Plan 2 Prosper

Consider for a moment the following statement attributed to the United States Court of Appeals:

“… what corporate purpose could be considered more essential than key man insurance? The business that insures its buildings, machinery and automobiles from every possible hazard can hardly be expected to excercise less care in protecting itself against the loss of two of its most vital assets – managerial skills and experience …”

It is clear that key persons may be found in all types of business, large and small, incorporated and unincorporated, capital oriented and personal service oriented, new and old. However, the need for key person insurance is not the same for all businesses that have key persons. (more…)

As many of you will soon be receiving your annual statement, I thought it would be a good time to position the impact of this year’s recent market events on your super.

After the strong performance of the past few years, the recent downturn means it’s likely your annual statement will show a negative return for the year.

Although it’s natural to feel alarmed when this happens, it’s important to remember that it’s normal for markets to move up and down. Therefore it’s important to have a long-term view and not look at this year’s performance in isolation.

Market volatility is normal. Since the end of World War II there have been 11 bear markets (i.e. where the market* has fallen by around 20% or more).

Despite this, the market is 20 times higher today (excluding dividends) than it was post World War II, which shows the good years have more than made up for the bad.

The same trend is likely to be true for your super returns over the long term, so at this point there’s no need to be unduly concerned about your fund’s performance.

However if your circumstances have changed, or if you do have concerns you would like to discuss, please call me on 07 49 237 142.
 

* The Australian sharemarket (as represented by ASX All ordinaries Price Index (1980-2008) and Sydney All Ordinaries Price Index (1945- 1980))

MLC’s Brian Parker provides his thoughts in a July Market Update.

Block out about 5 minutes of your time and then clink on the link: “Market Update”

Once you have it, you often don’t give your insurance another thought until you need to make a claim. But as your lifestyle changes, it is easy to outgrow the insurance you have in place.

If you have made some big changes recently – like having a child, buying a house, retiring from the workforce – you may need to reassess your insurance. As your circumstances change, so does your insurance needs. Just as your circumstances change, the features and benefits available within insurances products are often updated with new offers which help furtehr protect the things you value.

Not reviewing and updating your insurance, can leave you vulnerable when you need it most. (more…)