Investment returns for the 21/22 financial year

The 21/22 financial year was an incredibly difficult period for investors, share markets retreated from their end of 2021 highs, with Australian shares posting a -7.40% return, US shares posting a -2.40% return and International shares a -6.50% return – as outlined in the table below. The dramatic increase in interest rates (both domestically and globally) meant that the defensive components of many portfolios – such as bonds / fixed interest investments also produced negative returns. There was simply nowhere to hide – and the tough year in the markets is now being reflected in the performance returns on everyone’s annual statements (your adviser included). That being said, since the 1st of July – the Australian share market (ASX200) has risen by around 6.5% and the US share market (S&P500) has risen by around 11%. It is a short-term trend but does highlight the benefit of holding tight during market downturns to benefit from any recovery.    

Vanguard, one of the world’s largest fund managers, generate a graph each year which outlines the last 20 years of investment returns – it’s a busy graph, but it illustrates how sticking to a long-term investment plan, with diversification across a range of asset classes, allows you to grow wealth over time. Even in the face of market crises and short-term volatility. 

Protecting yourself from scams

Sadly, many Australians get scammed – either with personal information being compromised or bank accounts hacked, and it can be a harrowing experience. In the first 6 months of this year, over 100,000 Australians have reported a scam to the Australian Competition & Consumer Commission (ACCC)  – with associated losses of almost 300 million dollars ($300,000,000) – as you can see that is a lot of zeros. And as many scams go unreported, those statistics are likely understating the actual figures.

As a financial adviser, I place a high priority on keeping up to date with the various scams being used, and if you want to protect yourself I strongly recommend you spend a few minutes to review the various types of scams doing the rounds: Types of scams | ACCC Scamwatch. Scammers are continually refining and testing new ways to steal your money – so being up to date with the latest tricks they are using is one of the best ways to stay protected. The ACCC have a dedicated Scamwatch webpage and consumer email notification service where you can subscribe to get alerts on the latest types of scams, and my advice to everyone is to subscribe. Link to register is below.

Reminder for retirees who own shares but don’t lodge a tax return – you may be eligible for a franking credit refund

Many retirees no longer need to lodge a tax return, but if they personally own Australian shares (either directly or via a managed fund) they should be aware that they are entitled to a refund on any franking credits relating to dividends they have received each year. The franking credit is simply a refund of tax that has already been paid by the company you are investing in. So, if an ASX listed company pays an investor a $1 cash dividend which is a fully franked dividend – and that investor is on a 0% tax rate, then after adding on your franking credit refund, that $1 cash dividend ends up being worth $1.43. Unfortunately, if you don’t claim the franking refund (which needs to be done every year) you don’t receive it – so this is a worthwhile exercise to complete each year. This process can be done via your MyGov account or directly with the ATO using the link below. Any questions please contact the office to discuss. 

As always, if you wish to discuss how current events may be impacting your portfolio or any other matter, please get in touch. You can call me directly on 0438 383 513 or book in a time here:

Kind Regards, 
Ben Maw CFP®
Adv. Dip FS (Financial Planning)
Authorised Representative # 253314
BPM Financial Pty Ltd

Information provided in this newsletter is general in nature and does not constitute financial advice. Please review our General Advice Disclaimer here: 

BPM Financial Pty Ltd, Authorised Representative No. 344410 of BPM Fin Pty Ltd AFSL 542821.