Financially Fit with Morgans Noosa
A new year is a time for reflection and goal setting, not just for your mind and body, but also for financial goals. With 30 June already approaching, John Caruso learns that right now is the perfect time to assess your progress and fine-tune your strategy.
Just as we look to start a new year with good intentions and new habits for improving our physical and mental health, Morgan’s Noosa Principal Andrew Stafford suggests that it is also a critical time to conduct a financial check-up. Even though the new calendar year is just starting, it’s important to remember that the financial year is already past the half-way mark.
“The first few months of a calendar year is an ideal time to assess your financial fitness,” he says. “It’s important to take stock of your capital gains tax situation, assess whether you’ve maximised Superannuation contributions, and to look at opportunities to minimise tax liabilities before the financial year wraps up.”
It’s also important to understand what the year ahead might hold in store. One major factor influencing global markets in 2025 is the return of Donald Trump to the US Presidency with the so-called ‘Trump bomb’ adding fuel to the already-soaring American markets. But as Andrew points out, the ripple effect for Australian investors remains uncertain.
“It’s not necessarily a positive for Australia,” he explains. “The potential for trade wars, changes in tariffs, and shifts in global economic policies could have significant consequences for our resources and commodities sectors.”
While Trump’s return has largely been seen as pro-business in the USA, Australian investors need to be cautious.
“Markets have responded positively because of promises of corporate tax cuts and business-friendly policies. But we still don’t have a full grasp of how this will impact Australia,” Andrew says.
One of the biggest watchpoints for investors this year is market concentration risk.
“Last year’s strong returns in equities were heavily concentrated in a small number of stocks,” Andrew explains.
“In the US, the so-called ‘Magnificent Seven’ – tech giants like Apple, Amazon, Microsoft, Tesla, and Google – drove much of the market’s growth.
“Here in Australia, the strong performance of the ASX was largely due to a handful of big blue-chip stocks, particularly the big four banks.”
Commonwealth Bank, for example, is currently trading at near-record highs.
“It’s one of the most expensive banks in the world now, trading at a price:earnings multiple of 26 times its projected 2025 earnings,” Andrew says.
“That’s more than double the valuation of the world’s largest and most profitable bank, JP Morgan.”
What does this mean for investors? Simply put, it’s a warning against overexposure. Many passive investors, particularly those investing in exchange-traded funds (ETFs), may not realise how concentrated their holdings have become in a handful of stocks.
“It’s important to be cautious,” Andrew advises. “If growth slows or the market stumbles, these stocks could take a significant hit.”
Interest rates and inflation remain at the heart of financial decision-making and with inflation showing signs of coming under control, the new year saw pressure mounting on the Reserve Bank of Australia to cut rates.
“The current government would certainly be pushing for rate cuts as it would help with their narrative on economic management,” Andrew said.
However, it’s not a simple decision.
“Unemployment is still very low, and government spending remains high, which complicates the RBA’s position,” he notes.
While the first rate cut in four years has just been handed down, as most economists predicted, Andrew cautions against making investment decisions based purely on interest rate speculation.
“The main game is still inflation containment,” he says. “Investors need to focus on long-term positioning rather than short-term rate movements.”
With all these factors in play, what’s the best course of action for Australian investors? According to Andrew, this is an ideal time to have a deep dive into your financial strategy.
“Asset values are at – or near – record highs,” he shares. “That means it’s a crucial time to assess your portfolio and ensure you’re well-positioned for the year ahead.”
To best prepare, Andrew and his team at Morgan’s Noosa, offer complimentary portfolio assessments to new clients.
“We provide an in-depth review to ensure you’re prepared for the economic forces ahead,” he says.
And, with global uncertainties, elections on the horizon, and shifting market dynamics, having a robust and diversified financial plan is more important than ever.
Tax planning should also be a top priority as 30 June edges closer.
“We look at strategies like topping up Superannuation, managing tax-deductible expenses, and reviewing investment structures,” Andrew says.
Autumn isn’t just about cooler temperatures and shorter days; it’s a golden opportunity to fine-tune your financial position.
“The key is not to wait until 30 June is just around the corner,” Andrew advises. “Taking proactive steps now could mean the difference between a strong financial position and a missed opportunity.”
So, why not schedule a health check to ensure you are financially fit to weather any storms and to put your best foot forward for ultimate fiscal fitness?
The advice in this story is of a generic nature and individuals should seek their own independent, investment advice and guidance.
