Interest Rates, Inflation & Tax Tips | The Adviser Monthly May 2022

THE ADVISER MONTHLY | MAY 2022

VOLUME II. ISSUE 5

Interest , Inflation, and Investments: What You Need to Know

Welcome to the May edition of The Adviser Monthly.

A lot is happening in the world right now. The war in Ukraine, rising inflation and interest rates, and the recent federal election. These have all added to market uncertainty and volatility.

In uncertain times when markets are volatile, it’s natural for investors to be a little nervous. But history shows there are investment winners and losers at every point in the economic cycle. At times like these, the best strategy is to have a well-diversified portfolio with a focus on quality. Below, we highlight five great charts about investing that are useful to remember in times like this.

Read more about higher interest rates adding further pressure on housing growth rates, the Australian cost of living pressures, and what you need to know about the first home buyer schemes as a buyer, owner, and renter.

Tax time is fast approaching and it’s time to think about how you can get prepared early for the best result. Check out some tips in the article below.

Finally, have you ever thought that your generation is better off (or worse off) than the ones that have come before or after? We’ve included an interesting article that may change your current perception.

The team at Make Work Optional wishes you a happy end to Autumn. Stay safe and well.

THE ANTICIPATED RATE RISE

An upwards move by the RBA as regards interest rate was anticipated, given soaring inflation. But the timing and magnitude of the lift are likely to be regarded as controversial, given the looming Federal election; not to mention that housing growth may take a hit. This article explains it.

AUD FALLS; COST OF LIVING RISES

The AUD fell against the USD once again, and Aussie households are going to take the hit. The lower the dollar falls, the more upwards pressure it will put on inflation and the cost of living. That’s because the dollar in your pocket doesn’t go as far when you’re buying something made overseas.

HOW WELL-OFF ARE YOU?

How well off you are depends on who you are. In a study prepared for Australian National University’s Tax and Transfer Policy Institute, Peter Abelson, an economist, provide answers for nine dimensions of well-being as they affect the lives of Australia’s Millennials, Gen-Xers, and Baby Boomers.

FIRST HOMEBUYER SCHEME LOSERS?

The Coalition and Labor parties have each produced election policies designed to help low and middle-income earners buy homes. Who is likely to benefit from them and who is likely to suffer is far from obvious. But broadly speaking, both parties’ schemes will hurt buyers and renters. Here’s why.

5 INVESTING CHARTS USEFUL IN UNCERTAIN TIMES

Continuing from last month’s first installment, Chief Economist for AMP, Dr. Shane Oliver, presents the second batch of what he calls ‘the five great charts on investing that are very useful in times of uncertainty like the present.’ Check the first batch of charts in our last month’s issue.

ARE YOU READY FOR THE END OF THE FINANCIAL YEAR?

If you tend not to think about your taxes until they’re already due, you could be causing yourself the unnecessary hassle and may even be missing out on opportunities to boost your refund. The EOFY is still a couple of months away, but you can take action now to help maximise your tax return.

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