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Resist today, relax tomorrow
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Market Update 30 September 2019
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All Australia's vital statistics - October 2019
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6 new financial videos
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DGP by country since 1800
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Boost savings with compound interest
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High times for low interest rates
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Market Update - September 2019
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Will the world slip up on oil again?
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Australia by the numbers - September 2019
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Spending money in a cashless world
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Saving for a rainy day
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Market update
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Access to more resources and tools than most websites.
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Nine reasons why recession remains unlikely in Australia
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How's Australia doing statistically?
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Protecting your super package.
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Making the most of record-low interest rates.
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Market Update 2019
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How the top 10 global companies have changes since 1998
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The longest US economic expansion ever
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When can I access my super
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Australia by numbers – Update
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How to retire early
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How to play catch up with your Super
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Inflation undershoots in Australia
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9 money mistakes to avoid in retirement
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What a financial planner does to help.
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Australia's vital statistics.
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What kind of money parent are you?
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How to save money
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Federal Budget 2019 - Overview
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How the 2019 Federal Budget affects you
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Women and Money
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Market Update - March 2019
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The problem with getting to 53 years of age.
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How to avoid a travel debt hangover
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Things to avoid as a newbie investor
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Budget Time - How's Australia going?
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Most older Aussies prefer home care over a nursing home
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Why growth in China is unlikely to slow too far
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10 money conversations to have when your relationship heats up
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Australia slides into a 'per capita recession'
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6 steps to get your money stuff together
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All you need to know about how Australia is going.
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Australian housing downturn Q&A
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6 ways to reduce your credit card debt once and for all
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5 life insurance questions you've always wanted to ask
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2019 a list of lists - regarding the macro investment outlook
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Part 4 - The major benefit of ‘behavioural coaching'
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How to adult—a quick guide to personal finances in your 20s
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How Australia is performing.
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The Australian economy in 2019
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Holiday budgeting tips— How to avoid a travel debt hangover
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Australia - a comprehensive run-down of our vital statistics.
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The Fed and market turmoil - the Fed turns a bit dovish but not enough (yet)
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12 ways to avoid waste this Christmas
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Rising US interest rates, trade wars, the US midterm election results, etc
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Our Advent calendar for 2018
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Responsible and ethical investing
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What are the 3 biggest living expenses for households?
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Your Adviser and Behavioural Coaching
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Stop!! Don't do a paper Budget, use our online budgeting tools instead.
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Information needed to be the BBQ expert.
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Would you like to retire by 40?
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The property cycle and the economy
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How financial advice helps create wealth.
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7 money personalities you may identify with or want to avoid
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Are shares expensive?
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How's Australia doing statistically?
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Super investment options – what’s right for you?
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Here's how to lead a happier life
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What happened to all the worries about rising inflation and bond yields? Goldilocks, tariffs, Turkey & other things
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Is it better to buy an investment property or home first?
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Nine keys to successful investing
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This information will turn you into a fireside expert.
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How Australians will use their tax return
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Lessons from the blue zones: secrets of a long life
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Trumponomics and investment markets
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Tools for budgeting, cash flow, Super and more ….
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How much super should I have at my age?
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How tax deductible personal super contributions work
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The rise of the gig economy and side gigs (thanks to technology)
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Statistics for all Australians
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Watch out for tax scams
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After the Australian household debt and east coast housing booms
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Now’s the time for tax planning
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Why it pays to contribute to your partner's super
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Australia by numbers – Update
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How to deal with financial stress – nearly 1 in 3 affected
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Federal Budget 2018 – Overview
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Your Budget
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4 components of our 2018 Federal Budget
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US China trade war fears – Q & A
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7 ways to boost your super
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Australians reveal their priority goals
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Australia by numbers – Update
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Your retirement questions answered
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How to make money by turning your unwanted goods into cash
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Our website is really our digital office.
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Love and money? It’s not about control
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The pullback in shares - seven reasons not to be too concerned
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Australia. All you need to know to be the expert.
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Australian’s love affair with debt - how big is the risk?
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5 ways to keep a cool head in a falling share market
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2018 – a list of lists regarding the macro investment outlook
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Where Australia is at. Our leading indicators.
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The year that was and the year ahead
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Australia's vital statistics
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12 ways to enjoy summer without spending a fortune
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One in three Aussies travel without protection
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If you’ve always thought property prices only go up…
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Will Australian house prices crash?
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Where are we in the global investment cycle and what's the risk of a 1987 style crash?
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Money steps for women
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Resources on our site to help you, your family and your friends.
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Australian Dietary Guidelines and healthy eating chart (PDF)
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How to retire, your way
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Prepare for retirement without missing out today
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Be the boss of your cash
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Should you lend money to family?
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Money mistakes people make in their 50s and 60s
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Australian Dietary Guidelines and healthy eating chart (PDF)
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Eight steps to improved cashflow... and lifestyle
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Powerful Budgeting, cash flow and Super Tools available on our site.
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5 ways Australians will use their tax return this year
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Australia's leading causes of death - ABS
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The threat of war with North Korea
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Six traits of Australians living the dream
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The break higher in the Australian dollar is likely to be limited
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Money can buy you happiness, you’re just spending it wrong
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Key Economic Indicators, 2017 – updated
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Helping your kids buy a home
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From Goldilocks to taper tantrum 2.0
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What’s your debt age?
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Doing a budget is a good idea but ....
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Planning is the key to making it financially
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What to do when you come into money
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Reduce your bills with these household items
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It pays to contribute to your partner's super
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Federal Budget - 2017-18 - Overview
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Federal Budget - 2017-18 - Budget documents
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Five, four, three… it’s not too late to get more in super
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Super changes are coming
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What’s your debt age?
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Australian cash rate on hold
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Super changes this financial year - Dr Shane Oliver - video
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The door is closing on super’s current caps
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Is Donald Trump's honeymoon with investors over?
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Estate planning and why you need a super plan
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What does a comfortable retirement look like?
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Give your career a health check
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Super changes from July 2017
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Changes to the Age Pension assets test
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Keep your money safe over the silly season
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Looking ahead at 2017
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Review of 2016, outlook for 2017 - looking better despite the political noise
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Merry Christmas for 2016, a Happy New Year and a prosperous 2017.
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54.2 million worries
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Five tips for happy healthy ageing
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Thinking about managing your own super?
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Sending more to the tax office than you should?
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Government pulls back on proposed changes to super
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Market Update - What to consider when investing in a low return world
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Stop!! Don't do a paper Budget, use our online budgeting tools instead.
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Oliver's Insight - Megatrends
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Value of Advice
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A growing family doesn't have to blow the budget
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Thinking about managing your own super?
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The investment outlook - it's not all that bad!
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What’s your biggest obstacle to financial success?
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Should you own the roof over your head?
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2016-17 Federal Budget - AMP
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2016 Budget in detail
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Changes to the Age Pension assets test
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Heirlooms no more
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Initial market falls precede stronger returns - Shane Oliver
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Aged Care - Changes to Assessment of Rental Income
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A bump in the road, then a new start
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New year, new start – are you ready for retirement?
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Review of 2015, outlook for 2016 - Dr Shane Oliver
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We wish you a Merry Christmas for 2015 and a Happy New Year
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Go easy on the plastic over Christmas
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The Australian dollar doing what it normally does - overshoot. Dr Shane Oliver
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How to manage volatility in a low return world
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The Australian economy - more help will be needed. Dr Shane Oliver
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Insurance through my super
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A Super Loan for all reasons
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Making a smooth transition
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Budget 2015 - some professional opinions
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Australian Government - Budget 2015
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Achieving a comfortable retirement
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Is off-the-plan on the money?
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All you need to know about buying at auction
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To sell or not to sell?
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Saving in a material world
Market update

The table below provides details of the movement in average investment returns from various asset classes for the period up to 31 July 2019. 

       
 
 

Asset class (% change)

1 month

3 months

1 year

3 years 
(% pa)

Australian shares

2.9

8.6

13.3

11.7

Smaller companies

4.5

4.2

7.6

9.3

International shares (unhedged)

2.3

2.9

11.7

14.1

International shares (hedged)

1.1

0.7

4.1

11.5

Emerging markets (unhedged)

0.6

-0.6

5.5

12.0

Property - Australian listed

2.6

9.4

21.3

7.5

Property - global listed

1.4

2.0

8.1

3.1

Australian fixed interest

1.0

3.7

10.4

4.3

International fixed interest

0.7

3.4

8.0

3.1

Australian cash

0.1

0.4

1.9

1.8


Overview and outlook

Hindsight is a wonderful thing and given the events over recent days it could be suggested that July was the calm before the current storm. The calm of July turned when at the end of the month Fed Chair Jerome Powell indicated that the July cut was not necessarily the start of a cutting cycle, rather a mid-cycle adjustment. Then the storm really started with a tweet from US President Donald Trump on the 1st August escalating the trade war. In the tweet, Trump declared a 10% tariff on the remaining $300 billion of imports from China, effective 1st September. 

 
Prior to this, July was a period of relative calm with a continuation of the bull market and healthy returns across the major asset classes. Despite slowing economic conditions, the market anticipated favourably the Fed’s first rate cut in over a decade with the Federal Funds rate cut by 25 basis point to a range of 2.0% to 2.25%. 
 
Locally the RBA also cut interest rates by 25 basis points to 1.00% as inflation continues to undershoot the RBA target range. Underlying inflation has fallen to the lowest level in over two years and a range of data points indicate slowing economic conditions. Business conditions have weakened, slowing ANZ Job ads, a slump in building approvals and confirmation of weak credit growth in June all combined to give the RBA the impetus to cut rates for the second time this year. 
 
Australian inflation running below the target range
 
Source: ABS, AMP Capital
 
There are rising concerns that the US expansion (now the longest ever) is ripe for a recession. Many commentators point to a range of reason why this will or won’t happen in the near term. The concern is that the economic impact of the trade war will have negative impacts to both the Chinese and US economies that, in addition to other stresses, could result in a contraction in economic activity. 
 
With the US yield curve recently inverting (long term rates being lower than short term rates) some have suggested this is an indication of an impending US recession. However, with continued support from monetary policy, unemployment falling to multi decade lows and limited growth in public sector debt, there is little supporting indicators to suggest a recession is imminent. 
 
US yield curve inversions and recessions
 
Source: NBER, Bloomberg, AMP Capital
 
In the UK, Boris Johnson was elected Conservative Party Leader with 66.4% of the vote, beating Jeremy Hunt with 33.6% of the vote. It is unclear how changing Prime Minister will change either the European view of what they are willing to accept in a Brexit deal or indeed what the UK parliament will accept, which at this point is nothing. Time will tell but early signs from Europe in recent days is there is no change. 
 
Share markets
 
Despite slowing economic conditions and escalation in tension with Iran, global equities continue to rise. Mid-month the Fed Chair confirmed expectation for a rate cut later in the month which provided support to share prices in the US resulting in the S&P 500 gaining 1.4% over the month. 
 
The US market was supported by some positivity in US reporting season. According to FactSet, as at the end of July, blended earnings growth rate stands at -1.9%, better than the -2.7% expected at the end of the quarter. Roughly 76% of companies have surpassed consensus earnings expectations. In aggregate, companies are reporting earnings nearly 5.5% above expectations ahead of the 4.8% five-year average. Big earnings takeaways this season have revolved around a healthy US consumer, softer industrial, macro uncertainty, outsized tariff focus, cost saving and pricing initiatives, and negative revisions/lower 2H estimates. 
 
International shares gained 1.1% during the month on a currency hedged basis. In Europe, shares were flat despite what was regarded by many as good news of the nomination by EU leaders of Christine Lagarde to head the ECB (subject to majority EU parliament support). She is considered to be supportive of the ‘whatever it takes’ approach set by Mario Draghi. Emerging markets were a little better gaining 0.6% on an unhedged currency basis, 
 
Australian shares were strong gaining 2.9% for the month, outperforming the global market. The market was supported by the outperformance of the small cap (4.5%) space which significantly outperformed the large caps. With report season to commence in August, we will see if the surprise seen in the US results is reflected in Australia. 
 
Consumer staples was the standout sector in July (+9.8%), followed by Health care (5.9%) and Info tech (5.0%). The weakest sector was Materials (1.0%) with all sectors gaining over the month. Resources (1.1%) and Energy (1.7%) were also among the weakest sectors. 
 
The best performers in the S&P/ASX 100 were A2 Milk (23.6%) with increases in the recommended retail prices leading to earnings upgrades and offsetting rising dairy prices. Magellan (18.6%) continues to experience solid net inflow and was supported by continued rising equity markets. Treasury Wine Estates (13.5%) reversing its downward shift in dramatic fashion with the company guiding 15-20% EPS growth in 2020. Amongst the worst performers was Cimic (-18.0%) which reported first half profits lower than what many analysts were expecting as the company faces weakness in Hong Kong construction. AMP (-15.6%) on the back of the announcement that the sale of AMP Life was highly unlikely to proceed as proposed due to failure to receive approval from RBNZ and that there would be no first half dividend. Iluka (-10.7%) also struggled with weak second quarter revenues and higher cash costs. 
 
Interest rates
 
Bonds continued to perform well despite the positivity in equity markets. Domestically the Australian 10-year yield fell 12 basis points to a new record low of 1.20%. This was driven by expectations for further cuts by the RBA and signs of further weakness in economic conditions. 
 
Australia 10 year yield
 
Source: FactSet, AMP
 
In the US, the 10-year yield was steady at 2.01%. The bond yields contributed to Australian fixed interest (1.0%) delivering outperformance relative to global fixed interest (0.7%) both a solid one-month result. 
 
Property
 
Listed Property Markets also performed well with Australian listed property (2.6%) in line with the local equity market. Global Listed Property (1.4%) outperformed the broader equity Market. 
 
 
 
 
Source:  AMP