Financial Update for May

It’s May finally (feels like it should be Christmas soon!) and it is looking pretty good for Australia at moment in regard to Covid-19. This is great news for us, although the rest of the world is still suffering.

I promised more updates last newsletter, but to be honest not much really changed in the past few weeks. Bit like Groundhog Day. Markets went up, markets went down, back up again and overall (ignoring today’s drop) the Australian share market ended up being the “best month on record” according to the Australian (although it is just regaining losses). The US and UK is still in a world of pain so we aren’t out of the woods yet.

The government’s Jobkeeper and stimulus packages are well underway and applications have been processed for early access to super, with numbers expected to pass a million. Statistics are showing you are twice as likely to be eligible if under 40. If you need to access, just make sure you try and get it back on track in the future.

Home lending seems to have tightened quickly as questions around job security for certain industries are raised, and despite the government attempting to keep credit availability, ASIC has reminded banks they still have responsible lending obligations, which pretty much takes refinancing for many people off the table. Maybe in a few months or so it will return to normal. Also because of so many offshore processing staff in countries that are shut down, some processing has nearly completely stopped causing massive delays in settlements.

Some industry funds with large proportions of unlisted assets have been questioned around potential liquidity issues, so will be interesting see how this pans out. It should hopefully change requirements around disclosure of what funds are investing in with their members money. I’ve always had a rule not to play in funds with more than 30% unlisted assets. Although when you don’t expect to have to make assets liquid at short notice as your average customer age is mid thirties, it’s not entirely their fault.

Tonight the second round of easing restrictions is coming into effect and I am looking forward to dusting off my Harley and blowing some cobwebs out around the district (within 50km of course).

I hope you have a great weekend.

Cheers,

Rob Laurie.

Wealth Factory.