How to get a strong start to the new financial year


Now that we're at the start of the new financial year, it's time to review your investment strategies to take advantage of any potential tax benefits. Whether you're a seasoned investor or just starting out, it's essential you do something, as we all know what happens when you do nothing.

One of my rules is to never treat a tax refund as a win-fall, always treat it as savings and invest it into growth assets.

So, here are my six tips to consider, as you navigate the investment landscape during this critical period. By following these tips, you can optimise your financial position and set yourself up for success.

new financial year investing checklist

1.     Resist the temptation to spend and start planning now

2.     Review your investment portfolio: Before making any new investment decisions, take the opportunity to review your existing portfolio to ensure it still suits your long-term goals. It's also time to clear out the dead wood and invest your money into assets that are growing rather than holding you back.

3.     Understand the tax implications of your decisions: This is a perfect time to understand and leverage any potential tax benefits you may have, which is why it pays to consult with a tax professional. If you're an investor, it also pays to be familiar with the relevant tax laws and how you can take advantage of them in the coming year.

4.     Be clear on your investment goals: If you have a partner sit down together and ensure you document your goals. Part of this process involves working out your short, medium and long-term goals. This might include buying a home or investment property, starting a share portfolio or some other worthwhile investment.

5.     Don't over-diversify: Diversification is an overused word and often causes investors to make unwise decisions. It is more beneficial to have a concentrated portfolio rather than taking on excess risk. It also ensures you are able to achieve better returns rather than very average returns.

6.     Get educated: If you're unsure about your investment decisions, then now is the time to get educated, so you reap the rewards. Don't rely on others or luck in the hope you will make money. Gain a quality education because you will definitely be able to make better-informed decisions.

How your next financial year unfolds will be a direct result of what you do today, which will require some careful consideration. So, get educated, stay informed and above all adapt to changing market conditions.

The best and worst-performing sectors on the ASX this week

The best-performing sectors include Information Technology up more than 3%, followed by Consumer Discretionary and Financials, which are both up more than 2%. The worst performing sectors include Utilities down 2% followed by Healthcare, which is just in the red and Consumer Staple, which is just in the green for the week.

The best-performing stocks in the ASX top 100 include Lend Lease and the Star Entertainment Group, which are both up more than 8% followed by Harvey Norman up more than 7%. The worst-performing stocks include Lynas Rare Earths, down more than 4% followed by APA Group, down more than 3% and AGL Energy, down more than 2%.

What's next for the Australian stock market

Last week I mentioned that a week can be a long time in the stock market given what transpired and the same can be said this week given that the All Ordinaries Index is currently up more than 1%.

It has once again displayed the extremes of both bullish and bearish sentiment after falling on Monday to its lowest point since March before rising more than 2% over the next three days. So, without wanting to sound repetitive is the market continuing to defy logic?

It has been 10 weeks since the last major high and with the fall into Monday's low, the market has fallen 4.57%. So, while it may feel like the market is bearish, it's not really overly bearish or bullish.

The question we need to ask is not what the market is doing, but rather how the current conditions affect us. For most it will be an uneasy feeling, while others will be excited about the opportunities that are likely to unfold. While the Australian stock market is not unfolding as we would like and is becoming more unpredictable right now, it doesn't mean we can't plan to profit from it.

While I am still concerned that there may further fall down to 7000 points or slightly below, I am also considering what the potential is if the market rises from here and you should to.

To manage your risk, there are two things you can do. Firstly, make sure you have set an exit strategy on all of your stocks and secondly, start researching stocks to buy in the top 20, as many are looking very interesting right now. I also suggest getting your plan together now, otherwise, you may miss the opportunities.

Get stories like this in our newsletters.

Related Stories

Dale Gillham is chief investment analyst at Wealth Within Limited (AFSL 226347). He also serves as the head trainer at the Wealth Within Institute (RTO 21917). He has more than three decades of experience in the investment industry, and is the author of How to Beat the Managed Funds by 20%, Dale's qualifications include an Advanced Diploma and a Diploma of Share Trading and Investment. He co-hosts the Talking Wealth Podcast, and his work has appeared in The Australian Financial Review, New York Business Journal, Wall Street Select and more.
Lorraine Marshall
July 2, 2023 1.38pm

sick of reading about superannuation , what about self-funded retirees with n o super. no drain on the government.

paul sullivan
July 3, 2023 11.50am

I've been in compulsory super since 1993. Im a semi-skilled employee who is about to retire with a VERY above-average superannuation. Politics aside- IM am very happy Paul Keating made me put aside 3% Super rising to 11% Super this year. Superannuation is great for non-savers!!!