Dear Sir/Madam,

Dear Sir/Madam,

With three more months quickly past us already this year it's a good time to update you with the latest snapshot of what's going on out there.

2017 has started strongly for markets. They really like Donald Trump even if people don't! The Australian stock market is up 11% since the November US elections. In Australia we are about to break through our highest point since the GFC which has its 10 year anniversary this year. Can you believe that?!  I have just returned from a licensee conference and economic forum in Japan. Japan is making very strong inroads into co ownership with insurance companies and funds management in Australia. So stay tuned for a more Japanese influence on some of the big names in the Australian Financial industry. Interestingly they are saying the similar things in Japan that we are hearing in Australia. We are expecting a positive year for share markets around the globe this year and some decent returns but no records will be broken. So your portfolio should do well in this environment. It will come down to fund manager expertise as to just how well Australian investors do overall as it is a complex and turbulent investing environment out there at the moment.  Prices for shares look expensive or fully valued both here and around the world so there are no cheap tickets. Good returns will come from companies that continue to grow in this difficult economic environment to be in business.

Some of the very large industry funds and retail super funds are going to find it increasingly tough from here to deliver solid returns as they are now getting too big to move around without affecting the entire market.

I get asked a lot about what is the state of play with property and what is my forecast. It is clear from all the presentations we listen to that property is a significant concern now for both individuals, share markets and now the Federal  Government. In a recent publication I read from global bond manager, PIMCO, the following statement was made about property prices and Australian interest rates.....

"Looking forward, we believe the current economic backdrop accompanied by some recent increases in mortgage rates by the Australian banks will keep the RBA on the sidelines for all of 2017. We also expect increasing reliance on macro-prudential policies to limit the upside in property prices. While housing has definitely helped support the economy over the past four to five years, any further increases in house prices that are in excess of wage growth will represent potential systemic risks for the economy."

You will hear a lot in the media and increasingly more from the government about various measures to slow down the property market pricing frenzy and attempts to make home ownership more affordable. Stay tuned for more on that in the May Federal Budget from Prime Minister Turnbull. We expect the pricing boom to slow down and probably reverse on properties particularly in Sydney and Melbourne in the coming months as more and more is done to address the housing crisis. I read the other day that Toronto, Canada and Sydney currently have the two most unaffordable rates of rise of property prices in the world! This is not sustainable nor is it in the national best interest so you can expect to see property cycles changing soon.

In the office we still have Jo Wihongi on maternity leave until late July. She is having a great time with her new little daughter. We are also in the process of recruiting additional administration resources and financial advisers as Chrysalis continues to grow and we strive to focus on maintaining a high level of service to you. I will be on the road this year trying to do some road trips to visit clients at distance and keep you all informed. Thank you too for your patience and understanding if you were part of the transition across to Macquarie for administration of your investment. The teething problems appear to be all but behind us now. Please let us know if you are experiencing any issues that need attention as we will be straight onto this for you.

This year will be very busy in June regarding superannuation contributions. This year marks the end of a fairly decent opportunity for everybody to take advantage of the generous old contribution rules. From July 1st the government is reducing amounts of money that can go into super each year. So please try to get any super requirements you have to us by early June so that they are definitely recorded this financial year. Please contact us if you want more information on what these opportunities are for you.

All our best wishes to you and your family as we approach Easter. We look forward to catching up with you in person very soon.

Chrysalis Lifestyle Planning

Chrysalis Advice team

Chrysalis Lifestyle Planning


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