Dear Sir/Madam,

I think I can quite confidently say that most of us cannot see the back of 2020 quick enough! What a year. There are not enough superlatives in the English language to describe what the world has just experienced. Who would have thought this time last year we were about to have the normal freedoms of life we took for granted, removed and replaced with the restrictions we've all had to endure. 

With a vaccine now appearing to be a reality, we can look forward with hope to a slow but steady return to normal commencing in 2021. Like you I do wonder what the permanent ramifications will be as a result of COVID-19. Does no handshaking, no hugging and social distancing remain as the norm? Will there be long-term limitations on numbers attending venues? Will the State Premiers now routinely open and close borders? When will overseas travel return to normal?  I guess only time will tell.


Politically it’s been a year of frantic global response to the coronavirus both economically and medically. In Australia the government abandoned its target of budgetary surplus and instead embarked on the largest economic stimulus program in history to underwrite the Australian workforce and small business.  The banks deferred mortgages.  The Federal Government printed money and became the overnight employer of millions of people via Jobkeeper.  Instalment taxation of small business was deferred or waived. Unprecedented actions to stave off depression in Australia.  It appears they have succeeded with the announcement by Treasurer Josh Frydenberg on 2 December that Australia is officially already out of the first recession we've seen in nearly 30 years. The measures taken by Government have stabilised the economy so far. However, there will be more difficult times ahead in 2021 especially with unemployment. The government now has the very difficult task of weaning off small businesses and affected employees from the substantial government handouts. There will be many industries and small businesses at risk of failure when it does so. In particular we think of our Qantas staff clients whose careers are still uncertain. At least with the national border restrictions starting to ease, there will be a slow but sure return to operations internally in Australia.


Internationally, trade partnerships have been strained. It is no secret that Australian – China and US – China relations are combative at the moment. The world is looking for blame and China is in the firing line. China appears to be taking the view that the best form of defence is offence and this has led to unilateral trade embargoes, huge tariffs on some Australian exports, arrests of Australian journalists, social media posting of inflammatory images about Australian soldier violence and mounting political tensions between Australia and China - our largest trading partner.


The end of this tumultuous year has been marked with the US elections and the deafening noise from Trump and Biden. The US election pathway has in many ways been nothing more than a sideshow and a disappointing spectacle not befitting of the office of the leader of the free world. The US is now deeply divided internally and needs to heal. Maybe Biden can find a way to reunite his broken country.  He has a huge task ahead.


It has been quite fascinating for us to watch the movement and response of the global sharemarkets. There was a very severe drop in market values around the world in March when the pandemic took hold and governments moved to lockdown their people and close business. The market fell almost 40% in most countries. Today, some 9 months down the track, the stock markets have recovered most of this 40%. Given that many industries and businesses remain closed, it is difficult to make sense of how this recovery could have taken place so quickly. The GFC falls in value took 14 years to recover but this COVID-19 driven market fall has taken just 9 months! Investors have obviously been quite bullish and optimistic about the impact of all the government stimulus around the world and future prospects. They have been bargain seeking and buying which has driven the sharemarket up. Investors are turning to the markets, volatile as they are, for investment return given that the cash rate around the world is around zero now and will be for some time. We are cautiously optimistic that you will continue to see positive returns in your portfolio in 2021 provided that the vaccine is released, COVID-19 new cases fall, travel recommences, borders open, political tensions ease, restrictions lift and the world re-emerges from the cave and returns to some form of normality.


We are of the view that the residential and commercial property industry in Australia will experience a downturn over the next few years for a number of reasons. This will be particularly acute for owners of commercial property and apartments in Sydney and Melbourne CBDs.  Currently, however, the residential Property market is very buoyant and achieving record sale prices. We expect this current positive market will soften and decline in many areas mid next year around the time when government and banking support ends.


Chrysalis News


After 3.5 years with Chrysalis, Dani has decided to leave the firm and pursue her interests in the health industry. We want to thank Dani for her wonderful contribution to Chrysalis and wish her every success in her new life chapter. We are recruiting now for Dani's replacement and will introduce that person to you soon.


As we farewell our very special Client Service Manager, Janet who is retiring at the end of this year, we want to introduce and welcome Kate Cruickshank who will now take up the responsibility of Client Service Manager for Chrysalis. Kate has an extensive background in Financial Planning back office management and brings a wealth of knowledge and experience with her to the role. We look forward to introducing her to you in person. Kate will be instrumental in supporting Chrysalis‘ future growth.


We have new services, new staff and new initiatives coming your way next year. Stay tuned!


So as this year comes to a close and with it one of the most tumultuous years on record, we send our collective best wishes to you and your family for a very safe, healthy and relaxing Christmas. We look forward to sharing what we hope will be a much better 2021 with you. From your entire Chrysalis Team, Merry Christmas 🎄


Chrysalis Lifestyle Planning

Chrysalis Advice team

Chrysalis Lifestyle Planning


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