News

Japan

It is hard to believe that not only are we seeing another natural disaster, but Japan are enduring three horrendous events, being the earthquake, the Tsunami and now the Nuclear issues.

Again our thoughts are with the Japanese people some of whom are suffering through an incredible tragedy.

It is the Nuclear problems that are causing the most concern in the financial markets.  Uncertainty is once again the problem.  Until the extent of the damage is known and ideally the situation is under control, then those in markets will expect the worst.  This is why we are seeing higher levels of volatility.

Unfortunately the situation in Japan was compounded by the fact that its economic recovery was more fragile than that of many others around the world.

Oil and Petrol back in news

As we alluded last month, whilst the experts were busy with their predictions for the year and being very bullish or confident, we expressed concern that there was the risk of an unexpected event and pointed to the Middle East.

This has certainly occurred with financial markets displaying considerable volatility and they have lost some ground.

This really highlights the risks that can quickly appear where oil is concerned.  Yes there is the political instability, but the major, underlying problem is that the oil is being consumed faster than new supplies are being discovered.  In simple economics, demand is greater than supply.  The chart below highlights this;

Source: www.aspo-ireland.org, IMF, AMP Capital Investors

Oil consumption is not reducing around the globe so price pressure will remain.  Events like those we are currently seeing overseas bring forward concerns about prices.  We are not saying that the world will run out of oil soon, but demand is in excess of supply and that traditionally pushes up prices.

Keep in mind that markets usually overreact both on the downside and upside as news is released and expectations change.

We are already suffering the impact at the bowser as petrol prices have risen and appear likely to continue the trend whilst the unrest overseas continues.

Those asset classes in your portfolio that include Energy shares will do well during this period, but apart from that, there are not many winners in the financial markets or for households.

The markets have improved 

The table below indicates the performance of the markets (not any individual investments) for the 12 months ended 28^th February 2011.  Whilst still not where we would like the results to be, they are improving.

In addition, our portfolios that we operate for you have been adding value above these averages.

It won't happen to me....

We hope it won't but unfortunately the following statistics mean that there is a risk that you or someone close to you may suffer an event that could be covered by insurance...

• Over 114,000 cases of cancer will be diagnosed this year
• Yesterday 33 women were told they have breast cancer, the same today and tomorrow and.....
• 1 in 6 men will get prostate cancer
• 11 Australians dies each from Bowel cancer
• Heart disease kills 133 people per day
• Around 60,000 strokes occur each year

This list could continue with other illnesses.  The statistics are from various sources such as the Cancer Council, Heart Foundation & The National Stroke Foundation.

If you have any concerns about the type and level of your personal insurance cover please call Sally Jones or Jamella Sim.  We can ensure your policies are structured in the most cost effective and tax effective way.

Centrelink

There has been a change in process for those dealing with Centrelink.  They are now encouraging new applicants and those requiring forms to log on to the web and print them off rather than them provide the forms for you.

Of course if you do not have a computer or access to the web, let them know and they will provide the document.

Of course as always with Centrelink if you need assistance please contact us, we can help by providing the forms and helping you complete them.  Julie Irving is our specialist in this area.

DMG – now all in one location

The start of the month saw the Financial Planning staff join the rest of the DMG team at the office in Foster Street.  This means that the entire firm is now together in the one building.  Please click here to view our Contact Us page.