Australians are sitting on a mountain of cash. Collectively we have close to $1500 billion stashed away in deposits, and while interest rates are rising inflation is at multi-year highs.
So, while money in the bank can earn around 3% at present, inflation of 5.1% means the purchasing power of your savings is falling by 2% annually. It means now could be the time to put your money to work elsewhere – and potentially snare some bargains along the way.
Glen Hare, co-founder and financial adviser at Fox & Hare, says many Australians face the dilemma of where to invest. “People know they should be doing something with their savings, but that can be overwhelming,” he says. “Or people become so concerned about making the ‘wrong’ decision they make no decision at all. And that just means extra money ends up sitting in the bank.”
With this in mind, let’s take a look where investors can find value.
Sharemarket
It’s been a tough year for equities. The leading Australian sharemarket index, the S&P/ASX 200, is down 8%. In the US, stocks have lost 10% of their value since July 2021 and, more broadly, close to 14% has been wiped off global equities since mid-2021.
The upside is the potential for bargain buying. Mark McShane, financial adviser and director of Chrysalis Lifestyle Planning, likens the current situation to a department store sale. “Dips in sharemarkets can be viewed as a chance to pocket a generous discount.”
There are undoubtedly big savings up for grabs, even on the share prices of corporate titans. At the time of writing, Commonwealth Bank shares were trading at $97, down from $110 in late 2021. CSL is down to $286 compared with $319 late last year, and Atlassian is trading at $38, down from $48 in August.
هذه القصة مأخوذة من طبعة September 2022 من Money Magazine Australia.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك ? تسجيل الدخول
هذه القصة مأخوذة من طبعة September 2022 من Money Magazine Australia.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك? تسجيل الدخول
An outrageous, beautiful monopoly
Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.
Drop the anchor to judge value
Buying and selling decisions should be based on where a stock price is going, not where it has been.
Powering the AI boom
Beyond the software and chipmakers, where will the energy come from?
Get into life
Tucked inside super are products that can protect you from life's inevitable uncertainties.
Paths to home ownership
Taking the road less travelled can sometimes deliver unexpected benefits.
Sold! Quick ways to add value
Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.
Money lessons the kids need to know
Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.
Property-investing rules: are they likely to change?
The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.
What's love got to do with it?
A rollercoaster of emotions could be driving poor crypto behaviour.
Are we ready to be cash-free?
Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.
