by Jodie | Aug 31, 2015 | Debt Management, Finances, Money
The foundation of how and what we think about money often comes from the environment we were raised in, and our parents own views. We need to be very mindful of what exactly they taught us about money and how this impacts the decisions we make today.
Cast your mind back to your childhood and ponder a few vital questions:
- What did you notice at home when it came to the family finances?
- Did your parents fight constantly about money or was the topic just ignored or never even mentioned?
- Did they teach you lessons like ‘money is the root of all evil’ or ‘money doesn’t grow on trees’ or ‘kids/pets are expensive’?
- Did they live in scarcity, always ‘being on a strict budget’ or having to ‘tighten the belt?’
- Did they live beyond their means or were they extreme savers?
- Did you see them give money away to the homeless or did they actively support any favourite charities?
- How are they around money now?
Can you see any familiar patterns? Are you personally excited, apathetic or pessimistic about money?
It’s time to have a bit of a think about our personal beliefs around money. Where do you think the ideas came from? Some notice early certain thought patters that they don’t agree with and are brave enough to take the step and change mindset, thinking, “I’m going to do things differently!”
And for the really good news; you really do get to choose what you want to believe from now on.
The patterns and beliefs of your parents, were also handed down from their parents, yet each generation can have vastly different circumstances to be raised in. These ideas from your parents don’t have to be your ideas any more. You can choose to challenge the thoughts once you start being aware of where they originally came from.
So, is there one idea you can change that may help your relationship with money?
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by Jodie | Aug 26, 2015 | Australian Economy, Economy
As you’ve probably noticed, markets have been a little choppy of late! You may be wondering what it’s all about. Hopefully, this will give you a basic insight into what’s been going on!
The primary influences for the recent market falls are:
- The Chinese currency devaluation and share market volatility was met with new government policy aimed at managing risk of further decline and managing investor sentiment. Manufacturing data released on Friday suggests these measures have not had the full desired impact to stabilise growth.
- Other emerging economies are now also facing weaker growth, higher interest rates and higher levels of debt.
- If the US raises interest rates for the first time in 9 years this September, emerging economies will be likely to face even more headwinds that will contribute to their effect on global growth.
Recent market activity and what lies ahead are:
- While the markets move to price for weaker growth can be justified and is likely overdue, it is being questioned as to whether this market correction has been more severe than necessary.
- Developed markets are likely to be effected by the emerging markets slowdown (particularly relating to China), but the developed markets are still supported by a number of positive factors and China still has opportunities to support their future growth.
- We do believe there may be softer returns than experienced in previous years, but we do not see this as a market breakdown, it is more a ‘bump in the road’.
If you’d like to know a little more, please click here for the Market Update as prepared by ANZ by clicking here: Market Update 2015_08 Market correction
![Choppy Markets affecting you?]()
by Jodie | Aug 25, 2015 | Economy
Big thanks to Ord Minnett for the following short but sweet look at the current correction going on in Markets:
Stock markets have continued to trade down while bond prices have lifted following heightened fears of a growth slowdown in China. The correction started after China’s sudden devaluation of its currency. At the time, there was enough doubt about China’s motivation behind the move, leaving open the possibility that the adjustment in the currency was simply part of a planned liberalisation of its currency market. But the steady fall in global commodity prices and weak Chinese manufacturing updates have now moved attention and concerns to its economy.
Investors now face the same question they have had to address many times this cycle: is the fall simply a correction in a sustained medium-term bull market, or the beginning of the end of the cycle? For the moment, we are siding with a correction, but in a multi-year rally that is ageing.
Two prominent risk factors could end the economic and risk market cycle: a surge in inflation which requires the Federal Reserve to raise the cash rate more aggressively and to a higher level than currently expected; and an emerging markets debt crisis.
The latest market turmoil was not set off by the Federal Reserve but by worsening growth concerns about emerging markets, and particularly about China. Growth in emerging economies has been disappointing for years now but this time around that weakness is coming on top of a world economy that slowed to below trend in the first half of 2015.
The main threats to risk markets are now that growth stays well below trend, setting off deflationary forces, or worse, that market turmoil feeds on itself and the global economy, which in turn brings about a recession. For the moment, we believe the odds of a global recession remain low, but accept a higher risk of sustained below-trend growth.
The reason we don’t believe it is the end of the cycle is because we do not think Chinese weakness is sufficient to bring about a global recession, and because there remain sufficient supports from cheaper oil, lower bond yields and monetary easing in emerging economies. The latter does require stable currencies and, in turn, a delay by the Federal Reserve in moving on the US cash rate. A continuation of recent market turmoil and falling commodity prices would probably induce such a delay by the Federal Reserve.
