The good news is that the RBA has slashed interest rates by 100 Basis Points to a new modern era low of 3.25% – the lowest since 1964. So what does this mean for the average Australian ? Well, the good news is that on a 30-year typical $300K homeloan, a $170 bucks a month will be reduced over the entire life of the loan. This will amount to around a saving of $61K over the life of the loan.
Of course my advice has always been not to reduce your fortnightly interest repayments. Keep them at your current level and you will slash off around 5 years over the course of your home loan. Less on interest, more in your pocket.
Yep, this is the simplest recommendation that anyone can provide when interest rates decrease – don’t go out and spend this interest rate differential – “force save it” by keeping your homeloan and/or other loan repayments high. The higher the better really.
A great video I just watched from Davos is embeded below. It has some of the worlds most powerful leaders discussing the advice they would provide to the US President on Competitiveness. The leaders in this conference include:
Ellen J. Kullman, Chief Executive Officer, DuPont, USA
Rupert Murdoch, Chairman and Chief Executive Officer, News Corporation, USA; Co-Chair of the World Economic Forum Annual Meeting 2009
Duncan Niederauer, Chief Executive Officer, NYSE Euronext, USA
David M. Rubenstein, Co-Founder and Managing Director, Carlyle Group, USA
Ronald A. Williams, Chairman and Chief Executive Officer, Aetna, USA
Moderated by Michael E. Porter, Bishop William Lawrence University Professor, Harvard Business School, USA
Some great points come out of their discussion regarding the state of the United States economy including – in brief summary – the following points:
The panelists comment on the need to create new innovation in energy. Interestingly, they point out the correlation between high fuel costs and the spur for new innovation during the periods of increasing world oil prices but then as oil prices fall – this “urgency” for new innovation in energy subsides as oil falls. This time around, everyone on the panel indicated that lower fuel prices must not mean that innovation stops – all agreed that this time around it must continue.
Increase the level of education at a junior level – a smarter population means that innovative solutions can be presented to problems that seem unsolvable.Â
Increase the level of consumer confidence by ensuring that the level of communication between the Presidential Office and the people in America and around the rest of the world is consistently transparent.
Don’t rush solutions in the first 100 days but rather use the 1440 days remaining in office to fix so many of the issues – time is of the essence but it’s important to note that time is available.
Tax gasoline usage in order to reduce the amount of corporate taxation in the United States so businesses remain in the US and don’t move offshore.
There are a lot of other point worth watching in the video so check it out below and get the rest of your people in the office and/or work place to listen.
I have a bit more time to add some more posts to Small Stocks over the next month or so – so I am looking for posts from you guys regarding the type of content that you want. Please let me know whether you want me to post more content relating specifically to educational articles or whether market commentary is more suitable.
Personally, it seems that so many sites comment on the market generally so I thought I would go down the road of providing educational resources and general trading tips – but please let me know if you want a specific article typed up and I’ll get onto it!
Send me your idea’s via a comment in this post or through the contact page.
Commsec is one of Australia’s largest brokers and offers a fully fledged service. Many of the features are integrated into their typical banking operations and therefore it is better to have your day-to-day banking with Commsec in order to utilize all the benefits. Again, you pay for the extra features they give you in trading costs.
The All Ors (AORD) is closing lower today after a strong start. It seems that market was shaken Financials and Health Care sectors which were down 43.1 and 368.3 respectively. The market was quite volatile on medium trading as many broker houses around Australia started pumping out more trades with the Xmas and New Year break over. At the time of writing, the Nikkei 225 Average was up around 2.4% to 9,070.42 as trading resumed for the first time in 2009, while the broader Topix Index gained 2.2% to 877.95. The Australian Dollar also was up as the Yen fell and so exporters in Japan were laughing all the way to bank, which was good news for the Car Industry and the Technology index.Â
The ASX saw increases primarily in the Energy, Materials and Metals and Mining sectors which were all up marginally. Rio Tinto (RIO) rose $3.00 while a big loser for the day was Newcrest (NCM) which was pounded by investors and lost around $2.30.Â
