Summer 2009


    A word from Daniel Minihan


    The end of one year and the beginning of a new one gives us time to reflect on where we have come from and where we are going. Although the 2008 year is one we would rather forget,
    it is important to ensure that we examine what went wrong so that we can apply these lessons for the future. In doing so, it becomes apparent that although the subprime crisis and economic woes were exacerbated by financial engineering, the underlying cause of the current predicament we find ourselves in was a traditional boom and bust in the U.S. housing market.

    Economic commentary

    Global Economy
    The boom and bust cycle in the U.S. property market moved decidedly into bust mode in the December quarter with the S&P/Case-Schiller index showing house prices in 20 major
    U.S. cities falling by an annualised 18 per cent. The biggest falls were on the West Coast where Phoenix declined by 33 per cent for the month of October 2008 alone.

    Borowing to invest within your Self-Managed Super Fund (SMSF) has the potential to boost your super and help you reach your retirement goals sooner. In September 2007, the government opened the door to gearing within SMSFs – meaning it’s now possible to borrow to invest in a broad range of investments inside a SMSF.

    What’s more important; risk or return?

    This is the second in a series of two articles on the relationship between risk and return. The first article in the 2008 Winter Edition of this publication, attempted to define risk and return, and explain how they work together to deliver returns.

    Critiquing the crisis

    ‘As we wait nervously to see what is next to unfold …’
    This was a concluding statement made in our previous issue, which we have undoubtedly lived over the last three months and it continues on. Despite the efforts of the U.S. Congress passing the $700bn revised government rescue plan on October 3rd 2008, following the shock rejection of the earlier version, a chain of significant events continued to unfold. To mention a few…