6 Tips to Managing Your Investments in the New FY

Dale Gillham, Chief Analyst and Head Trainer of Wealth Within

By Dale Gillham |

Now that we have reached the start of the new financial year, it’s time to review your investment strategies to take advantage of any potential tax benefits. Whether you're a seasoned investor or just starting out, it’s essential you do something, as we all know what happens when you do nothing.

Optimise your financial position for success

One of my rules is to never treat a tax refund as a win fall, always treat it as savings and invest it into growth assets. So, here are my six tips to consider, as you navigate the investment landscape during this critical period. By following these tips, you can optimise your financial position and set yourself up for success.

1. Resist the temptation to spend and start planning now

2. Review your investment portfolio: Before making any new investment decisions, take the opportunity to review your existing portfolio to ensure it still suits your long-term goals. It’s also time to clear out the dead wood and invest your money into assets that are growing rather than holding you back.

3. Understand the tax Implications of your decisions: This is a perfect time to understand and leverage any potential tax benefits you may have, which is why it pays to consult with a tax professional. If you’re an investor, it also pays to be familiar with the relevant tax laws and how you can take advantage of them in the coming year.

4. Be clear on your investment goals: If you have a partner sit down together and ensure you document your goals. Part of this process involves working out your short, medium and long-term goals. This might include buying a home or investment property, starting a share portfolio or some other worthwhile investment.

5. Don’t over diversify: Diversification is an overused word and often causes investors to make unwise decisions. It is more beneficial to have a concentrated portfolio rather than taking on excess risk. It also ensures you are able to achieve better returns rather than very average returns.

6. Get educated: If you're unsure about your investment decisions, then now is the time to get educated, so you reap the rewards. Don’t rely on others or luck in the hope you will make money. Gain a quality education because you will definitely be able to make better informed decisions.

How your next financial year unfolds will be a direct result of what you do today, which will require some careful consideration. So, get educated, stay informed and above all adapt to changing market conditions.

What were the best and worst performing sectors last week?

The best performing sectors included Information Technology up 4.52 per cent followed by Consumer Discretionary up 2.82 per cent and Financials up 2.21 per cent. The worst performing sectors included Utilities down 1.86 per cent followed by Healthcare down 0.48 per cent and Consumer Staples down 0.13 per cent.

The best performing stocks in the ASX top 100 included Lend Lease up 10.71 per cent followed by The Star Entertainment Group up 10.53 per cent and Harvey Norman up 8.07 per cent. The worst performing stocks included Lynas Rare Earths down 4.20 per cent followed by APA Group down 3.20 per cent and Evolution Mining down 2.42 per cent.

What's next for the Australian stock market?

Last week I mentioned that a week can be a long time in the stock market given what transpired the previous week and the same can be said last week given that the All Ordinaries Index rose 1.59 per cent. It has once again displayed the extremes of both bullish and bearish sentiment after falling last Monday to its lowest point since March before rising over 2 per cent over the next four days. So, without wanting to sound repetitive is the market continuing to defy logic?

It has been 10 weeks since the last major high and with the fall into last Mondays low, the market has fallen 4.57 per cent. So, while it may feel like the market is bearish, it’s not really overly bearish or bullish. The question we need to ask is not what the market is doing, but rather how do the current conditions affect us.

For most it will be an uneasy feeling, while others will be excited about the opportunities that are likely to unfold. While the Australian stock market is not unfolding as we would like and is being more unpredictable right now, it doesn’t mean we can’t plan to profit from it.

While I am still concerned that there may be further falls down to 7,000 points or slightly below, I am also considering what the potential is if the market rises from here and you should to. To manage your risk, there are two things you can do. Firstly, make sure you have set an exit strategy on all of your stocks and secondly, start researching stocks to buy in the top 20, as many are looking very interesting right now. I also suggest getting your plan together now, otherwise you may miss the opportunities.

For now good luck and good trading.

Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also author of the bestselling and award winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good book stores and online.

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