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Although the current crisis started in the US it has rapidly spread to other major economies. Like the US, Europe has seen car sales drop dramatically, as the global financial crisis reduces buyer’s desire to spend on discretionary items. Overall, Europe has seen industrial orders down a considerable 26 per cent year on year which does not bode well for production and jobs over the coming months.3
China, previously labelled the world’s fastest growing economy, continues to lose steam, with their Gross Domestic Product (GDP) falling to the lowest rate seen since 2001. Amid weakening demand for Chinese goods, exports have fallen for the second month in a row. China’s GDP is forecast to continue falling.
Closer to home, the Australian economy is becoming more intimate with the word ‘recession’ as it battles the heavyweight ‘global financial crisis’. On a more positive note, business confidence measured by the NAB Business Survey was higher, evidence that the Government’s pensioner and family tax package may have helped retail and related businesses. Additionally, inflationary pressure has eased, allowing more scope for Government stimulus packages. However, market commentators continue to downgrade job figures.
It’s fair to say the global economy hasn’t got off to the best start for 2009. Nevertheless, it must be reinforced time and time again, that it’s important to maintain a long-term perspective when it comes to your super investments and financial situation generally. Historically, there is good evidence to suggest that every financial crisis and every recession does come to an end.
Yes, the gloom experienced by the global economy has been reflected in the performance of investment markets. However, the investment strategy you selected prior to this financial crisis may still be the right strategy for you unless your personal circumstances or objectives have changed.
Times of uncertainty are often the best time to seek financial advice. As a fund member, you can receive general advice over the phone, at no cost to you. You can also attend an initial face-to-face consultation with a financial adviser, who will assist your personal situation – again at no cost to you*.
If you would like further information on Momentum Financial Advice:
Contact a Member Services Consultant on 1300 55 7586 who can put you in touch with an adviser directly. Alternatively go to www.plum.com.au
1 Global research, Latest US housing, jobless figures far worse than economists anticipate, January 2009, http://www.globalresearch.ca/index.php?context=va&aid=11970
2 Reuters, Global stocks rise, oil falls on US jobs data, January 2009, http://www.reuters.com/article/hotStocksNews/idUSTRE5080U420090109
3 Nab Capital, Australian markets weekly, Europe and the UK, 23January 2009
*Important note
The Momentum Financial Advice service is delivered by GWM Adviser Services Limited (GWMAS) ABN 96 002 071 749 AFSL 230692. GWMAS is part of the National Australia Group of companies. Telephone-based financial advisers are licensed through GWMAS or other licensees. The financial advisers and their associated licensees may receive a commission when applications are lodged for certain financial products. Further information on commissions can be obtained from the financial adviser’s Financial Services Guide. Neither Plum nor the Trustee endorses or guarantees any advice provided by GWMAS or any financial adviser referred through the Momentum Financial Advice services. The Trustee, through the administrator, Plum, merely facilitates members’ access to these services and does not accept any liability for the services provided.
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