BFS Newsletter: December 2021

December 2021 Newsletter: Close-up image of lights and golden baubles hanging on a Christmas tree.

Welcome to what I expect to be a monthly blog update on all things financial!

As I write this we are hearing of a new Covid variant originating in Southern Africa that is causing more concern around the world with international borders once again restricting or denying entrance and prospects for a fully “open” Christmas here in Australia, definitely receding.

Markets Sensitivity

Financial Markets, of course, are very sensitive to this type of news and we can expect to see a downturn in asset values at the very least over the coming weeks, but we should also consider that the economic fundamentals of Australia, in particular, are actually pretty sound given the resilience shown by larger sectors of the economy through the initial covid challenges.

Of course, there are real exceptions to this with hospitality and travel in particular really struggling with caps on numbers, policing customer adherence to rules and even the total inability to operate at all. Government support has long dried up for these groups and life approaching the second Christmas with “the virus” is very tough indeed.

When it comes to investing, we should remember though that we should only be thinking long term and that dips in the market are normal for many reasons and although human nature makes this difficult to deal with and we feel like we should be running from this and selling out, we should also know that deep down this is the complete opposite of what we should be doing.

Remember that, in the spirit of Black Friday, shares are now on sale! If there is ever a good time to buy, this is it. So if this is right for you, wherever you are invested, you should seriously consider it.

Retirement Preparations

The other thing that I hear a lot is that I am nearing retirement, so I need to be more worried, right? Well actually, no, providing you are invested in accordance with your risk profile and often as we get a little older this is a little more conservative than it would be in your 30s say.

There are many reasons to work with a trusted advisor and this is a very good place to start as I am very surprised often with the degree of financial risk pre-retirees are taking unwittingly in their “default” mysuper investment which many people just stay with for life.

When we think about retirement we should also be considering our drawdown rate with superannuation, how much money we want to live our best life and the extent to which we need this a regular income versus that “big spend” lumps sums for replacing a car, going on holiday etc.

I am also reminded of the Verve’s classic “Bitter Sweet Symphony” where we are all a “slave to money and then we die”. Very appropriate I think…

Here’s to 2022!

Anyway, if we don’t get the chance to speak again before Christmas, I want to take the opportunity to wish you and your family the very best for a fantastic holiday and all the best for a successful and happy 2022!

Baldwin Financial Services is based in the northeastern suburbs of Adelaide.
Contact us to find out how we may be able to help you.