Provision Newsletter

2018 – a lot weaker than expected

After the relatively low volatility and solid returns of 2017, the past year has seen almost the complete opposite with high volatility and poor returns. It started strongly in January but started to get messy from February. At a big picture level things were fine: global growth looks to have held solid at around 3.7%, inflation rose in the US but only to target and it remained low elsewhere, the Fed raised interest rates but rates generally remain low and profits rose solidly. But it was the risks below the surface that came together to give a rough ride. There were five big negatives:

• Fear of the Fed. The Fed provided no real surprises and nor did US inflation, but investors became increasingly nervous that Fed hikes would crush US growth and profits.

• US dollar strength. While the US dollar did not rise above its 2016 high it caused problems in the emerging world where US dollar denominated debt is high.

• President Trump’s trade war. This was always a high risk for 2018 and once it got underway it weighed on share markets. While the initial focus seemed to be the US versus everyone it morphed into fears of a new Cold War with China adding to fears about growth and profits.

• China slowdown. This was as expected to around 6.5% as a result of credit tightening but fears that it will combine with the trade war and get worse added to global growth angst.

• Global desynchronisation. US growth was strong, but it slowed in Europe, Japan, China and the emerging world.

Australia saw growth around trend and made it through 27 years without a recession, as infrastructure spending, improving business investment and strong exports helped support growth and this in turn drove strong employment growth, a fall in unemployment and the Federal budget closer to a surplus. Against this though credit conditions tightened significantly with the Royal Commission adding to regulatory pressure on the banks, house prices fell, wages growth edged up but remained weak and inflation remained below target, all of which saw the RBA leave rates on hold.

Overall this drove a volatile and messy investment environment.

Investment returns for major asset classes

* Yr to date to Nov. Source: Thomson Reuters, Morningstar, REIA, AMP Capital

• Global shares saw weak returns in local currency terms with significant corrections around February and October. But this masked positive returns from US shares but weakness elsewhere. Global share returns were boosted on and unhedged basis because the $A fell. 

• Asian and emerging market shares paid the price for being star performers in 2017 with losses thanks to a rising $US causing debt servicing fears, the US trade war posing a threat to growth and political problems in some countries. 

• Australian shares were hit by worries about the banks, consumer spending in the face of falling house prices and weakness in yield-sensitive telcos and utilities offsetting okay profit growth and low interest rates. 

• Government bonds yet again had mediocre returns reflecting low yields and capital losses from rising yields in the US as the Fed hiked. Australian bonds outperformed. 

• Real estate investment trusts remained constrained on the back of Fed tightening and higher bond yields.

• Unlisted commercial property and infrastructure continued to do well as investors sought their still relatively high yields.

• Commodity prices were weak on global growth worries and the oil price had a roller coaster ride, first surging ahead of US sanctions on Iran then crashing as demand fell. 

• Australian house prices fell led by Sydney and Melbourne. 

• Cash and bank term deposit returns were poor reflecting record low RBA interest rates. 

• Reflecting US dollar strength, the $A fell not helped by a falling interest rate differential and lower commodity prices. 

• Reflecting soft returns from most assets, balanced superannuation fund returns were soft.

2019 – better, but volatility to remain high

In a big picture sense, the global economy looks to be going through a mini slowdown like we saw around 2011-12 and 2015-16. This is most evident in business conditions indicators that have slowed but remain okay. See the next chart.  

Source: Bloomberg, IMF, AMP Capital

Like then, this has not been good for listed risk assets like shares but it’s unlikely to be signalling the start of a recession, baring a major external shock. Monetary conditions have tightened globally but they are far from tight unlike prior to the GFC and the normal excesses in the form of high inflation, rapid growth in debt or excessive investment that precede recessions in the US or globally are absent. In fact, to the extent that the softening in growth now underway takes pressure off inflation and results in easier monetary conditions than would otherwise have been the case it’s likely to extend the cycle, ie delay the next recession. The slump in oil prices is a key example of this in that it will take some pressure off inflation and provide a boost to consumer spending. Against this background the key global themes for the year ahead are likely to be:

• Global growth to stabilise and then resynchronise. Global growth is likely to average around 3.5% which is down from 2018 but this is likely to mask slower growth in the first half of the year ahead of some improvement in the second half as China provides a bit more policy stimulus, the Fed pauses in raising interest rates, the fall in currencies against the $US dollar provides a boost to growth outside the US and trade war fears settle down (hopefully). Overall, this should support reasonable global profit growth.

• Global inflation to remain low. With growth dipping back to around or just below trend in the short term and commodity prices down inflation is likely to remain low. The US remains most at risk of higher inflation due to its tight labour market, but various business surveys suggest that US inflation may have peaked for now at around 2%.

• Monetary policy to remain relatively easy. The Fed is likely to have a pause on rate hikes during the first half and maybe hike only twice in 2019 as it gets into the zone that it regards a neutral. Rate hikes from other central banks are a long way away. In fact, further monetary easing is likely in China and the European Central Bank may provide more cheap funding to its banks.

• Geopolitical risk will remain high causing bouts of volatility. The main focus is likely to remain on the US/China relationship and trade will likely be the big one. While Trump is likely to want to find a solution on the trade front before tariffs impact the US economy significantly & threaten his re-election in 2020, it’s not clear that this will occur before the March 1 deadline from the Trump/Xi meeting in Buenos Aires so expect more volatility on this issue. Wider issues including the South China Sea could also flare up along with negotiations around Italy’s budget.

In Australia, strength in infrastructure spending, business investment and export values will help keep the economy growing but it’s likely to be constrained to around 2.5-3% by the housing downturn and a negative wealth effect on consumer spending from falling house prices. This in turn will keep wages growth slow and inflation below target for longer. Against this backdrop the RBA is expected to cut the official cash rate to 1% with two cuts in the second half of 2019.

Implications for investors

With uncertainty likely to remain high around US interest rates, trade and growth, volatility is likely to remain high in 2019 but ultimately reasonable global growth & still easy global monetary policy should drive stronger overall returns than in 2018:

• Global shares could still make new lows early in 2019 (much as occurred in 2016) and volatility is likely to remain high but valuations are now improved and reasonable growth and profits should see a recovery through 2019. 

• Emerging markets are likely to outperform if the $US is more constrained as we expect.

• Australian shares are likely to do okay but with returns constrained to around 8% with moderate earnings growth. Expect the ASX 200 to reach around 6000 by end 2019.

• Low yields are likely to see low returns from bonds.

• Unlisted commercial property and infrastructure are likely to continue benefitting from the search for yield but it’s slowing. 

• National capital city house prices are expected to fall another 5% led again by 10% or so price falls in Sydney and Melbourne as tighter credit, rising supply, reduced foreign demand and potential tax changes under a Labor Government impact. 

• Cash and bank deposits are likely to provide poor returns.

• The $A is likely to see more downside into the high $US0.60s, as the gap between the RBA’s cash rate and the Fed Funds rate goes further into negative.

What to watch?

After the turmoil of 2018, the outlook for 2019 comes with greater than normal uncertainty. The main things to keep an eye on in 2019 are as follows:

• US inflation and the Fed – our base case is that US inflation stabilises around 2% enabling the Fed to pause/go slower, but if it accelerates then it will mean more aggressive tightening, a sharp rebound in bond yields and a much stronger $US which would be bad for emerging markets.

• The US trade war – while it may now be on hold thanks to negotiations with China, Europe and Japan these could go wrong and see it flare up again. US/China tensions generally pose a significant risk for markets.

• Global growth indicators – if we are right growth indicators like the PMI shown in the chart above need to stabilise in the next six months.

• Chinese growth – a continued slowing in China would be a major concern for global growth and commodity prices.

• The property price downturn in Australia – how deep it gets and whether non-mining investment, infrastructure spending and export earnings are able to offset the drag from housing construction and consumer spending.

Source: AMP Capital 6 December 2018

Important notes: While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided.

While global and Australian shares had a nice bounce from their late October lows – rallying about 5%, partly reversing their 10% or so top to bottom fall, they have since fallen back to their lows as the worries about US rates, bond yields, trade, tech stocks, etc, have morphed into broader concerns about global growth and profits. Fears of a credit crunch and falling home prices are probably not helping Australian shares either, which this week dipped below their October low. Our assessment remains that it’s too early to say we have seen the lows, but we remain of the view that it’s not the start of major bear market.

The three bears – correction, gummy & grizzly

Very simply there are 3 types of significant share market falls:

• corrections with falls around 10% (of course these aren’t really bear markets – but some might feel that they are!); 

• “gummy” bear markets with falls around 20% meeting the technical definition many apply for a bear market but where a year after falling 20% the market is up (like in 1998 in the US, 2011 and 2015-16 for Australian & global shares); and

• “grizzly” bear markets where falls are a lot deeper and usually longer lived (like in 1973-74, US and global shares through the tech wreck or the GFC).

I can’t claim the terms “gummy bear” and “grizzly bear” as I first saw them applied by stockbroker Credit Suisse a few years ago. But they are a good way to conceptualise them. Grizzly bears maul investors but gummy bears eventually leave a nicer taste (like the lollies). Corrections are quite normal and healthy as they enable the sharemarket to let off steam and not get too overheated. As can be seen in the next chart, excluding the present episode since 2012 there have been four corrections and one gummy bear market (2015-16) in global and Australian shares. Bear markets generally are a lot less common, but arguably what we saw in 2015-16 was a gummy bear market.

Source: Bloomberg, AMP Capital

The next table shows conventionally defined bear markets in Australian shares since 1900 – where a bear market is a 20% decline that is not fully reversed within 12 months. The first column shows bear markets, the second shows the duration of their falls and the third shows the size of the falls. The fourth shows the percentage change in share prices 12 months after the initial 20% decline. The final column shows whether they are associated with a recession in the US, Australia or both.

Bear markets in Australian shares since 1900 

Based on the All Ords, excepting the ASX 200 for 2015-16. I have defined a bear market as a 20% or greater fall in shares that is not fully reversed within 12 months. Source: Global Financial Data, Bloomberg, AMP Capital

If a gummy bear market is defined by a 20% decline after which the market is higher 12 months later whereas as grizzly bear market sees a continuing decline over the subsequent 12 months after the first 20% decline, then since 1900 there have been 12 gummy bear markets (these are highlighted in black) and there have been six grizzly bear markets (highlighted in red). Several points stand out. First, the gummy bear markets tend to be a bit shorter and see much smaller declines averaging 26% compared to 46% for the grizzly bear markets.

Second, the average rally over 12 months after the initial 20% fall is 15% for the gummy bear markets but it’s a 23% decline for the grizzly bear markets.

Finally, and perhaps most importantly the deeper grizzly bear markets are invariably associated with recession, whereas the milder gummy bear markets including the 1987 share market crash tend not to be. Five of the six grizzly bear markets saw either a US or Australian recession or both whereas less than half of the gummy bear markets saw recession.

It’s also the case that US share market falls are much deeper and longer when there is a US recession.

What’s it likely to be this time?
Our view remains that a grizzly bear market is unlikely because, short of some unforeseeable external shock, a US, global or Australian recession is not imminent. In relation to the US:

• Business and consumer confidence are very high.

• While US monetary conditions have tightened they are not tight and they are still very easy globally and in Australia (with monetary tightening still a fair way off in Europe, Japan and Australia). We are a long way from the sort of monetary tightening that leads into recession.

• Fiscal stimulus is continuing to boost US growth.

• We have not seen the excesses – in terms of debt growth, overinvestment, capacity constraints and inflation – that normally precede recessions in the US, globally or Australia.

Reflecting this, global earnings growth is likely to remain reasonable – albeit slower than it has been – providing underlying support for shares. In relation to Australia – yes housing is turning down and this will weigh on consumer spending, but it will be offset by a lessening drag from mining investment, strengthening non-mining investment, booming infrastructure spending and solid growth in export earnings. Growth is unlikely to be as strong as the RBA is assuming but it’s unlikely to slide into recession either.

So, for all these reasons it’s unlikely the current pull back in shares is the start of a grizzly bear market. However, we have already had a correction in mainstream global shares and Australian shares (with circa 10% falls) and with markets falling again it could turn into gummy bear market, where markets have another 10% or so leg down – a lot of technical damage was done by the October fall that has left investors nervous, the rebound from late October was not particularly convincing and many of the drivers of the October fall are yet to be resolved.

Some positives

However, there are three developments that help add to our conviction that we are not going into a grizzly bear market. First, recent comments by Fed Chair Powell and Vice Chair Clarida indicate that the Fed remains upbeat on the US economy and a December hike looks assured (for now), but it is aware of the risks to US growth from slowing global growth, declining fiscal stimulus next year, the lagged impact of eight interest rate hikes and stock market volatility and appears open to slowing the pace of interest rate hikes or pausing at some point next year. The stabilisation in core inflation around 2% seen lately may support this. Past gummy bear markets (1987, 1998, 2011, 2015-16) all saw some pause or relaxation by the Fed.

Second, while it’s messy after the US/China standoff at the recent APEC forum there have been some positive signs on trade. Talks between the US and China on trade have reportedly resumed ahead of a meeting between President Trump and President Xi at the G20 summit next week and President Trump has repeated that he is optimistic of a trade deal with China and that the US might put any further tariff increases on China on hold if there is progress. The US/China trade dispute is unlikely to be resolved quickly when Trump and Xi meet. Perhaps the best that can be hoped for is agreement to have formal trade talks with the aim of resolving the issues and the US agreeing to delay any further tariff increases. With Trump wanting to get re-elected I remain of the view that some sort of deal will be agreed before the tariffs cause too much damage to the US economy. Rising unemployment (as fiscal stimulus will turn to contraction next year if current and proposed tariffs/taxes on China go ahead) and higher prices at Walmart will sink Trump’s re-election prospects in 2020. Of course, investors are now highly sceptical of any progress on the trade front. So any breakthrough in the next six months could be a big positive.

Finally, while the 30% plunge in the oil price since its October high is a short-term negative for share markets via energy producers, it has the potential to extend the economic cycle as the 2014-16 oil price plunge did. The main drivers of the fall in the oil price are slower global demand growth, US waivers on Iranian sanctions allowing various countries to continue importing Iranian oil, rising US inventories, the rising $US and the cutting of long oil positions. While oil prices are unlikely to fall as much as in 2014-16 when they fell 75% (as OPEC spare capacity is less now) they may stay lower for longer. This is bad for energy companies but maybe not as bad for shale producers as in 2015 as they are now less indebted and their break-even oil price has already been pushed down to $50/barrel or less. It will depress headline inflation (monthly US inflation could be zero in November and December) and if oil stays down long enough it could dampen underlying inflation. All of which may keep rates lower for longer. And its good news for motorists who see rising spending power. For example, Australian petrol prices have plunged from over $1.60 a litre a few weeks ago to below $1.30 in some cities. That’s a saving in the average weekly household petrol bill of around $10.

Source: Bloomberg, MotorMouth, AMP Capital

Source: AMP Capital 22 November 2018

Important notes: While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided.

Women face big challenges when it comes to saving for super. Often they earn less than men and take breaks from work to care for children and parents, all of which plays a role in reducing super contributions and investment earnings.

This can add up to a big difference at retirement. Women nearing retirement (age 55 to 59) have average super balances of $123,642, far short of the minimum $545,000 needed for an individual to retire comfortably¹, compared to the average balance of $237,022 for men. And with women typically living longer than men they may need more in super to pay for an extended retirement.

The good news, no matter where you are in your retirement saving journey, is that you can take action now to build a bigger nest egg and close the yawning super gap between men and women.

Here are some strategies you might want to think about that can help increase your super balances. (As always, check eligibility rules and keep in mind tax and other implications as you consider them.)

• Split contributions with your spouse. It can make sense to redirect some before-tax contributions from the higher-earning spouse to the account of the spouse who earns less. This way, both of you can grow your balances, and you don’t need to find extra money to do it. Your spouse may be eligible for a tax offset for this contribution. This strategy can also reduce taxes at retirement because an individual can have only $1.6 million transferred into a retirement account without paying taxes on earnings, but a couple can have $3.2 million.

• Salary sacrifice. During your working career, you can ask your employer to direct some of your pre-tax pay as an additional concessional contribution to your super account. To tailor your contribution amounts to your personal situation, try this Super Contributions Optimiser.

• Consider after-tax, or non-concessional, contributions. In addition to allowing you to save more, after-tax contributions can make you eligible for a government contribution to your super if you earn less than $52,697 per year before taxes.²

• File your tax return. You need to do this for many reasons, but one is that if your taxable income is $37,000 or less, the government will refund the tax you paid on before-tax contributions, up to $500. This Low Income Superannuation Tax Offset, or LISTO, will happen automatically after you file your return.

• Consolidate your super accounts. Combining multiple super accounts can simplify your financial life and save you money in fees. As you decide which accounts to close, look for reasonable fees, diversify according to your goals and make sure you maintain any insurance you need.

Even small changes can make a big impact. For example, a 20-year-old woman with median earnings of $55,000 could expect to accumulate $570,000 by retirement. If she takes a two-year break at age 30 to raise a child, she would end up with $30,000 less, according to research firm Rice Warner.  But if she contributes just $33 more per week in her twenties, the price of a few cups of Melbourne coffee, she could close that $30,000 gap and still take two years off of work.

Please contact us on |PHONE| if you seek further discussion .

1. According to a study by the Association of Superannuation Funds of Australia (ASFA)
2. Source: https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/super-contributions

Source : Vanguard October 2018

Written by Robin Bowerman, Head of Corporate Affairs at Vanguard

Reproduced with permission of Vanguard Investments Australia Ltd

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients’ circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

© 2018 Vanguard Investments Australia Ltd. All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business, nor our Licensee take any responsibility for any action or any service provided by the author.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page

You may have read about the latest ranking of Australia as one of the best countries for retirees in terms of lifestyle and retirement-income systems. And you may have wondered what such rankings personally mean for you – apart from perhaps making you feel fortunate about where you live.

After all, you are unlikely to move to, say, the Netherlands because it’s retirement-income system ranks as the world’s best.

However, the rankings may prompt you to take measures to improve your chances of a successful retirement lifestyle.

Retirement incomes

First, let’s look at the Melbourne Mercer global pension index 2018, published by Mercer and the Australian Centre for Financial Services. This ranks Australia’s retirement-income system fourth out of the 34 countries assessed, based on adequacy, sustainability and integrity. Australia was given a B while the Netherlands and Denmark received A grades.

A B-rated retirement-income system is described as having a “sound structure with many good features” but, in the words of many school reports, says: There’s room for improvement.

Irrespective of each country’s social, political, historical and economic influences, this report stresses that many of their challenges in dealing with an ageing population are similar. These include encouraging people to work until older ages, setting the level of retirement funding and reducing the” leakage” of retirement savings before retirement.

Although the suggestions of the Global Pension Index are directed mainly at government and the pension/retirement sectors, individuals may pick up useful personal pointers from most of its suggestions. In short, consider taking a personal perspective on this global retirement-income challenge.

Personal pointers may include:

• Think about whether to work until an older age than planned. A longer working life may provide a chance to save more for a shorter, and, therefore, less-costly retirement. And as the report says, working until an older age will limit the impact on retirement savings of increasing longevity. In reality, your ability to work past traditional retirement ages will much depend your personal circumstances including health and employment opportunities.

• Save more in super within Australia’s annual contribution caps. This can include making higher salary-sacrificed contributions if employed. If self-employed, consider making voluntary super contributions, which are not compulsory for the self-employed.

• Aim to repay your debts before retirement. Otherwise, you face repaying that debt with your retirement savings. One of the reasons why Australia has achieved a lower score this year (down from B-plus to B) for its retirement-income system is that the latest Global Pension Index includes pre-retirement household debt in its calculations for the first time.

• Take your super as pension rather than a lump sum upon retirement. This will keep your savings in the concessionally-tax or tax-free super system for longer and, most importantly, make your retirement lifestyle as comfortable as possible for as long as possible. The Global Pension Index suggests that a way to improve Australia’s retirement-income system is to compel super members to take part of their super as a pension.  

As Dr David Knox, a senior partner of Mercer in Australia, comments in the report, retirement income systems around the world are under pressure from ageing populations; low growth and low interest from investments reducing long-term compounding interest; and lack of “easy access” to pension plans (superannuation in Australia) in the gig economy; high government debt in some countries; and high household debt.

In this environment, individuals have more of an incentive to take matters into their own hands to maximise their retirement savings.

Best countries for retirees

The 2018 Best Countries report once again ranks Australia as the world’s second-best country for a comfortable retirement – behind New Zealand and ahead of Switzerland, Spain and Portugal in the top five. This is an annual survey and analysis by US News & World Report, BAV Consulting and the Wharton School at the University of Pennsylvania.

Survey respondents aged over 45 ranked the best countries for retirement on seven attributes: affordability, favourable tax environment, friendliness, “a place I would live”, pleasant climate, respect of property rights and a well-developed public health system. (The survey did not seek views about the adequacy of a country’s retirement-income systems.)

For the main report, more than 21,000 survey participants from around the world were asked to grade 80 countries on a range of factors from quality of life to economic potential. It aims to gauge global perceptions of the countries.

Australia came seventh overall with Switzerland again taking first place. Specific areas where Australia ranks in the top five are: quality of life (Australia fifth), best countries to invest in (Australia sixth – up from 22nd last year) and best countries for a comfortable retirement (Australia second).

Now think about what these findings may mean for you personally. 

Source : Vanguard November 2018 

Written by Robin Bowerman, Head of Corporate Affairs at Vanguard

Reproduced with permission of Vanguard Investments Australia Ltd

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients’ circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

© 2018 Vanguard Investments Australia Ltd. All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business, nor our Licensee take any responsibility for any action or any service provided by the author.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Lenders look at your credit score or credit rating, which appears in your credit report, to work out if they should lend you money or give you credit. Here we explain how your credit score works and what you can do to improve it.

What is a credit score?

Your credit score is a number based on an analysis of your credit file, at a particular point in time, that helps a lender determine your credit worthiness. It is used by credit providers, such as banks and credit unions, to help them decide whether to lend you money, how much they will lend you and may sometimes influence what interest rate is offered to you.

Comprehensive credit reporting and how it’s changing your credit report

From September 2018, the major banks and various credit providers will be putting additional information about the credit products you hold on your credit report. This will give a more complete picture of your credit history.

The new information will include:

• the type of credit products you have held in the last 2 years

• your usual repayment amount

• how often you make your repayments and if you make them by the due date.

You may find that your credit score has changed as a result. See how to get a good credit score for tips on improving your score. 

How is your credit score calculated?

Credit reporting agencies collect your financial and personal information and document it on your credit report. This information is then used to calculate your credit score, which includes:

• Your personal details (such as age and where you live)

• The type of credit providers you have used (e.g. bank or utility company)

• The amount of credit you have borrowed

• The number of credit applications and enquiries you have made

• Any unpaid or overdue loans or credit

• Any debt agreements or personal insolvency agreements relating to bankruptcy

What does my credit rating mean?

Depending on the credit reporting agency used to calculate your score, it will be a number between zero and 1,200 or zero and 1,000.

The number is rated on a five-point scale (excellent, very good, good, average and below average). The position of your credit score on this scale helps lenders work out how risky it is for them to lend to you: 

• Excellent – you are highly unlikely to have any adverse events harming your credit score in the next 12 months

• Very good – you are unlikely to have an adverse event in the next 12 months

• Good – you are less likely to experience an adverse event on your credit report in the next year

• Average – you are likely to experience an adverse event in the next year

• Below average – you are more likely to have an adverse event being listed on your credit report in the next year

How to find out your credit score for free

You can get a free credit score from a number of online providers. The results may vary depending on which credit reporting agency is used. The following websites offer a free credit rating:

• Creditsavvy (Experian score)

• Credit Simple (illion, formerly know as Dun and Bradstreet score)

• Finder (Experian score)

• Getcreditscore (Equifax score)

• WisrCredit (Equifax and Experian score)

You may need to check with more than one credit score provider to get a consistent and reliable measure of your credit rating.

Your credit score is dynamic, meaning it may change from month to month as your financial circumstances change. 

 Checking your credit rating can protect you from fraud

You should check your credit rating and report to ensure your information is correct and that all the enquiries and listings on the report have been made by you. Criminals can steal your identity and take out credit in your name so checking the accuracy of your credit report is important. See credit reports for more information on how to check your credit history. 

How to get a good credit score

Your credit score can increase or decrease over time depending on the information contained in your credit report. Your score can change even if your financial habits haven’t. This could be due to a number of factors including:

• applying for a new loan or credit card

• a listing on your credit report expiring

• a change to your credit limit on an existing loan or credit account

• new information from a creditor

• closing a loan or credit card account

• late repayments

Improving your credit rating starts with looking at your current financial situation and looking for ways to improve it. As your financial circumstances improve your credit rating will improve. Getting into a good credit position before you next apply for a loan can help increase the likelihood of you getting approved.

You can improve your credit score by:

• lowering your credit card limits

• consolidating multiple personal loans and/or credit cards

• limiting your applications for credit 

• making your repayments on time

• paying your rent and bills on time

• paying your mortgage and other loans on time

• paying your credit card off in full each month

Credit scores help lenders decide if they should lend money to you. Knowing your credit score can help you to negotiate a better deal with your bank or find an alternative lender that will reward your good credit history.

Please contact us on |PHONE| if you seek  further discussion on this topic. 

Source : ASIC’s MoneySmart November 2018 

Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://www.moneysmart.gov.au/borrowing-and-credit/borrowing-basics/credit-scores

Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.

Important
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business, nor our Licensee take any responsibility for any action or any service provided by the author.

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Credit: Tourism Western Australia 

In the words of Captain Obvious, Australia provides some amazing experiences.

What the captain fails to mention, though, is that this wealth of remarkable attractions means some truly incredible experiences are often overlooked.

We thought it was high time to change that, so we put together this superb line-up of underrated Australian activities.

From the easily reached and the inexpensive to the once in a lifetime, exciting adventures await.

Credit: SATC/Adam Bruzzone

Exploring Torndirrup National Park, Albany, WA

Sure, Australia teems with treasure-rich national parks that all jostle for attention, but Torndirrup clearly deserves far more footprints than it receives.

It’s massively mesmering: rugged and windswept and crammed with eye-popping, funky features. Among the most impressive is The Gap where the full force of the ocean’s wild fury is laid bare in dramatic fashion. And it’s all easily admired from a raised viewing platform.

Book now: BIG4 Emu Beach Holiday Park or BIG4 Middleton Beach Holiday Park.

Climbing the Shot Tower, Hobart, TAS

Found 10km south of the CBD, the Shot Tower was once tasked with manufacturing ammunition. Today, it’s in the firing line of visitors seeking spectacular panoramic vistas.

The structure has a few quirks that enhance the interest, including a sign that proclaims it took eight months to build when the actual figure is more like eight years. Its height is another point of contention.

Book now: BIG4 Hobart Airport Tourist Park.

Fake news? The sign heralding the eight-month completion of the Shot Tower.

Credit: Tourism Tasmania/Kathryn Leahy

Wandering around Umpherston Sinkhole, Mt Gambier, SA

Nature has moulded a wonderful creation, with a little help from humanity. In a former life the sinkhole was a limestone cave before relentless corrosion from seawater resulted in its roof collapsing.

It has since become a spectacular sunken garden with a size and scale that is only truly appreciated with a first-hand visit. Better yet, it’s centrally located and open day and night.

Book now: BIG4 Blue Lake Holiday Park.

Sinking feeling: descend into the depths of Umpherston Sinkhole to appreciate its mammoth size and scale.

An airboat tour of Mary River wetlands, NT

Spotted on the fringes of Kakadu National Park, the wetlands of Mary River are home to a feast of fascinating flora and fauna, including crocs. And witnessing it all while on an airboat is unbeatable.

It’s an exhilarating experience that provides unparalleled access to a mind-blowing section of the Top End. If you’re lucky, your friendly guide will be armed with intimate knowledge of these action-packed surrounds.

Book now: BIG4 Howard Springs Holiday Park.

Strap in for a thrilling ride aboard an airboat.

Swimming at Blue Pool, Bermagui, NSW

Move over Bondi Beach’s Iceberg Pool; Bermagui’s Blue Pool is every bit as alluring. Found in the South Coast NSW region, this natural pool (well, sort of natural) is a prized place for a refreshing swim.

The backdrop of craggy, towering cliffs only adds to the occasion, while the sparkling coastal views afforded from this vantage point are worth a visit alone. Best of all, this experience won’t cost you a cent.

Book now: BIG4 Wallaga Lake Holiday Park.

Blue Pool is a gem of the South Coast NSW region.

Credit: Destination NSW

Delving into the SS Yongala wreck, Ayr, QLD

Admittedly, this site earns much attention – thousands head underwater each year for a diving experience regarded as one of Australia’s best. Yet how many of us can honestly say we know the doomed ship’s backstory? It’s not exactly Titanic like, but details of how the SS Yongala ended up on the sea floor are thoroughly captivating.

Dive tours depart from Ayr and provide an eerie, incredible experience where you’ll be joined by a wealth of magical marine life. Or relive the fascinating yarn at the Townsville Maritime Museum.

Book now: BIG4 Ayr Silver Link Caravan Village or BIG4 Townsville Woodlands Holiday Park.

The backstory of SS Yongala is captivating.

Credit: Yongala Dive

Wander around historical Clunes, Goldfields region, VIC

Although this isn’t the only place in Australia that could claim to be forgotten by time, it certainly seems to be overlooked by the masses. A wander along this old gold-mining town’s main street is like a trip down memory lane – ignore the modern cars – with a streetscape that appears untouched since its creation.

In fact, Clunes is regarded as having the finest collection of 19th century buildings anywhere in Australia, which helps to easily evoke thoughts that you’ve travelled back a century or so. Charming.

Book now: BIG4 parks in the Goldfields region.

Clunes generally only bustles like this for its annual Booktown Festival, held in May.

Touring Coober Pedy, SA

The opal-mining town is hardly a spotlight avoider, but you get the feeling its unique nature warrants more attention. Simply put, Coober Pedy is absolutely mesmerising and a destination that every Australian should experience at least once.

It’s well-known that much of its infrastructure has been built underground so locals can avoid the heat, and it makes for a super interesting and incomparable visit from the moment you enter town. The incredible landscapes in and around Coober Pedy only add to an extremely memorable experience.

Book now: BIG4 Stuart Range Outback Resort.

 

The landscapes in and around Coober Pedy are jaw-dropping.

Source : BIG4 Holiday Park November 2018

Reproduced with the permission of BIG4 Holiday Parks. This article first appeared on BIG4.com.au  and was republished with permission.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business, nor our Licensee take any responsibility for any action or any service provided by the author.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.