A Trump Presidency – What it means for Australian Investors

A Trump presidency in the US may have been a surprise for many but some international financial markets have been predicting the outcome with bond yields, the US dollar and Bitcoin all being ‘up’ over the past month, and likely to influence Australian interest rates and investment returns​.

Overall, a Trump presidency could also mean a potential ramping up of trade wars and general increased economic uncertainty.

AMP Head of Investment Strategy and Chief Economist Shane Oliver* says the likely investment market implications of Trump’s proposed policies are:

• • Upward pressure on US bond yields from a bigger budget deficit, higher inflation and higher interest rates

• • Upward pressure on the value of the US dollar (putting downward pressure on the Australian dollar) because of higher tariffs, higher than otherwise Fed interest rates and increased global uncertainty

• • Upward pressure on Bitcoin and other cryptos as Trump is seen as supportive of crypto

• • Ambiguity for the US share market - While tax cuts and deregulation will be positive in the short-term, trade wars and higher bond yields will be negative over the longer-term

• • US shares are likely to outperform global shares reflecting the tariffs and increased global uncertainty

• • Upward pressure on US financial and energy shares relative to clean energy shares

• • Upward pressure on US small caps relative to large caps as small caps will benefit most from the lower corporate tax rate on domestic profits and large caps are vulnerable to a trade war

YML’s Approach to managing our Clients’ Investment Portfolios

At YML we pay close attention to fund manager briefings and Webinars to understand their take on the global financial market and what actions are being taken in response to market influences. We constantly review macro commentary and regularly confer with our consultants at Morgans.

We agree with the comments made by Shane Oliver and have been allocating our clients’ funds to small caps and international shares over the past eight months. We continue to focus on investing in and holding shares in sound and quality businesses, as well as allocating investment funds to highly rated, ‘good record’ fund managers.

We remain mindful of ensuring diversification across various local and international asset classes as this bodes well for short- and longer-term results.

We welcome the opportunity to advise and manage our clients’ superannuation, personal and trust funds. As Trump’s presidency begins, our bespoke investment portfolio design and ongoing management will reflect you and your financial objectives for your life stage.

* Super news for November 2024

How can YML help?

Talk to our YML Financial Planning Team today to see how YML Group can assist you with your financial investments. For more information, view our website and contact us on (02) 8383 4444 or by using our Contact Us page on our website.

Not-for-Profits and Deductible Gift Recipients – Eligibility

Organisations in Australia that are created as not-for-profits (NFPs) focus on reaching charitable, social and humanitarian goals within their communities. Both NFPs and other Australian businesses can register as deductible gift recipients (DGRs) to receive donations that are tax-deductible by the donors who contribute to them.

NFPs must operate for a purpose, commonly charitable work, community support, education, religion, and any profits or surplus funds are used to further their purpose. Directors, members and shareholders may not receive a distribution of profits.

Setting up a NFP requires:

• outlining a mission and objectives that meet the definition of a charity
• ensuring compliance with relevant laws for NFPs – seek professional advice
• registering with the Australian Charities and Not-for-profits Commission (ACNC)
• funding a NFP which typically relies on grants and donations for financial support
• applying for tax concessions through the ATO, including DGR status, if eligible

DGRs are NFPs or funds which are eligible to receive donations from donors who may claim their donations as tax deductions. Being granted DGR status can be advantageous to an organisation because it encourages public donations for their charitable programmes, in areas such as health, education, environment, welfare. Receiving donations from the public can benefit a DGR by improving their financial ability to support their charitable work.

Becoming a DGR involves an organisation:

• meeting eligibility requirements, including falling into one of the general DGR categories listed in the Income Tax Assessment Act 1997
• registering with the Australian Charities and Not-for-profits Commission (ACNC), if required
• applying for DGR status with the ATO
• establishing public funds, if relevant to an organisation’s financial strategy for funding its causes or mission

A DGR-endorsed organisation has been officially recognised by the ATO as having a special taxation status that enables an organisation’s donors to generally – exceptions apply – claim their donations over $2 as tax deductions.

Compliance of NFPs and DGRs

Annual reporting is required by the ACNC to comply with fundraising regulations. It is therefore important to maintain accurate records of income, expenses and donations. Finally, transparency with donors is essential to ensure that an organisation retains both its integrity and legality to provide the incentive of tax deductions to the donating public.

How can YML help?

Talk to our YML Chartered Accountants today to see how YML Group can assist you with structuring your NFP and applying for DGR endorsement. For more information, view our website and contact us on (02) 8383 4400 or by using our Contact Us page on our website.

Is it a good time to think about fixing your loan and will it help your borrowing capacity?

No one really knows how low they will go. 

But some banks will not wait. We are already seeing low fixed rates. As low as 5.69% fixed for 2 years with Principal and Interest repayments for home loans. 

If your current loan is 6.45% pa or above, the difference is 3 rate drops of 0.25% each.

Also, some lenders will use the actual fixed rate to assess your borrowing capacity, allowing you to borrow more if you fix your home loan on the lower rate.

How can YML help?

Talk to our YML Finance Team today to see how YML Group can assist you with your financial investments. For more information, view our website and contact us on (02) 8383 4466 or by using our Contact Us page on our website.