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NAVIGATING 2025: Volatility Breeds Opportunity
Markets have started the year on a turbulent note, with TRUMP’S 25% TARIFF ON AUSTRALIAN STEEL AND ALUMINIUM adding to global uncertainty. The S&P/ASX 200 HAS DROPPED 8.1%, THE NASDAQ IS DOWN 15%, AND THE S&P 500 HAS FALLEN 8.3% IN JUST FOUR WEEKS. While these declines may seem alarming, history tells us that such corrections often present prime buying.
Rather than panic, smart investors take a measured approachaveraging into quality assets at depressed prices
What’s
Driving Market Volatility?
The return of Trump and his aggressive trade stance has sparked concerns, while rising interest rates, inflationary pressures, and ongoing geopolitical tensions – including the war in Ukraine-have compounded uncertainty.
Despite short-term turbulence, market fundamentals remain strong. Sharp corrections create opportunities for those willing to stay disciplined and invest strategically
1. Fixed Interest & Private Credit: With higher interest rates driving attractive yields, private credit and fixed interest now offer compelling risk-adjusted returns. These income-generating investments provide stability in volatile times
2. Global & Local Equities: The sell off has created a buying opportunity in high-quality sectors such as Technology, IT services, gold, and core market indexes. Averaging in gradually ensures investors capture the upside when markets recover.
Regular Reviews: Staying on Course
Market downturns aren’t a time to retreat – they’re a time to fine-tune your strategy. My 40+ years in investment management have shown that those who review, rebalance, and adjust their portfolios outperform in the long run.
Now is the time to position for recovery, not sit on the sidelines. Whether it’s leveraging depressed prices in equities or securing stable income through fixed interest, we’ll ensure your portfolio remains aligned with your long-term goals.
Let’s discuss your strategy at your next review – uncertainty creates opportunity, if you know where to look.
FAMILIA WEALTH UPDATE: What’s happening Anika?
Happy New Year!
As we step into 2025, we want to take a moment to update you on some of the key developments at Familia Wealth and thank you for your continued trust in our services.
The transition from Xplore to Hub24 is well underway, and for those of you already using the new platform, we hope you’re enjoying the benefits. Hub24 has truly been a game changer in terms of transparency, reporting, and ease of use. Hub24 provides a more streamlined experience, making it easier to access and manage your investments. If you have any questions or need assistance navigating Hub24, please don’t hesitate to reach out.
We are also in the final stages of updating all SMSF Trust Deeds and Investment Strategies, ensuring that everything remains compliant and aligned with your financial goals. We appreciate your patience throughout this process, and
we’ll continue to keep you informed as we finalise these updates.
On a personal note, I’m pleased to share that I have now been back working with Wayne as his Practice and Client Service Manager for 18 months. It has been a fantastic experience reconnecting with many of you, and I truly enjoy assisting you with all your service requests. Whether you need help with administrative matters, investment queries, or general support, I’m always here – so please feel free to call anytime.
We look forward to another great year supporting you on your financial journey. Stay tuned for more updates, and as always, we appreciate the opportunity to work with you.
Australian Government ELECTION & MARKET OUTLOOK
As we approach the Australian Government election, which must be called in the next three months with mid-April being most likely, expect short-term volatility, due to potential policy changes.
If the incumbents remain in power (albeit with the help of the independents), we can expect a continuation of their current policies, particularly around superannuation, taxation, and infrastructure investment.
On the other hand, if Peter Dutton and the Coalition win government, we may see a shift towards lower corporate taxes, deregulation, and policies
OMG more legislation...
favouring traditional energy sectors. This could be viewed positively by the resources, banking, and business sectors, potentially leading to a more probusiness environment that could drive market confidence.
Regardless of the election outcome, markets will react to certainty and policy clarity rather than speculation. Prepare for potential short-term fluctuations but remain focused on their long-term financial strategies. If you have any concerns about how the election could impact your portfolio, feel free to reach out– we’re here to help you navigate these changes with confidence.
SUPERANNUATION CHANGES: Unlocking New Opportunities
The past seven years have seen major superannuation reforms, creating fresh opportunities to boost retirement savings and optimise tax efficiency.
From higher contribution caps and catch-up concessional contributions to downsizer super rules and flexible work test exemptions, these changes allow greater control over wealth accumulation.
nNew Contribution Limits
– Higher caps mean more tax-effective savings.
nCarry-Forward Concessional Contributions
– Catch up on unused limits to reduce tax.
nWork Test Removed for 67-75s
– Make non-concessional contributions without restrictions.
nDownsizer Contributions Expanded
– Inject home sale proceeds into super tax-free.
nFirst Home Super Saver Scheme (FHSSS) Enhancements
– Save for a deposit in a tax-friendly way.
These updates open the door to smarter wealth-building strategies. Want to know how to make them work for you? Contact us.
Property Settlement Reforms: Effective from June 10, 2025, amendments to the Family Law Act 1975 alter how courts determine property settlements, including considerations of the economic impact of family violence. These changes seek to provide fairer outcomes for separating couples by acknowledging the financial ramifications of abuse.
FOCUS TOPIC
AGED CARE FEES for Self-Funded Retirees
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A major shift is coming to Australia’s aged care system, with the introduction of a new AGED CARE ACT set to take effect from JULY 1, 2025. This will mark the third major rewrite of aged care legislation since 1997, following significant reforms in 2014.
The new law is designed to refocus aged care on the individual, rather than simply regulating how service providers receive government subsidies. However, these changes will have important financial implications –especially for self-funded retirees and high-net-worth individuals.
FINAL THOUGHTS
Aged care planning is no longer just a concern for the elderly – it’s a key financial planning issue that should be addressed early. The new Aged Care Act of 2025 introduces complex rule changes that could result in higher fees for self-funded retirees, making it crucial to have a proactive strategy.