December 2023 Newsletter
Seasons Greetings from Longreach Private Wealth
Merry Christmas and seasons greetings from all at Longreach Private Wealth. We hope this festive season finds you and your loved ones in good health and spirits.
As this busy year comes to an end, we would like to take this opportunity to thank you for your continued trust and support in our services, particularly in this year of change.
On the economic news front, there was some good news. Consumer prices eased by more than expected in October. The news that inflation may have been tamed means interest rate rises may be behind us, for now. The positive data also led to a jump in the Australian dollar, taking it to a new four month high.
Retail spending slowed in October after a short-lived boost in August and September. But, in a further sign of good times ahead, business investment in the September quarter increased by 0.6% to almost $40 billion.
In mixed outcomes for share market investors, there were some devastating lows this year, and a flat performance as November ended, but the ASX200 is up 4 points since the beginning of the year. The unemployment rate has increased slightly to 3.7% with an extra 27,900 people out of work in October.
Overseas, China’s plan to bolster support for infrastructure drove iron ore prices 36% higher than the low in May. Although prices slipped $4 in November from a one-year high of $138 per tonne. While oil prices have steadied with cuts to production on the table to reduce stocks. Brent crude ended the month at around $83.
We wish you a prosperous and healthy New Year and we look forward to working with you in 2024 and beyond.
Peter, John, Sharon, Kirstin & Wendy
Financial Wellbeing is a Gift Worth Giving Yourself
The festive season is a time of joy and celebration but, for some, it can also lead to a financial hang over in the New Year.
Overspending on gifts, parties, and decorations can quickly add-up, leaving us with unwanted debt in the New Year.
In 2022, Australians spent more than $66.7 billion during the pre-Christmas sales in preparation for the festive season. The rising cost of goods and services mean that even though many are trying to curb their spending, it is expected that we will spend a little extra this year.
5 ways to rein in Christmas spending
Create a Christmas budget - A budget is an effective way of controlling spending. It may not sound like fun, but it helps you to understand what you would like to spend and how much debt you are prepared to live with. List all of the costs you can think of (gifts, decorations, food, travel and entertainment), then set limits for each category and stick to them diligently. Consider using budgeting apps or spreadsheets to track your expenses and ensure you stay on track.
Embrace the spirit of giving - Instead of buying individual gifts for every family member or friend, organise a Kris Kringle or Secret Santa gift exchange. This not only reduces the financial burden for everyone, but it adds an element of surprise and excitement to the holiday festivities.
Take advantage of sales and discounts - Begin your Christmas shopping early to take advantage of sales and discounts. Stockpiling non-perishable food items and other essentials before prices rise closer to Christmas can deliver big savings.
Online shopping - You can often find better prices by shopping around online and various third-party websites offer cash back or rewards not available in store.
DIY and personalised gifts - Tap into your creativity by making your own gifts. Handmade gifts can be a welcome and thoughtful way of giving. Consider creating homemade cards, photo albums, or baking treats for loved ones.
Tackle any debt now
With many household budgets feeling the pinch due to rising housing, power, petrol and other costs, debts may already be increasing. But if you are feeling burdened with debt, don’t decide to leave it until after Christmas. The time to tackle it is now before it gets out of hand.
One option to consider, is to consolidate your high interest debts into a single more manageable loan. This approach can simplify repayments and potentially reduce interest rates, making it easier to eliminate debt over time. But it is important to do your calculations carefully to make sure it is worthwhile for you and then to be vigilant about watching spending.
Another option is to take a cold, hard look at your expenses. Is there something that can be cut back, and that money diverted to repaying debt? Any reduction of your debt load will help, no matter how small. Some people like to implement the snowball method in tackling their debts: while continuing to make the minimum repayments on all your debts you pay a little extra on the smallest debt to pay it off faster. Getting rid of debts can help to inspire you to continue.
Taking control of Christmas spending and debt is crucial for starting the New Year on a positive financial note. So, start planning early, know what you can afford to spend and prioritise your financial wellbeing for a debt-free and stress-free holiday season.
If you are struggling with post-Christmas debt or need assistance to manage your finances, we are here to help. Contact our team of financial experts today to discuss strategies to regain control of your financial future. Make this Christmas season a time of joy and financial empowerment.
Powering down for a relaxing holiday
It’s nice to enjoy a break over the summer months. In fact, it’s an Aussie tradition - that mass exodus after Boxing Day that sees us head off for some well-earned rest and relaxation. However, it can be hard to unwind when we have a device in our pocket buzzing away every couple of minutes.
Even those who manage to resist taking work away with them and checking work emails while on holiday, can spend a lot of time on a digital device! And while you are glued to that device, chances are you are not ‘in the moment’ enjoying your time with family and friends fully or the delights of wherever you are vacationing.
Digital Addiction
It’s not an overstatement to say that during our everyday lives we are glued to our devices. The average person spends around five and a half hours a day on their phone – that’s over two months over the course of a year!
We also tend to check our phones on average around 8 times an hour - almost once every 8 minutes. And just over half of Aussies (50.65%) consider themselves addicted to their phones. Throw in the amount of time we spend on tablets, laptops and other devices and it’s clear we generally spend a lot of time in front of a screen.
A vacationing Trend
A new trend that may help to curb our online addictions is known as a ‘digital detox’ holiday.
Resorts and lifestyle destinations have got on board and many offer wellness packages offering a respite from the fast pace of online life with no phones, texts, emails, social media use or web browsing for the duration of your stay.
You don’t have to fly off to an internet black spot or sign up for a digital detox retreat to get the benefits though. Doing your own digital detox can be as simple as switching your phone to airplane mode or better still turning your devices off for a designated time every day or for a period of time.
Breaking Free
The benefits of getting away from a screen, even if it’s just for a short break, are numerous but the main benefit of having a proper digital detox is reducing stress. If your phone or tablet isn't buzzing, beeping or vibrating in your pocket or hand every few minutes, you start to breathe deeper and slow down.
Another plus of having a break from your device is the way it can affect the quality of your interactions with others. If you are not staring at a screen you open up opportunities to engage more fully with those around you. That means better quality time connecting with friends and family.
If you are a solo traveller, it can be challenging to not have the safety blanket of a phone in your hand, however there is something special about being more aware of your surroundings and taking in the little moments as they happen, without distractions.
Open to Offline Discovery
While tech can certainly make travel smoother in many ways, going phone free can open up opportunities for discovery. While it’s tempting to grab your phone to check the Google score of every restaurant you pass or using Maps to locate local attractions, it can be satisfying stumbling across a great little eating place tucked away down a laneway or finding a wonderful local market on your travels.
And when it comes to sharing your discoveries, you could also try keeping it offline. Instead of snapping moments to share immediately on social media, knowing you are going to be constantly distracted checking how your posts are being received, try to treasure those moments as they happen.
Whether you digitally detox for a few hours a day, a few days, or the duration of the holidays, your vacation will benefit from you unplugging for a bit. And who knows, you may even find some of your good digital detoxing habits follow you into the New Year.
December Newsletter 2023
By John Cameron B.Ec.B.Comm, Dip.Bus, MBA (Exec)
It is common practice at this time of year to look back on the key economic and investment numbers of the last year. Things like “inflation did so and so, real estate did such and such, the sharemarket did something else, and the RBA looked over everybodys’ shoulders”.
However, you all know this. Media is saturated with economic statistics, and I would only be repeating what you already know. Instead, I would like to look at the question of “volatility” – something we have seen plenty of in 2023.
Volatility is often used as a measure of the risk of an investment (but it is not the only one), and it is one thing we dearly wish did not happen. However, it is present in all investments, such as real estate, shares, and even boring old government bonds (I regard short term investments such as term deposits as “savings”, rather than “investments”).
Volatility is far more visible in some investment classes than others. Shares are the obvious candidate for maximum visibility, with the media paying daily attention to fluctuations in share prices. Oh, by the way, it is “downward” volatility I am writing about. People look at “upward volatility” very differently.
Times of extreme volatility often trigger severe psychological reactions in those of us who are invested – especially among those who are new to investing and have not experienced downturns before. In my experience, the more downturns somebody has weathered, the more “ho hum” the reaction becomes.
Although the losses are “only” on paper, the human psyche seems conditioned to magnify the impact of those paper losses, especially for newer investors. There is often a tendency to catastrophize, and imagine the worst possible scenario. This often involves straight line thinking, and is expressed along the lines of: “if it keeps going like this……”. But it never does keep going like that, (well, not until now!!).
So, if volatility is inevitable, what should we do? Here are some suggestions:
Think long term, and accept the fact that there will be times of volatility. Its not like volatility has singled you out for punishment. It’s the way of the world.
Don’t sell your long term investments just because of short term volatility. I would never say never sell, but there needs to be a case much stronger than volatility in order to justify such a move.
Diversify. Diversification is the way to manage risk. Diversification should be across and within asset classes.
Structure your portfolio in a way which meets your goals, and also is within your risk tolerance. The risk tolerance part is important to help you manage your way through volatile periods, without too much stress.
All the best for the festive season, & see you again in 2024.
Please Note:
The views expressed in this newsletter does not constitute advice in any way. If you would like advice on your current situation please contact us.