Messages from Hudson

Friday, December 21, 2018
Messages from Hudson

Phillip McGann - Hudson General Manager/Adviser

What Have I Learned This Year?

Unexpected movements in markets are no reason to divert from a long term plan.  Just because markets don't behave exactly how we think they should - in the short term - is not a reason to change long term plans.  Markets are volatile day to day but with a long term plan carefully put into place can provide the longer term result that you are seeking  Have patience!

Last Year’s Prediction

More improvement in local share prices as the re-rating of the Australian market gathers pace.    Well I was right up until about 8 weeks ago!   I must have left the date range off my prediction from last year! 

Prediction(s) for Next Year 

No (official RBA) rate rises (maybe even a cut!) but tighter bank credit / lending conditions leading to the same result if there had of been rate rises.  A messy Brexit in March but no long term major catastrophes - think Y2K not 911. Share market to recover into the final stages of the current bull market. 

Final Word for 2018 

Thanks to all of our valued Hudson Members.  

The bottom line is we have no business without your continued support and we truly value the relationship.

I look forward to again assisting members to achieve their long term financial goals in 2019 and beyond.


Ivan Fletcher - Adviser

What Have I Learned this Year?

Managing change is important (just ask the prime Minister of the UK Theresa May).  Details matter. Banks now want to know more about your personal budget before lending you money (they never asked before).  The Web of avenues in and out of super is more complex than ever before and requires more planning to get the best out of what is still a huge long term tax shelter for Australians.  More than ever, planning and preparing for retirement, near or far, is critical to optimising your circumstances.   

Last Year’s Prediction

Trump led USA tax cuts will get through and this will keep the fuel up to the worlds largest economy.“  
Well for two thirds of the calendar year this was absolutely true and in September and October the share markets took it all back.  Anyone familiar with the phrase “up the stairs and down the elevator”?  “Snakes and Ladders” is another analog; both provide a succinct summary of 2018 share markets.  Todays share prices are pretty close to where they were 12 months ago.

“There could be a round of Australians breaching the new and reduced $25,000 Concessional Contribution CAP (because they have not altered path from the $35,000 CAP in 2016/17).”  I’m happy to say that I have not seen too much of this occurrence for Hudson clients.

Prediction for Next Year

For two years now the rhetoric around RBA interest rate discussions has been focused on ‘how long will it be before we get the first RBA induced rate rise’? 
Next year this rhetoric may start to include the prospect of a rate cut.  Does not mean we will necessarily have one – but the chatter on the subject is likely to increase if we do not see higher inflation numbers, especially around wages growth. 

The other prediction is political ‘YES’.  Watch both Australia’s large political parties chirp YES to anything and everything in the hunt to secure votes (Irrespective of previous messages by current or former leaders).  I don’t expect too much to happen between now and the election as focus will be on publicity and the current government is hamstrung to achieve much before hand. Either way the country needs a clear winner in the next election.

Final Word for 2018

If you are receiving December statements from super funds this summer, remind yourself that volatility in share markets is ‘normal’ even though it may feel like we haven had it for some time.   ‘Attitude for Gratitude’ might be the order of the day the share market has been in pretty good shape for many years now. 

Remember to celebrate as often as you can find a reason to. To all Hudson members I wish you a safe and happy time with your loved ones.  As always but especially this time of year, if you see someone without a smile, give them one of yours.


Michal Park - Adviser

What Have I Learned this Year?

That things can turn on a dime – and last years winner can very quickly fall from grace.

That even though specific risks can be known and even factored into share markets, they can still create havoc in financial markets – case in point, geopolitical risks like Brexit and trade tensions, rising US interest rates and…Trump.

Last Year’s Prediction

Rates in Australia will stay on hold or be cut on the back of a sluggish economy, zero wages growth and weakening consumer demand.

International growth will continue due to strengthening economies, lower unemployment and greater consumer confidence.

Cash rates have indeed stayed on hold at 1.5% for 28 consecutive months now.  While there has been some lift in wages growth (which will be the trigger for the RBA to hike rates), I believe cash rates will stay steady for at least the next 12 months.

Prediction for Next Year

The lack of available credit will start to bite, leading banking restrictions to ease somewhat in 2019 (that could possibly be more a hope than a prediction).

Emerging markets will be the sector to watch.

Final Word for 2018

“The best laid plans of mice and men often go awry” - adapted by a line in “To a Mouse” by Robert Burns.  (An alternative to this quote is Woody Allen’s “If you want to make God laugh, tell him about your plans”, but it didn’t seem quite as intellectual). These words have had significant meaning for me this year and I’m sure many Hudson members have also had carefully constructed plans fall by the wayside for one reason or another.  What I have struggled to learn is to embrace the change and work with it – not against it.  A change of plans could actually be the best way forward!

Oh, and take up yoga ;)


Kris Wrenn - Adviser

What Have I Learned this Year?

It’s fair to say that the fall in the sharemarket over the last three to four months has affected most people. What’s been interesting to me is how differently many have responded. Sadly I have heard stories of “knee-jerk” reactions. On the other hand I have had several Hudson members make a point of telling me that despite how the market is tracking they feel reassured by the long term plan we have in place. It’s a reminder of why you need diversification in your portfolio, especially for those that rely on their portfolios to create a source of income.

Last Year’s Prediction

"I'm hoping for a marked acceleration in Australia's mining sector off the back of global economic growth and rising commodity prices" 

Outcome - refer to the following charts provided by the RBA:

So "Growth", not so much, but commodity prices overall have been strong.

Prediction for Next Year

I'm very optimistic about the domestic sharemarket! It has been a terrible few months and the effects of it will quite possibly result in almost no growth for the 2018 calendar year. We saw something similar in both 2012 and 2016 following a strong previous couple of years. To see two consecutive poor years however we have to go back to the GFC, when for me there were fundamental economic reasons for a sustained downturn. I think we will look back on 2018 as being a "healthy" and necessary correction, but ultimately short-lived.

Final word for 2018

Kudos to everyone who has stayed the course during all the recent doom and gloom. If you have an appropriate plan in place you can weather any storm! To all Hudson members, I wish you a very Merry Xmas and all the best heading into 2019. 


Matthew Kerr – Finance Manager

What Have I Learned this Year?

That even though Australia has a strong, profitable and highly regulated banking system with a home loan arrears rate of just over 1% , we continue to tinker with it in the belief that there are major issues.  If you dig hard enough you will find problems in any industry.

Prediction for Next Year

Commonsense will somewhat prevail in the findings of the Royal Commission and banks can get back to what they do best and that is lending money to those that fit in their relative risk models.  

Final Word for 2018

It has been a big year for changes in the banking world and banks have been tightening up their lending policies harder than ever before.  I have spoken to more members than ever that want to borrow money but can't.  Don't think that it will be this hard over the next 12 months.  

Have a safe and happy Xmas and enjoy some down time.  For me, I'll be doing plenty of fishing, watching plenty of cricket and enjoying a refreshing beverage or two.


Feedback

David Wilson commented on 22-Dec-2018 09:04 AM
To All at Hudson,

Have a great Xmas and New Year. To my Advisor-Michal, thankyou for for no nonsense advice. Look forward to chatting in the New Year.

Kind Regards
David & Melinda

Post your comments or feedback




Captcha Image

Do you have a
'Dear Adviser' question?

Ask a question
Get in touch with Hudson and one of our advisers may be able to answer your question.

Ask our advisers now

Issues by month/year

May-2017-(C)

June-2017-(C)

June-2016-(C)

Insurance

February-2017-(C)

February-2016-(C)

December-2017-(C)

August-2016-(C)

2019-05-31

2019-04-30

2019-03-29

2019-03-01

2019-02-01

2018-12-21

2018-11-30

2018-10-26

2018-09-28

2018-08-31

2018-07-27

2018-06-29

2018-05-25

2018-04-27

2018-03-30

2018-02-23

2018-01-26

2017-12-15

2017-11-24

2017-10-27

2017-09-29

2017-08-25

2017-07-28

2017-06-30

2017-05-26

2017-04-28

2017-03-31

2017-02-24

2017-02-16

2017-01-27

2016-12-16

2016-11-30

2016-11-18

2016-11-11

2016-11-04

2016-10-28

2016-10-21

2016-10-14

2016-10-07

2016-09-30

2016-09-23

2016-09-16

2016-09-09

2016-09-02

2016-08-26

2016-08-19

2016-08-12

2016-08-05

2016-07-29

2016-07-22

2016-07-15

2016-07-08

2016-07-01

2016-06-24

2016-06-17

2016-06-10

2016-06-03

2016-05-27

2016-05-20

2016-05-13

2016-05-06

2016-04-29

2016-04-22

2016-04-15

2016-04-08

2016-04-01

2016-03-25

2016-03-18

2016-03-11

2016-03-04

2016-02-26

2016-02-19

2016-02-12

2016-02-05

2016-01-29

2015-12-04

2015-11-27

2015-11-20

2015-11-13

2015-11-06

2015-10-30

2015-10-16

2015-10-09

2015-10-02

2015-09-25

2015-09-18

2015-09-11

2015-09-04

2015-08-28

2015-08-21

2015-08-14

2015-08-07

2015-07-31

2015-07-24

2015-07-17

2015-07-10

2015-07-03

2015-06-26

2015-06-19

2015-06-12

2015-06-05

2015-06-02

2015-05-29

2015-05-22

2015-05-15

2015-05-08

2015-05-01

2015-04-17

2015-04-10

2015-04-03

2015-03-27

2015-03-20

2015-03-13

2015-03-06

2015-02-27

2015-02-20

2015-02-13

2015-01-30

Topics


Search all issues

Enjoy reading the Hudson Report?

Let us know your views on our news.

Contact Hudson Online