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What we are doing to support you?

Well, what a few weeks we have had! We trust you are doing all that you can from a health and wellbeing viewpoint.

We are in the midst of what can only be described as a rapidly evolving situation, with the possible impact on society changing it seems on a week to week basis. The good news is that over the last week governments have realised the severity of this situation and we have seen real action by way of decisions in the areas of health, travel and border security with a view to flatten the transmission curve. From a government and central bank viewpoint, stimulus has been injected into our domestic and global economies with a view to creating confidence, liquidity and avoiding or reducing the impact of a recession. Rates fell again last week, and we also would not be surprised to see rates at zero across the developed world by the end of the financial year. That is all macro, but what is really important is that you do what you can to focus on your personal economy (and your health) at this time.

So in terms of what we are doing as advisers, as you would expect, we have been busy (but in constructive ways).

Advice: We have been checking in with clients to ensure they have the cash set aside to get through what will be a challenging period. For our retirees, this means having at least two years of spending in cash and term deposits, and for accumulators that means at least three months of spending in cash and strong consideration to increasing regular wealth plan contributions whilst the sales are on.

Lending: We have been pushing back on lenders to ensure our clients are getting the best home loan rate possible and supporting some of our small business clients with what for many is very confronting. Where you can, please support small businesses in your community as many are doing it tough. Clients who are financially impacted by the coronavirus should also be aware that they can apply to their bank to defer home loan repayments for up to six months if needed. For the duration of the support period no repayments are required. However, during this time interest and charges will add to the loan balance. At the end of the support period, your required repayment amount will increase so you repay the total balance over the remaining loan term.

Investment strategy: We continue to research and review each of the assets within the models that our clients are invested in, including some tactical shifts as a result of the volatility. At this time the Investment Committee has opted for changes that we know could provide us with a certain outcome. In the quarterly rebalance in a little over one week, we will make some changes to the ETF’s we use to track the Australian and global share markets that will see the fees paid for the same strategy reduced by over 40%. We have reviewed our corporate credit exposure, and remain comfortable that the businesses are sound. With the recent flight to safety and fall in the value of the AUD, we are also giving consideration to having a larger portion of your international portfolio hedged. Within the portfolios themselves, over the course of the last few days, some of the managers have made decisions to sell investments in the likes of Treasury Wines, Tabcorp, ANZ and Amcor, and have purchased or topped up positions in Nick Scali, BHP, and AUB.

In terms of our investment portfolios, through careful manager selection we have sought to reduce risk, and each quarter we have rebalanced the asset allocation and investments (where available). This has meant that our portfolios have not fallen as sharply as the overall investment markets, which can mean you recover more quickly. When the recovery does come.

There has been a range of government announcements of economic stimulus and relief packages for both individuals and businesses. There are seemingly more announcements by the day. We are co-ordinating the information into what is relevant for various segments and we will get back to you later in the week with guidance on what may be relevant for you and how to go about accessing any benefits.

Evalesco and COVID19:

From this week we will have a reduced presence in the office, however, We are always available for chat via phone, ZOOM or Skype. Our office phone number will continue to be in operation.

Our role as your financial adviser is to help you keep your head when others about you may be losing theirs and to provide some clarity to see the bigger picture.

Your longer term goals (financial or otherwise) shouldn’t be shaped by some (likely) short term turbulence in the share market along the way and it’s important to keep that in mind.

If you have any questions please don’t hesitate to ask, that’s why we’re here.

It’s my job here at Evalesco to work with my clients to maximise the likelihood that they achieve what is important to them in their life.