Justin Still - August 22, 2013

As you may be aware, we have decided to revert back to the branding of Power Tynan to include all sectors of our firm. We are still the same organisation providing the same services; only the following divisions will now operate under the Power Tynan brand:

• Power Tynan Taxation Solutions
• Power Tynan Business Advisory Solutions
• Power Tynan Superannuation Solutions
• Power Tynan Leasing & Finance Solutions

The only part of our business that will remain under a different brand name is Morgans, which is our financial advice and stockbroking division.

As you can see, we provide a unique offering of services, which results in extremely satisfying holistic relationships with our clients.

Given the uncertainties that many businesses are still facing post-GFC, which started 5 ½ years ago (it’s probably a good thing that we didn’t all know that it was going to take so long to see a recovery), I just wanted to discuss what is happening in the Australian economy.

Since the GFC, we have been faced with uncertainties including Europe’s sovereign debt issues and a slowing US economy. These issues seem to have faded somewhat. However it now appears as though we are faced with a new set of issues, with a slowdown in China taking place and an Australian economy which, outside of resources, continues to struggle with low levels of consumer and business confidence.

Despite this, there are some positives worth noting. Interest rates which are at record lows and likely to go lower are slowly but surely starting to help with a pick-up in housing demand and finance approval in recent months. This should at some stage also assist in lifting retail sales.

In addition, the falling Australian dollar will go a long way in assisting those sectors heavily hurt by the strong dollar, including tourism, agriculture and manufacturing.

From an investment perspective, record low interest rates are making it increasing difficult to generate meaningful amounts of income from cash and term deposits, particularly for those in retirement. As a result, many investors have started considering alternatives to term deposits as a means of increasing the income of their portfolios, particularly given the returns on offer. As an example the grossed up dividend yields of shares in the major banks are between 9 and 10% and a lot of preference shares are yielding around 7 to 8%. However, it is really important to understand the additional risks that you are taking on in terms of increasing your exposure to growth assets. It is critical that you always take into consideration your overall asset allocation relative to your investment risk profile and ensure that you stick to your long-term investment strategies.