Happy new year and welcome to the first investment committee report for 2012 keeping you informed with current events.

We look to provide quarterly reports on a number of topics that we feel relevant. We hope you enjoy the first report and welcome any feedback.

Click here to download (PDF 150Kb)

If you have any questions please contact your adviser. Announcer Investment Committee

Margin loans are still out of favour, more than three years after the global financial crisis (GFC) began, with fewer investors than ever inclined to use them - and those that do opting for much more conservative levels of borrowing.

Total margin loan borrowings are at their lowest in seven years, Reserve Bank of Australia (RBA) data shows. Investors have less than $16 billion in margin loans, down from a peak of almost $42 billion in December 2007, nine months before the GFC first took hold.

On average, investors are borrowing about 35 per cent of the value of the securities their margin loan is funding, RBA data shows, well down on 60 per cent-plus gearing during the sharemarket boom and the 60 per cent loan-to-value (LVR) ratios many lenders still allow.

The first day of January means different things to different people. For some it is overcoming the night before, for others it is an opportunity for a fresh start but for those like myself it is the day where you start making your new year's resolution. Curious to see what others listed as their top 10 resolutions I turned to the internet, where else?

... the tough stop spending.

When the income hitting our bank accounts drop we are faced with two decisions we either keep spending as if nothing has changed and start dipping into our savings or we cut back on our expenses to make sure we're still saving towards our long term goals. It seems the government is no different from you and I as we see the effects the European saga being played out. With the government revenues falling and confidence wavering, there is little choice but to cut back on the spending and maintain the surplus target. What this means is that there will be changes in the benefits we will receive. The two that will be discussed here are cuts to the government co-contribution and baby bonus.