The rebound in Australian shares continued in April. The All Ordinaries index gained a further 3.2% to close the month at 5,316.0 points. While this marks the second consecutive month of solid gains, close attention will be on Treasurer Scott Morrison as he delivers his first Federal Budget tomorrow night.
Global investment markets generally exhibited marginal gains in April. The US Dow Jones Index gained 0.5%, the London FTSE gained 1.1% and the Hong Kong Hang Seng Index gained 1.4% in the month. Bucking the trend was the Japan Nikkei 225 index that declined by 0.6%.
As a financial adviser, one of the key themes that we discuss when retirement planning for clients is "longevity risk". The graphic below shows the number of Australians aged over 85 (both historically and as projected into the future).
Source: McCrindle
As is shown above, today there are 455,390 Australians aged over 85 (up from 120,862 in 1984). By 2044, this is projected to increase to over 1.6 million people aged over 85!
There are a number of reasons why I wouldn't want to be a politician. However, the demographic change of the Australian population (with an increasing number of older persons) will be a key challenge in managing the 'books' of the economy. The longer we live, generally the more it costs the government in terms of spending on social security and healthcare etc.
I wish Scott Morrison the best of luck in delivering the Federal Budget tomorrow night. For me, I will be watching closely to see what sustainable measures are in place to cater for the changing demographics of the nation. Clearly, any cuts to the ability to save for your retirement via superannuation would be contrary to this.
In March, the RBA Cash Rate remained at 2.00% per annum. News late in the month of a weaker than expected inflation result has caused many to think that the RBA will cut rates when it meets tomorrow. The RBA will make its interest rate announcement around 230PM (EST) tomorrow.
The Australian dollar was relatively stable in the month of April, with 1 Australian Dollar currently buying 76.16 US cents.
For more information please contact Ryan Love or Michael Clapham on 1300 856 338.
This article is general information only and is not intended to be a recommendation. We strongly recommend you seek advice from your financial adviser as to whether this information is appropriate to your needs, financial situation and investment objectives.