An interesting week for investors. The ASX witnessed a spike over the week after the RBA announced an official cash rate rise of only 0.25% as opposed to the widely expected 0.50%. This brings the official cash rate now to 2.6%.
There are still fears of a global recession as OPEC slashed their oil production in a move that is sure to drive up prices. They have decided to cut production by 2 million barrels a day, equal to 2 percent of global supply. This combined with the ongoing war in Ukraine has heightened tensions. The move could further increase energy prices and provide more instability in an already unstable time. It will be interesting to see how the markets react to this over the coming months.
In the news: Investing just $10 a day could make you $1.8 million.
There’s a simple way to make the average Aussie salary of $92,000 a year without working – but there’s a reason not many people manage to do it. Check out the article here.
Learn where to start. Stop delaying and procrastinating like everyone else and take action now to start learning more about your finances Check out our Financing 101 session next week as well as our other events below.
- How to Adult: Financing 101 – October 11, 12pm – 1pm
- How to FIRE without sacrificing your lifestyle – October 12, 12.30pm
- How to build a second income investing – October 20, 12.30pm
- Money mistakes to avoid in 2023 – October 26, 12pm
- How to buy property like a pro – November 8, 12.30pm
- Be smarter with tax in 2023 – November 23, 12pm
- Buy your first home in 2023 – December 15, 12pm
- Get money smart in 2023 – January 25, 2023, 12pm
- Buy property smarter in 2023 – February 22, 2023, 12pm
- Invest with property equity in 2023 – March 22, 2023, 12pm
Share market wrap
Is the ASX finally on the mend? It seems to look that way. The ASX gained 4% by Friday morning providing some long-awaited relief for investors. The RBA lifted the official cash rate by 0.25%, less than widely expected. This had a very positive effect on the market which saw investors finally attaining some gains after a volatile year. Some winners are the mining sector as well as gold exploring companies.
Key sharemarket numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week 3.9% higher than last Friday at 7,024.10 points.
- The US ‘S&P 500’ (Top 500 shares in America) finished the week 2.62% higher than last week at 3,783.28 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 2.34% higher than last week at 11,148.64 points.
- The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week 0.66% higher than last week (Friday AEDT) at 7,052.62 points.
- The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 2,152.00 for the month, up 2.61% for the month to date.
Investment story of the week: Paradigm Biopharmaceuticals Ltd (ASX: PAR)
Paradigm shares have been raging this week since the company released news of a successful clinical trial for osteoarthritis. The drug company’s share price soared more than 20% on Tuesday and another 19.50% on Thursday. Earlier this week, Paradigm highlighted that multiple osteoarthritis biomarkers were shown to favourably change over time in patients treated with injectable PPS (iPPS) compared to placebo. The trial also showed significant improvement in index pain and function scores as both the Western Ontario and McMaster Universities. Paradigm further highlighted the promising market opportunity for osteoarthritis treatment. Market research found US customers would be willing to pay between US$2,000 and US$3,000 for the use of iPPS as a therapy for osteoarthritis. Worldwide, in 2017 there were approximately 300 million cases of osteoarthritis. Keep an eye on this one as it could continue to grow.
Smart Money upside #90
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 30’s; household income ~ $200k; total assets ~ $200k; savings ~ $10k annually.
Earning good money but having no structure and not making the most of her salary, feeling exhausted in her current role and would like to be able to cut back on work in the next 5-10 years.
What they wanted from us / the advice process
Help to put in place a plan to take control of finances, build a solid structure and have the ability to maintain her existing lifestyle while working less in the future.
What success looks like for them
Feeling like financial flexibility is within reach, a better work/life balance, confidence in investing that also provides passive income, owning a new home and having clarity on what retirement might look like.
What money strategy they were following before we went through the planning process
Any cash surplus is directed towards a saving account with no other structure in place.
What money strategy they chose to pursue from our planning work
A clear plan for arranging the deposit to purchase a new property, implementing a new banking structure and the direction of future surplus into a more sustainable investment portfolio to meet long-term goals.
Key benefits of going through the process
A clear strategy to arrange for the property deposit, an automated banking structure to make it easy to track and save as well as maximise any opportunities in the future, an investment strategy to allow for a cut back from work in a few years and switching to a more appropriate super fund that provided substantial fee savings.
Value of advice after all advice fees year one: $24k
Year 20 upside after advice fees: $1.7m
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
This week we wanted to support the businesses that are keeping the economy moving through these challenging times, so we celebrated their amazing work by providing 15 microloans to support the growth of businesses in Zambia. This is all part of our ongoing commitment to make a difference in the lives of our clients and simultaneously make an impact on our world through our partnership with B1G1 (Buy 1 Give 1). You can check out more information about our giving here.
Money hack of the week: Understanding what ethical, socially responsible and ESG means.
What does ‘ethical’, ‘socially responsible and ‘ESG’ even mean? Luckily, Paul Garner explained the difference between these terms and what they can mean to him. Check out the full chat here.
Money mistake of the week: What’s the secret to managing overwhelm?
“I can’t”, “I don’t know”, “Where do I start?” How many of you find yourself saying these multiple times per day? Lynne Cazaly’s new book, Argh!, is her go-to guide on managing to overwhelm in all aspects of your life. We chatted about the fundamentals of overwhelm and her secret to managing it. Check out the full chat here.
Jargon Buster of the Week: Loan term (via Macquarie)
The period of time specified by the lender for the borrower to repay the amount owing to the lender, usually in set instalments including interest.
Podcast from last week: #256 w. Al Bentley – Share investing hacks from Simply Wall St
In this episode, I chatted with Al Bentley, the founder and CEO of Simply Wall Street – a tech platform that helps investors with long-term direct share investing. They’ve taken the investing world by storm and have hundreds of thousands, almost a million users in Australia alone.
We’ve talked about his take on the market today; when individual share investing fits investors, when it is right, and when it’s not right. As well as some of the investing mistakes to avoid and the things you can do to be the most successful investor.
Helping people with this stuff is our jam, so if you want to chat about how to make your money success easier, you can book an intro call with us here.
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