Interest rates | Hewison

Interest rates

The economic picture over the past 18 months has been startling. To support the global economy during last year’s COVID-19 related shutdown, governments around the world took drastic action to prevent a global slowdown that could have rivaled the Great Depression. In Australia, this contributed to the cash rate dropping to a historic low of just 0.1%. 

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.au

Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.

Interest rates

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.au

Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.

Interest rates

The US Federal Reserve has kept interest rates at close to zero for seven years, and has injected $US4 trillion into the economy over this period. This creates a challenge for Janet Yellen, US Federal Chair, as she must balance her messaging to stakeholders to send the right signals: it’s important for her to appear somewhat positive in her comments regarding the economy but ensure she does not go as far to “spook” investment markets.  

How did both Australia and global investment markets react to the news?

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.au

Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.

Interest rates

While this rate cut is great news for home owners and those trying to enter the property market, the question remains as to what the impact is for self-funded retirees?

When equity markets were volatile and returns uncertain during the global financial crisis (GFC), many investors, including self-funded retirees, were quite happy sitting on hordes of cash earning six per cent or more on term deposits.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.au

Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.

Interest rates

While some thought that the combination of falling oil prices and a lower Australian dollar would act as a pseudo rate cut, the RBA thought otherwise, cutting interest rates to an all-time low of 2.25 per cent. Governor Glenn Stevens cited weaker growth and a higher unemployment rate as key reasons for the cut.

Interest rates have been in decline since November 2011 and are intended to encourage business investment and consumer spending, in a bid to strengthen the economy.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.au

Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.

Interest rates

So, is now the best time to fix the rate on your mortgage, or should you hang in there in the hope of further rate cuts?

Economists believe current fixed rates are a good deal and with the expectation that interest rates are due to rise in the next 12 to 18 months, now may be a better time than ever to fix.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.au

Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.

Interest rates

As most would know, the cash rate is set to keep the economy, or more specifically, inflation in check. The RBA aims to keep inflation between two and three per cent per annum. If the economy is performing strongly and inflation looks to be heading above this target band then the RBA will increase rates. Conversely the RBA will reduce rates if the economy is lagging and inflation is tracking below the band.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.au

Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.

Interest rates

 Not surprisingly, with the two rate cuts late last year and an outlook of stable to lower rates for the current year, many investors are considering alternative ways to bolster their income.

However, one way to gain access to higher income is via Australian company share dividends. With cash rates at around 4.25% and current term deposit rates falling to around 5.5% - dividends are looking quite attractive. 

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.au

Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.

Interest rates

The main reason for declining rates has been a slowing economy and fears that it will get worse.

Are interest rate cuts good for you?

The answer depends on your financial situation. If you are a home owner with a mortgage then a cut in rates means your mortgage repayments will fall and you will have more money in your pocket. This is a good thing.

If you are an investor, such as a self-funded retiree and relying on the income being generated from cash and fixed interest investments then falling interest rates means you are earning less from your investments. 

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.au

Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.

Interest rates

As I said in my blog in October last year, interest rates were tipped to fall 0.5% down to 2.75%. This has now happened.

So how low can they go?

The looming slowdown in mining investment growth led the RBA to start cutting the cash rate from 4.75% in November 2011. Higher growth and investment in non-mining sectors is required to pick up the slack. Lower interest rates are intended to encourage business investment in other growth sectors.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.au

Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.