John Cameron's personal blog

Serious discussion about your financial position now - and in the future.

Superannuation Changes Are Not Retrospective!

There. I’ve said it.

There are many reasons to criticise the superannuation changes announced in the budget (more on that next time), but retrospectivity is not one of them. Why? Because they are not retrospective.

Much of the considerable amount of criticism has been around the changes being “retrospective”. However, there is confusion between “retrospectivity” and “grandfathering”.

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Is It Time To Reconsider What We Mean By “Risk”?

Traditionally investments such as government bonds have been considered “safe”, whereas shares are considered “risky”.

So pervasive has this been, that, in the jargon of financial markets, when somebody talks about “taking on more risk”, what they are really saying is that they are selling bonds and buying shares (or using cash to buy shares). Conversely, if they are selling shares and moving to bonds or cash, they are “reducing risk”.

Now, it seems, the jargon is moving mainstream. I recently saw a retiree being interviewed on television. In order to make ends meet, he said he was “taking on more risk” with his investments.

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Happy to see The Australian Financial Review printing my letter today....I even got my own Cartoon!


 

 

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Culture – From Boring To Buzzword In No Time

The last couple of weeks have seen more skirmishes in the “culture wars”. 

The first shots were fired by a Four Corners Programme that disclosed that the Commonwealth Bank’s insurance subsidiary, Comminsure, had used dodgy methods to avoid paying claims. A poor culture within Comminsure was quickly blamed.

The issues have been smouldering for years, but now that full scale conflict has broken out, it looks like being a protracted campaign. No doubt there will be moments of tension, drama, high farce and even, yes, humour (in fact a sense of humour may be an essential survival mechanism).

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The Culture Of Banks?????

Last week was a bad week for the banks so far as publicity goes.

Prime Minister Malcolm Turnbull gave the banks a genteel tongue lashing (they hadn’t always acted in their customers’ best interests, he said) at a lunch called to celebrate Westpac’s 99th birthday. 

A birthday party may not be the usual place for a VIP guest to give his hosts a jolly good talking to, but the PM’s words were soon followed by a chorus of politicians calling for a Royal Commission into the Banks. Motives undoubtedly varied from the purely political to the more principled. However, nobody has yet spelt out what they want any Royal Commission to enquire into and there hardly seems any point in having a Royal Commission just for the sake of it. The Government, for its part has replied that ASIC already has Royal Commission like powers, and presumably could be relied on to use these powers if they thought it was necessary.

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