Well, we are in the first stage of a lockdown. Hopefully, this will be enough to flatten the upward trajectory of infections, take the pressure off the health system and keep us all safe. If not, a second stage will likely see most people confined to their homes. This stage was effective in China in stopping the spread (assuming the accuracy of reports) in 2 months or so.
As previously articulated, the economic fallout will be significant in the short term. We feel immensely sad for those that are losing their jobs and businesses and what the immediate future holds for them.
We are very cognizant of the impact it has had on your financial assets. Between us, we have decades of experience in dealing with severe downturns. Although the catalysts are often different human behaviour repeats. We are in a period where market participants are acting irrationally and panic selling. To those sellers, it seems totally rational as they do not believe markets will recover. However, history tells us that they always recover. The current sell-off has been rapid; much faster than the GFC. It is already presenting excellent buying opportunities for those with a 3 year plus time horizon. If markets fall further, it will likely be once in a generation opportunity.
We will discuss with each of you the strategy that best suits. We will be encouraging our clients to allocate some of their defensive allocations to shares in the coming weeks to take advantage of the pending recovery. This will be an individual approach that may not suit everyone
There are many different emotions that Australians will go through; shock, despair, anxiety, depression to name a few. We would like to stress we are always available to take your calls.
Government Announcements
Two of the measures announced include the early release of superannuation for those financially affected by the Coronavirus and temporarily reducing minimum pension payment requirements for retirees.
We have already discussed the early release of Superannuation
Temporary reductions of minimum pension payments
To provide retirees with more flexibility in managing their retirement incomes, the Government has announced it is reducing the minimum pension payment requirement for account-based pensions and similar products by 50% in both 2019-20 and 2020-21.
Reduction of Deeming Rates
Lower rate reduced to 0.25% and the upper rate to 2.25%
Payments to Support Households
An initial payment of $750 to be paid on 31/03/2020 and the second payment to be made around 13/7/2020.
This will be made to all eligible Centrelink and DVA income support recipients and eligible Concession Card Holders.
We will continue to provide updates as they happen. If you have any questions don’t hesitate to contact us.
