Welcome To 'Your Advantage'

Welcome to the first e-newsletter from Advantage One - 'Your Advantage'. This newsletter will provide you with a wide range of business related news and information, useful knowledge, profile some of our team members, introduce some of our clients and keep you informed of upcoming seminars and events.

We value your feedback so don't be backward in coming forward! Feel free to send suggestions, comments or your opinions to info@advantageone.com.au

We look forward to hearing from you and hope you enjoy 'Your Advantage'.

Article of Interest: Jack’s Survival Tips

As the actor who always keeps his cool in a fix, if trading in today’s sharemarket, Jack Nicholson might operate in accordance with his movies something like this...

As Good As It Gets
We all miss those 15 glorious years after the sharemarket crash in 1987 when the bulls roamed freely and anybody could make money. Forget the days of double-digit returns and reassess your expectations. Search for realistic returns – 6 per cent a year above inflation is healthy in a market like this.

One Flew Over The Cuckoo’s Nest
You would have to be crazy to put all your money in speculative companies that have great ideas but no earnings history. Buy stock in companies that make things that people use every day – for example, food. Go for stocks trading on low price earnings multiples that have good fully franked dividend yields.

Easy Rider
Do not chase trades that are not there – slow and steady wins the race now. Solid research and patience will be rewarded. When a low-risk, sensible trade emerges, if you are sure, invest and monitor closely, with rigid stop-loss controls.

A Few Good Men
Now, more than ever, the skill and experience of your financial planner is vital. It may be a good time to forget the no-frills, discount brokers. Look for a full-service planner who has a solid reputation and specialises in blue-chip stocks, and keep an eye out for experienced advisers who have been through bear markets before, not just 28 year olds who have seen nothing but easy markets.

The Postman Always Rings Twice
Bear markets do not last forever. Once the speculative excesses are worked off by fall share prices, bull markets resume. Use this time to brush up on your study. Read more books (and magazines!) about the sharemarket, and don’t lose interest now – the more you prepare, the easier it will be to make money when the bull returns.

If you can think of any other Jack Nicholson movie that neatly fits today’s market, we’d love to hear it. E-mail granth@advantageone.com.au

Acknowledgement: Leverage Sept 02

date of article: 1 November 02

Our Opinion: Small Business Face Higher Risk Nightmare

Small businesses are being crippled by escalating insurance costs and risk management, according to a national survey conducted by CPA Australia in July 2002.

According to the survey, around 30,000 small businesses depend on one major customer for most of their income. Tony Martin, Advantage One Director, says:

“Diversification is the key to survival. The recent corporate collapses (eg Enron, HIH, OneTel etc) illustrated big business is not immune to failure. Many small businesses pay the ultimate price when they tie themselves to a business they have no control over.”

In addition to the above, small business also identified an economic downturn in Australia, a drop in sales, failure of major customers’ business and interest rate increases as some of the biggest threats to business.

Two thirds of small businesses see lack of insurance cover as the biggest risk and over 60% think that insurance premium increases will hurt their performance.

“Managing the problem was taking more time away from their core business. Government needs to pursue its initiatives in this area to avoid a crisis situation among small businesses”, Mr. Martin said. “Unless controls are put in place immediately to limit exposure, SME’s will continue to suffer. Their ability to drive their business performance will continue to be diluted.

They are faced with rapid escalation of premium costs as well as being confronted with increasing levels of litigation and ever increasing liability payments.

It’s a lose-lose situation for SME’s. Even if litigation falls in their favour, it’s an enormously expensive exercise, both in terms of money and time”, Mr Martin said.

Despite this, only one third of SME’s have considered strategies to deal with insurance problems, with some having no plans to cope with the crisis. One in two businesses would operate without insurance if they were confident they could protect their assets from claims.

The survey also found that almost half would not do anything to prepare their business for interest rate rises.

“The most common response to rate rises is to increase prices. Few businesses considered options like business improvement techniques, re-financing, debt reduction or re-negotiation with their banks. Clearly it’s time for those at risk to get smarter, seek advice and take a good look at their business and seek to develop some fall back strategies”, advises Martin.

date of article: 1 November 02

Coming Seminars/Events

How world events affect your returns,...and how you can turn it to your advantage.
Look out for this investment update seminar early December

All Bases Covered - 10 strategies to minimise tax, protect your assets and maximise your retirement.
Date to be advised

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