The new financial year is upon us and some of you may be feeling like nothing is going to plan.
At the beginning of this year, many economists predicted the share market racing past 6000 and interest rates rising. Property was supposed to cool down as unemployment rose. As we now know, these predictions didn’t quite reflect real market situations.
With so much talk around the financial markets what should your focus be in the last half of 2015? And where should your energy be best spent?
Financial Tips for the Last Half of 2015
Edit the noise and focus on your plan
The media exists to sell stories. Unfortunately, fear sells. This means as consumers, we’re fed a lot more negative information than positive. While it’s important to read the news and be aware of market conditions, you must learn to edit the noise from the media and not let negative spin veer you off course.
Avoid damaging financial decisions
Before making a financial commitment, do your due diligence. Due to historic low interest rates, household debt has increased significantly. And this is where the danger lies: as rises in interest rates in the future could make it difficult for those that have over borrowed.
Risk is related to return and if we are looking for the next “winner” we should first consider the risk.
Keep it logical not emotional
As humans we are emotionally wired. Because of this we often rely too heavily on our emotions when making financial decisions.
Don’t let the irrational “FOMO” (Fear Of Missing Out) rule your financial decisions in 2015. Don’t let the thoughts of “if I don’t buy now, I will never afford to buy” or if “Mr X can afford it, so can I” be the foundation of any financial decision.
Financial decisions based on fear and greed rarely lead to a positive outcome. As always, obtaining the correct information allows us to make logical decisions and remove the emotion from our decision making.
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The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.