Dear Sir/Madam,


Welcome to a very chilly Winter 2014 edition of your Chrysalis Newsletter.  It appears we are having one of the coldest winters we have seen in some years in Australia.  I have just returned from a Licensee conference in NZ and when you see the Kiwi ski resorts with half the snow base we have here in Australia you know someone has opened the freezer door this year!

 
Last newsletter I wrote about the conflict in the Ukraine.  Since then we have witnessed the horror of MH17 being shot down in the Ukraine and the mobilisation of Isis in Iraq and the ensuing possibility of Genocide.  Why can't people get along together? What world am I bringing my children into?  It's hard to not be affected and disheartened by the events of our world.  Interestingly, markets haven't and often don't typically get dramatically affected for any lasting period with Geopolitical crisis such as these. Our Australian market is currently at virtually the highest point it has been since the GFC recovery began.
 
According to Felix Stephen, a well respected expert on economic matters and Head of Research & Strategy for Advance Asset Management, we are still in period of the cycle where shares and property are in favour, but not all of them!  The Australian economy grew stronger than predicted for the financial year. The US is tapering back their stimulus and this program is due for completion in October 2014 at which time the US economy will be again standing on its own two feet.  Interest rates are expected to remain at their current record low levels for the foreseeable future in Australia.  China is making a concerted effort to slow down its economy which will impact Australian exports in the short to medium term and have a flow on effect on our economy.  Europe appears to no longer be on the 'brink' of EU collapse and a slow recovery is well underway led by the Germans.  The European Central Bank President, Mario Draghi, has said he is prepared to inject further significant stimulus money into the European banks as and when needed to do 'Whatever it takes' to restart the Euro engine.  He has now been given the nickname of 'Super Mario' and is highly revered for his very proactive stance in saving the EU.  There are some new regions attracting economic attention as potential new 'players' in contributing positively to the world economy like Africa and Cambodia.  Time will tell as to whether they can succeed given their respective political instability.
 
Whilst there are certainly many headwinds before us such as exchange rates, unemployment too high in certain countries, slower economic growth in China, wars and political tensions; a well diversified and managed portfolio of investments across a broad range of asset classes can help manage these risks and is tipped to deliver a healthy high single digit return this financial year according to Felix Stephen.
 
Hopefully you received our email a few weeks ago in relation to changes to the Centrelink Age Pension assessment from 1 January 2015.  This will have a significant negative impact on many people hoping to receive the Age Pension at some point in their life.  If you know anyone over 65 particularly who has not yet started an allocated pension please send them our email or pass our number to them to call as there are actions that can be taken pre Jan 2015 which will lock in the old more generous rules for the rest of their lifetime.
 
We look forward to meeting up with you in person at our next review and as always invite you to call or email if you have any questions we can help you with.
 
All the very best from your Chrysalis Team.

Chrysalis Lifestyle Planning

Chrysalis Advice team

Chrysalis Lifestyle Planning

Website: www.chrysalislp.com.au

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