Dear Friends
Don’t worry, be happy
Like fans of Bobby McFerrin’s classic 1988 song ‘Don’t Worry, be Happy’ we should be relaxed when it comes to the investment markets and our super returns.
Since Donald Trump’s inauguration we have seen the global stock markets enjoy ‘The Trump Bump’ and now the ‘Trump Dump’ – all colourful terms coined by the headline writers to sell media content.
In either scenario, with a well-constructed investment portfolio (as recommended for all Marinis clients) we win in both directions. If the market is up, the value of our investment rises, when it goes down, we get to use the dividends and interest to buy discounted assets, which supercharges the upside.
In the event of a prolonged slump in the global economy, there is the Marinis Buffer for those in drawdown phase. This is designed to provide enough cash and defensive assets to keep your income going for at least three years, so you don’t have to sell good quality assets at a fire sale rate to fund your lifestyle.
There is also good news for those of us who are still working, as a slump allows us to also buy more investments at a discount.
That said, a global recession is not great news. My aim is to remind everyone is to relax in the short term and focus on the longer term. And no doubt you will have heard or read this statement “investment markets are the best way to transfer money from the impatient to the patient that man has ever invented”. My advice is to be patient.
You can draw a parallel of sorts with the markets and the readouts on a blood pressure monitor. As any reader over fifty knows, blood pressure is rarely stable – but over the medium term the trend indicates the state of your circulatory system. Investment markets similarly gyrate, but (and here’s where the parallel diverges from what’s good for markets versus your blood pressure) for investment markets the 100-year trend is upwards – The S&P 500 average annualized return from 1928 to November 2024 was 10.06% (https://www.slickcharts.com/sp500/returns).
At Marinis Financial Group, our investment philosophy is built around the use of indexed investment options. This style of investing removes the individual risk of putting all your cash into say, a ‘BHP’. Instead, you own a ‘slice’ by weighting all of the major shares in a particular index, effectively diversifying your portfolio and protecting it against overexposure. If one or two companies perform badly, it’s not a catastrophe – however the impact may be dramatically different where the portfolio concentration is on a small number of similar stocks or a disproportionately large exposure to one stock.
If, unlike fans of Bobby McFerrin, you are not feeling relaxed and happy, don’t hesitate to get in touch with me or any of our team.
Beware of social media scams
Over the last year or so, I’ve been making a special effort to remind everyone to be aware of fraudulent online activity, and specifically, recommending that you educate your friends and family NEVER to invest in an offer made on Facebook or any other social media site.
Scammers are stealing the images of well known, highly credible people and fraudulently using their influence to endorse and recommend particular financial products. The strategies they use are generally highly sophisticated.
The Facebook crooks will lure you into chasing good money with even more money – they will lie to you about how well your money is doing, and how they alone have the insights to identify investments to get the highest returns. You will also be pressured into encouraging your friends and family to ‘buy in’ to their expertise. Remember that good people do sometimes get tricked.
Whilst it would be wonderful to receive as promised, such huge investment returns – and we have all heard the stories of the early investors in Apple who turned $1,000 into $1 million – bear in mind that would have been the result of holding Apple stock for many decades. This is why we subscribe to a more predictable approach, summed up in journalist Edna Carew’s now famous statement “Get Rich Slowly – and Stay Rich”.
Happy Easter to all
This year, the Orthodox and the Western churches are aligned, so we will all celebrate this special time of year together, which will be nice.
And one more (financial) thing
On a financial note, it is now time to consider topping up your super and that of your partner. This year we can each contribute up to $30,000 as a concessional contribution. Note that whilst this figure is inclusive of your employer contributions, the gap between most people’s employer SG and this new contribution cap is fertile ground for the savvy investor. Once you have topped up, you can then claim a tax deduction for that amount, saving you around 30%.
Over the last 12 months or so I have been reminding everyone to be on guard against scammers and to follow the Federal Government’s scam watch: http://www.cyber.gov.au/protect-yourself
One of the layers of security our clients have is the personal relationship with their adviser and our team. We recognise voices, we know the individuals, we are business ‘friends.’
As always, if I or any of our team can be of assistance, please don’t hesitate to get in touch by either calling (08) 8130 5130 or email admin@marinisgroup.com.au
Yours sincerely
Theo Marinis CFP®, B.A., B.Ec., CPA., MCIFAA
Financial Strategist
Authorised Representative
