Will the Presidency of Trump benefit your retirement funding or will it harm it ?
In other words, will the investment market flourish and head us towards the biggest growth period in recent history? Or will America head towards civil unrest and which will lead into a global recession? President Trump's intention is to lower taxes in America and refurbish America's infrastructure. This should lead into a resource boom which could be bigger than what we positively experienced a few years ago when China went through an infrastructure growth. The resource boom will affect the Australian Share Market in a positive manner. It will create jobs in Australia and will provide the Australian government with a non tax funding which should lead to tax reductions on a personal level and on superannuation.
On the potential negative side, the social unrest can become an issue as there are no signs that the people in America that were against Trump's election have accepted the results. We are now starting to witness pro Trump supporter demonstrations going head to head with the anti Trump demonstrations. Considering the level of weapons that are held by the American public the situation can escalate very quickly. This can lead to a recession in the USA which will then affect China's economy which would then have a chain effect on Australia's economy. Our government already has a funding shortage (as we saw in their changes to the superannuation taxes). If the negative outcome prevails we will experience drops in the investment markets and higher taxes.
The question is what approach should one take towards the investment strategy of their retirement funding ? We don't know which of the events described above will play out. More likely it will be somewhere in between the two spectrum. If one prescribes to the positive outcome and he was fully invested into growth assets in attempt to strengthen their retirement funding and the negative scenario happened by being exposed they will be adversely affected. On the other hand if one took a conservative approach and the positive scenario played out not only would one miss the opportunities but also there is real risk of devaluing their retirement funding.
We developed unique strategies for retirement funding which allows one to protect their retirement fund while allowing for potential growth.
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Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It's also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.