How financial advice can pay good dividends during tough times

How Financial Advice can pay good dividends during tough times

In a period of market instability due to COVID and low interest rates, many investors are struggling to know where to invest.  For those at or nearing retirement, the struggle is even greater.  Cash and term deposits used to be considered a safe haven, but with interest rates at historical lows, more investors are being pushed to consider alternative investments.

It may be tempting to jump on the latest trending investment or social media "viral" investment, such as GameStop or Bitcoin, but this can lead to investors taking unnecessary risks and losing money rather than growing it.

At times like these, the importance of reliable and thorough advice is more important than ever.  At Rhodes Docherty & Co, our financial advisers have never been busier, as we have helped our clients navigate the unsettled stock market and seek better returns in a low interest rate environment. 

Here are some examples of how our financial advisers are working hard to help our clients' investments grow:

• While interest rates for cash and term deposits are at record lows, fixed income investments are an alternative to cash which can provide higher returns over the medium-term, without the volatility of the stock market. Our advisers are actively working with our clients to manage duration in fixed income portfolios to help them get the best out of the defensive portion of their portfolios.

• Establishing and/or reviewing Australian shares within a portfolio to make sure our clients are exposed to good quality businesses listed on the stock exchange. We like businesses that have a competitive advantage in their market segment and are likely to grow their earnings over time. This results in good quality dividends and franking credits within a portfolio that can be much higher than the returns on cash;

• For our clients who are actively working to build their wealth through investments and/or superannuation, the key has been to build with growth assets over the long-term.  In a time of such low interest rates, growth assets take on more importance because of the "TINA" rule There Is No Alternative to growing your investments. Our advisers assist our clients to help them to determine how much exposure to growth assets is suitable for them. We also believe in active management of those investments that helps to guard against some of the downside risk of these growth investments. 

Whether you are close to retirement or wanting to see more growth in your investments or superannuation balance, now is the time to get personalised financial advice from our licenced financial planning team.  Call us on (02) 9988 4033 to find out how our team can help you.

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Rhodes Docherty Financial Advisors Pty Ltd ABN 43 122 391 315 is an Authorised Representative of RDC Advisors Pty Ltd, Australian Financial Services Licensee No. 396268 (Ph. 02 9988 4033). Any advice contained in this website is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. You should seek advice from Rhodes Docherty Financial Advisors who can consider if the general advice is right for you.