooner than many are expecting.
In the news: Interest rate rises could be a boon for first-time homebuyers
The markets are still soft, so now is a good time to understand how to invest while the market is crashing. Join me online this August 24 to find out exactly how. Don’t leave it to the last minute, click through to register and join:
Share market wrap
The S&P/ASX 200 climbed 0.6% on Friday, lifting its weekly gain to 1 per cent. It was the first time the benchmark has closed above the 7000 level since early June. Over in the US equity markets were relatively flat overall, but mixed, while crypto was down with oversight legislation hitting the headlines.
Key sharemarket numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week 1.3% higher than last Friday at 7,207.50 points.
- The US ‘S&P 500’ (Top 500 shares in America) finished the week 3.2% higher than last week at 4,155.17 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 5.25% higher than last week at 12,668.16 points.
- The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week 1.29% higher than last week (Friday AEDT) at 7,445.68 points.
- The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 2,546.71 for the month, down 2.54% for the month to date.
Investment story of the week: Ramelius Resources Limited (ASX:RMS)
Ramelius Resources is a Western Australian gold producer which owns and operates the Mt Magnet, Edna May, Vivien, Marda, Tampia and Penny gold mines, and the recently acquired Rebecca Gold Project, all of which are located in Western Australia. After several months of downturn, the stock has caught a bid since 30 June. This is curious, as sentiment was poor following the release of the company’s production update a week earlier. The company reported its “gold production for FY22 will fall marginally short of the current guidance range”. Nevertheless, with the price of gold strengthening, and the broad sector strengthening since June/July, the stage is set for Ramelius to gain on the chart.
Smart Money upside #81
Because people don’t often talk about the full ins and outs of their money, it’s hard to learn lessons from hearing what good and bad choices other people make. This story is from one of our clients to help you take your money game to the next level.
Individual; mid 20’s, income ~$100k, total assets ~$950k, savings~ $20k annually
No clear strategy in place
What they wanted from us / the advice process
Good strategy to go with investing inheritance in a way that makes the most sense to current circumstances. Review a few financial options to navigate the best way forward. Understanding property investing and how it can help achieve their goals
What success looks like for them
Good investment portfolio that is growing
What money strategy they were following before we went through the planning process
Unsure of their next step, sitting on cash.
What money strategy they chose to pursue from our planning work
Clear banking structure and investing into diversified investment portfolio
Key benefits of going through the process
Organisation and structure, starting a solid investment plan.
Value of advice after all advice fees year one: $65k
Year 20 upside after advice fees: $1.2m
If this story resonates and you want to chat about how to get these sorts of results, you can book an intro call here.
Giving update of the week
Through the month of August we’re celebrating Pivot’s seventh birthday, and are hoping to celebrate by making 700,000 positive impacts around the world. We’re discounting the cost of our 45 minute, 1-on-1 Money Breakthrough sessions by 50% of the regular cost of $195, and donating 100% of the money raised from the sessions through our partnership with Buy 1 Give 1 (B1G1).
Money hack of the week: How to find value in the housing market.
We all know that investing in property can be lucrative, but where does the true value of the property market sit? Property expert Chris Gray has a great tip. Aim to buy at the valuation price in high-demand areas. You mightn’t make a million overnight, but you could make $100,000 every year for 10 years and reach your goal anyway, without the volatility. Check out our full chat here.
Money mistake of the week: Not choosing a loan type to suit you best.
Do you know the cons of a fixed-rate loan? Most people are undereducated on what mortgage options are out there and whether a fixed loan is a good strategy for them. Aaron Christie-David joined me to discuss the potential risks of fixed-rate loans and, on the other hand, where these loans can be helpful for investors. Check out our full chat here.
Jargon Buster of the Week: ACQUISITION (via Morgan Stanley)
One company taking over the controlling interest in another company.
Podcast from last week: #236
How to buy your dream home without a crippling mortgage
This episode is a live recording of an event I did on How to buy your dream home without a crippling mortgage. I unpacked the ways how to buy a dream home in Australia, which does not come cheap and do it in a way without carrying a mountain of debt that stresses you out.
I talked about some tactics you can use for tax planning around property purchases, costs of running property investment, and the strategic considerations to get you to that dream home purchase.
This episode is perfect for anyone that ultimately wants to end up in their dream home and do it without having a huge mortgage hanging over their head.
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