Happy New Year to you all!

Our new year has begun with an exciting office move. 

Deciding to spruce up the new place and give it some Wiseman charm, we replaced the existing 

carpets and in doing so, discovered some old newspapers from as far back as 1975!

It was amazing to flick through the yellowed pages and gain some insights into the thinking, 

fashion and advertising of the day.

After giggling at some of the fashions....

Anyone for a denim bedspread?

....we noticed that some of the ads showed the prices of items we still use today.

And, being the financially-minded people we are, we found ourselves chatting about the 

importance of making sure our assets grow throughout our lifetime so we can reach the 

age of retirement and enjoy it in a secure and confident position.

Over the years, we have found that many people continue to believe that when they retire, 

they will withdraw all their Superannuation and live off the interest it generates in their bank 

account. This was a totally reasonable choice to make in the past, when interest rates were high... 

But this is no longer the case.

Today’s low interest rates and relatively high cost of living mean that retirees, or those thinking 

of retiring, have to consider how to extract the best return on their money to meet their 

living expenses. And, if possible, it is best to plan for this well before retirement appears on 

your horizon. 

In 2016, Glenn Stevens, our former Reserve Bank governor, warned Australians that 

many retirees would find themselves disappointed with the returns on their assets. 

Particularly if they had invested their money into Defensive Assets (like cash and some 

fixed-interest investments) as the lower risk levels of these types of investments generally 

indicates lower returns over the long term.

ABC News - Glenn Stevens low rates come at high cost to retirees.

The on-going rise in the cost of goods has a significant impact on how much retirees 

will need to draw from their retirement assets. If your portfolio doesn’t grow in value 

to help compensate for the increase in living costs, then you could find that you 

don’t have sufficient assets to live off during retirement. A scary thought! 

But, investing into Growth Assets (like shares and property) has an added risk of financial 

volatility because the assets will jump up and down in value. Interestingly, investors 

have only recently seen an increase in volatility after a period of some of the lowest 

market volatility on record: 

The Vix - 2017 was the least volatile year in decades.

People are often concerned with an increase in ‘risk’ for their investments as the market 

becomes more volatile. But, we need to be mindful of a multitude of risks when it comes 

to investing and financial strategy: 

As you can see, ‘Volatility Risk’ is only one risk to consider when you are 

planning for retirement.

The recent increase in market volatility during 2018 may cause some investors 

to head for the safety of Defensive Assets in the hope that they will reduce 

the risk factor and keep their hard-earned funds secure. 

However, when you consider that car tyres cost $20 each in 1975 as opposed to what they cost now, 

you can see how essential it is to aim for optimal growth of your investments over the long term.  

If you’d like to talk about retirement planning and investing for your future, 

feel free to pop over and check out our new digs – we’re always happy to have a chat!