The Latest News and Views from Ascent Wealth Management

Welcome to the new financial year !

We have certainly had an eventful few weeks in the Mediterranean.  As I write this, it has become official that Greece has missed its deadline to make debt repayment to the International Monetary Fund (IMF).  The volatility we have been seeing in markets has largely been driven by the uncertainty of being in uncharted territory; Greece is the first country to default on an arrangement with the IMF since it was founded just after World War 2.   While economic fortunes in Europe continue to improve (as evidenced in the attached Market Update), the uncertainty will continue to impact market volatility until there is a resolution.  Greece will hold a referendum so that the people can have a say as to whether the country accepts the latest funding terms from their creditors, or rejects them.  Neither action will bring swift resolution; each will have consequences.  Accepting the creditors terms simply kicks the issue down the road; success relies on the largely Communist leaning Syriza government implementing the tough economic reforms that have been on the shelf for too long.  Rejecting the demands of the creditors will fast track a "Grexit"- Greece's exit from the EU.  Domestically this action will have a diabolical impact on an already economically downtrodden country.  There will be a return to the Drachma, and immediate devaluation in it's worth as it finds its position in the world again.

Obviously this will make that visit to the Greek Islands a lot cheaper, but will do little to improve the standard of living of its people for a prolonged period.  So we wait.....  The important thing to realise is the risk of contagion ( impact to global credit markets ala a GFC like scenario) is significantly lower than the first Greek flashpoint approximately 5 years ago, there is a reduced amount of connectedness then there once was; of course there will be an impact, but the controlled nature of recent volatility may indicate an acceptance of the lower risk of dire global consequences of a Greek exit; besides there's also some good things happening in the wider global economy as the Market Update highlights.

Apart from Greece, we are now commencing the new financial year.  Now is an ideal time commence planning to make sure your tax situation is as favourable as possible in the 15/16 year.  It is also now time to commence preparing your tax returns.  I have highlighted some easy personal and SMSF planning that can be done now to ensure your returns are on track and your affairs for 15/16 are in the best shape they can be.  Please let us know if there is any assistance we can provide to help you do this. 

It's also school holidays, and while I will be "in and out" at home, it is Louise my wife who will be left to find activities to fill the long days ahead.  My last article is a few tips that might be usueful for your families.

As always, thanks for your support.  If you get a chance, please have a look at the website.  We have recently refreshed the look and feel.  My very talented son, Connor is the architect and web designer, so if you have any comments they will be welcome.  Please feel free to pass any of these articles on to anyone you think might benefit from them.

Steve