I’m a little overdue for a detailed market update, so here goes. Despite the chaos that’s been happening across the ditch, the ASX has remained pretty steady since the start of the year. Australian shares rallied on Friday, led by strong gains posted by energy and consumer discretionary stocks which lifted the benchmark index to its second consecutive weekly advance.
The Australian share market took a strong lead from Wall Street last week where all three major benchmarks rose by more than 1.5 percent, led by a 2.7 percent rally by the Nasdaq. My gut tells me that Wall St is yet to settle and further falls are on the horizon with a whole heap of uncertainty around a US recession and inflation continuing to creep. Watch this space for more updates.
In the news: A beginner’s guide to employee share schemes
If you are an employee in demand, you could be offered shares or options by a company as a motivation to join or an incentive to stick around. Click here to read how I unpack this in detail with Money magazine.
Tax time is here, so get across how to cut your tax bill before EOFY streaming live on June 8. Check out the rest of our events right through winter, covering money fundamentals, including – money mistakes, money mindset and investing. Click through to register and join the session:
Event schedule and links to book here:
- GA Event: How to Cut Your Tax Bill Before EOFY – June 8, 12:30pm – 1:30pm
- How to buy your dream home without a crippling mortgage – June 16, 12.30pm – 1.30pm
- Cryptocurrency investing 101 – July 7, 12.30pm – 1.30pm
- How to save more money faster – July 28, 12.30pm – 1.30pm
- Buy property the smart way in 2022 – August 18, 12.30pm – 1.30pm
Share market wrap
Australian shares jumped on Friday, after a surge across Wall Street, while Twitter shareholders have sued billionaire Elon Musk, accusing him of manipulating the company’s share price. Over on Wall Street, stocks were up on Friday as retailers reported positive purchasing sentiment. Crypto was down and the decoupling crypto investors were looking for isn’t panning out as they hoped.
Key sharemarket numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week 0.32% higher than last Friday, at 7,415.90points.
- The US ‘S&P 500’ (Top 500 shares in America) finished the week 3.31% higher than last week, at 4,057.84 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 1.70 % higher than last week, at 11,740.65 points.
- The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week 3.71% higher than last week (Friday AEDT) at 7,564.92
- The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 3,068.88 for the month, down -26.94% for the month to date.
Investment story of the week: Endeavour Group (ASX: EDV)
Endeavour Group is the leading hospitality and liquor business in Australia, and an ASX top 50 company. Endeavour Group separated from Woolworths Group on 28 June 2021 via one of the largest demergers in Australian history with a market capitalisation of $10.8 billion on listing. A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating and $8.10 price target on this drinks giant’s shares. This follows an investor day update which revealed the company’s growth plans. This includes an increase in its growth capex to fund store expansions, hotel acquisitions, and its digital business. Goldman was pleased with its plans and is comfortable that the company’s balance sheet can fund this increased capex obligation. The EDV share price was fetching $7.25 at Friday’s close.
Smart Money upside #70
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; late 20’s, income ~$270k, total assets ~$670k, saving~ $4k annually
- A strong desire to purchase a property, but no idea on how to actually do this
- No knowledge of as to how much to spend on a property
- Lack of diversification with existing investments
- Overall lack of knowledge around finances but eager to learn
What they wanted from us / the advice process
- Clear plan to purchase a first home
- Maximise the financial position
- Diversify investment portfolio
- Optimise cash flow and super
What success looks like for them
- Buying first property
- Freedom and flexibility to be working abroad
- Having a diversified portfolio in place
- Understanding property and employer share scheme
What money strategy they were following before we went through the planning process
Simple spreadsheet budgeting, basic savings, retaining employer shares as they vest
What money strategy they choose to pursue from our planning work
Clear and easy to follow automated banking structure, investing excess cash into diversified shares, selling employer shares to arrange for property purchase and switching to a low-cost super fund with access to a range of quality passive investment options.
Key benefits of going through the process
- Reviewed existing shares and transformed existing portfolio into a diversified portfolio
- A clear plan that will help arrange the property deposit and buy within the next 12 months
- Clear and easy to follow banking structure that makes it easy to track and save
- Switch to a low-cost super fund that gives access to a range of quality passive investment options
Value of advice after all advice fees year one: $45k
Year 20 upside after advice fees: $2.6m
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 one of our clients had their first baby, so we’ve celebrated by providing a safe childbirth for 100 disadvantaged women in Kenya. This is 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: How to get the most out of your financial adviser
Looking to get the most out of your financial adviser? Pivot Wealth client Avani joined me in this episode with some wisdom for those looking to maximise their experience with a financial advisor. Her number one recommendation was to know your financial goals, both short and long term. Check out our full chat here.
Money mistake of the week: What’s the cost of delayed action?
How much money are you losing by not taking steps in the right direction with your finances? It’s the cost of delayed action, and it could be costing you thousands. In this episode, Christine and Walter walked us through why they decided to get help from Pivot Wealth and what they got back in return. Check out our full chat here.
Jargon Buster of the Week: Portfolio (via Canstar)
A portfolio refers to the collection of assets that an investor holds, be it stocks, bonds, property or alternative investments.
Podcast from last week: #170 Money Chat w. Hermione – Money goal setting for business owners
In this episode, I talked to one of our lovely clients Hermione, who went through the planning process with her partner Dave. Both of them are self-employed. We talked a bit about how financial forecasting motivates them, understanding the effect of working at different rates, how that impacted their young family and their future as well as some of the things that surprised them about the planning process and what to expect for someone who’s thinking about it.
PS: If you want a hand to get on the front foot with your money in 2021, check out our 45-minute one-on-one sessions here. We’re donating 100% of the money raised to charity, so you can up your money game and do something good on the planet at the same time.
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