Market returns to 30 June 2024
| 6 Mths | 1 Year | 3 Years | 5 Years | 10 Years | |
| NJ Retirement Fund | 6.49% | 13.77% | 5.53% | 7.39% | 8.41% |
| Australian Shares | 4.22% | 12.47% | 6.11% | 7.26% | 8.06% |
| International Shares | 14.37% | 19.86% | 11.17% | 12.89% | 13.0% |
| Listed Property | 10.17% | 24.57% | 5.74% | 4.38% | 8.91% |
| Aust Fixed Interest | 0.18% | 3.67% | -1.98% | -0.60% | 2.19% |
| Intn’l Fixed Interest | -0.48% | 2.67% | -2.74% | -0.69% | 2.04% |
| Cash (90 day bills) | 2.18% | 4.36% | 2.44% | 1.64% | 1.86% |
| Inflation | 1.86% | 3.69% | 5.28% | 3.84% | 2.73% |
All Ordinaries Index
Market Commentary
The Australian Sharemarket had a rough period in the first 4 months of the financial year but finished strongly to record a gain of more than 10%.
Investment markets are always unpredictable and volatility has been high in the last few months. It’s not easy for investors but patience will be rewarded in the long run.
Inflation
The annual CPI (inflation) rate for the month of May 2024 was 4.0%. This was higher than the previous figure is March and April. It was also higher than the expected figure. As a result speculation has now turned to the Reserve Bank increasing interest rates soon.
There are many other economic figures that they use in making this decision. Some of those figures such as GDP growth, Retail Sales growth and Employment Growth show much worse results so that makes it hard to predict what could happen.
Also it is worth noting that the CPI result was skewed by large increases in Rent, Tobacco Tax and insurance premiums.
The next set of CPI figures are due to be released on 27 July and the next Reserve Bank meeting is on 6 August.
CrowdStrike outage
Crowdstrike is a provider of premium internet security monitoring software called Falcon. It is used by large companies such as airlines, banks, supermarkets and news media.
One of the features of this software is that it is very frequently updated to address new threats that emerge. The downside of rushing out updates is that they do not get adequate testing before they are released.
On Friday 19 July a CrowdStrike Falcon update caused a widescale outage of user PC’s. This resulted in flight cancellations and payment system failures. It appears to be a temporary, fixable outage but it did create a commotion for a short time.
Superannuation Changes
The standard Concessional Superannuation contribution limit increased to $30,000 on 1 July 2024.
The Non-concessional limit has also increased to $120,000 (4 times the concessional limit).
The 3 year bring forward limit is therefore $360,000.
Unfortunately the transfer balance cap did not increase so it stays at $1,900,000.
There is a proposed new Tax threshold for Super of $3 million with earnings from the amount in excess of this limit to be taxed at 30% starting from 1 July 2025. Note that this is not yet legislated and may not actually be brought in.
The threshold is based on the balance at the start of the year so any withdrawals made during the financial year do not remove the tax for that year but could remove it for the following year.
If this new tax is likely to impact you we will work with you to make the best decision for minimising your overall tax bill before it comes into force.
US Presidential Election
It’s a only 3 months until the US presidential election and there has been considerable drama. There was an apparent assassination attempt on Donald Trump, the Republican convention has officially selected him as a candidate despite his considerable legal troubles and Joe Biden has now ended his candidacy.
The Democrat Party must choose a new candidate before their convention which starts on 19 August. It is likely that this candidate will be the current Vice President Kamala Harris who is a relatively youthful age 59 compared to 78 year old Trump.
But anything could happen and it is possible that another candidate will be selected.
Many people are wondering how this will impact on their portfolios but I think it is not worthwhile attempting to predict that or making changes to long term investments on that basis.