Is the share market over valued?
The Australian share market reached new highs last week, even though projected profits of most companies are subdued. So, is the Australian share market over valued? And, if it is, what can retirees do to guard themselves against investment losses?
Not a time to set and forget
Markets have been volatile recently. In the last month alone the Australian share market has fallen around 6%. There’s so much uncertainty now; the Ukraine war, the ongoing Covid pandemic, and now systemic global inflation and rising interest rates.
Markets hate this uncertainty. So, what should retirees be doing to protect their retirement incomes?
Economic update: Market ups and downs
The share market has started 2022 with a fizzle, falling more than 8%. It’s on the back of some concerning economic data. Inflation is higher than expected, which means interest rate increases this year now seem likely, and it appears omicron has dented business confidence.
So, what does this mean for retirees?
Madness of crowds
Recently industry fund Rest announced that it is considering investing its members’ money in cryptocurrency. We think that’s a bad idea. Here are our five reasons why.
Return of Inflation
Return of inflation
The news that inflation grew more than expected in the September quarter has spooked retirees and homebuyers equally. And rightly so; inflation is bad news for retirees who are trying to balance spending today, while being responsible for the future. And for homebuyers, the return of inflation may mean increasing interest rates and mortgage stress.
So, what has caused the inflation spike? And what will happen if prices continue to rise? More importantly, what can pre-retirees and retirees do now to protect themselves from inflation risk?
Why we all need a Plan B
Over the course of our careers we have met thousands of pre-retirees and retirees. During that time, we have observed changing attitudes to retirement.
Today, most of us are planning on working longer; the average age we plan to retire is now 67. And almost all of us want to transition into retirement, reducing our work hours over time.
But foresight may be vain. According to the Australian Bureau of Statistics “Retirement and Retirement Intentions” research, in reality, the average age at retirement is around 55.
Most of us don’t get to choose the timing of our retirement. It’s forced on us by circumstances and that’s why we all need a plan B.