Market Update: February 2024

February saw the US markets make consistent All-time highs throughout the months. Locally we did breach all time highs but traded sideways for the majority of the month., however at the time of writing the ASX200 has cracked the 7,800 point level touching as high as 7,850 points.

Market performance is summarised below:

1m 3m 6m 1yr 2yr (p.a.) 3yr (p.a.) 5yr (p.a.)
Australian Shares 0.79% 9.39% 7.42% 10.64% 8.89% 9.32% 8.61%
Australian Listed Property 5.05% 18.68% 13.40% 16.05% 4.16% 10.37% 5.76%
US Shares (USD) 5.17% 11.57% 13.06% 28.36% 7.94% 10.17% 12.85%
World Shares (Hedged) 4.68% 10.73% 11.96% 24.03% 7.25% 8.92% 10.74%

The key market event that nearly all investment managers across the world were watching and anticipating in February was Nvidia’s Results. And they once again blew analysts’ expectations out of the water. Nvidia was priced for perfection, and it delivered seeing the share price jump 16% the day after and as a result climbing to the 3rd most valuable company in the world, above a 2 trillion market cap. This gave the broader US markets the confidence to continue higher.

NVDA 1 yr Chart – look at that RSI!

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Although Gold has only surged to all-time highs in the first week of March, I’m going to include in the February write up, because why not. I last wrote about gold when it touched the 200-week moving average and predicted that this was a perfect time to gain exposure and that call has been spot on. After 4 previous attempts at breaking and holding the $2,080 $US level the 5th time was the charm. Gold will likely continue to run as its price is now in “discovery”, especially since Global Interest Rates are yet to fall which will likely be a tailwind as the trade off of holding gold over bonds/Fixed interest will reduce. You may note that Gol miners aren’t at All-time highs and have some catching up to, the risk to return here for goldminers is attractive and with the positive outlook for gold the same goes for Gold miners.

Gold 4 yr chart – All time highs

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If not the most important update of the month is that for the first time in three years the annual super caps are going to rise due to indexation.

What are the changes?

  • From 1 July the concessional cap will rise from $27,500 to $30,000.
  • From 1 July the non-concessional cap will rise from $110,000 to $120,000. This means under the bring forward rule you can contribute $360,000 in one hit.
  • Concessional caps rise in $2,500 increments and are indexed to average weekly ordinary time earnings (AWOTE), which the Australian Bureau of Statistics said on Thursday had risen 4.5 per cent in the year to November. Non-concessional caps are four times the concessional cap.


What action do you need to take?

  • Anyone who is salary sacrificing to the maximum cap now should look at increasing their salary sacrifice arrangements from July next year.
  • If you have after tax money you want to get into super, it will mean you can get more in. Depending on how much you have a good strategy would be to contribute $110k this financial year, and then use the catch ups once it ticks over to 1 July. This means a person could get as much as $470,000 into super in the next five months. A couple could get a whopping $940,000 in, subject to their age and cap space.
  • If you are using a re-contribution strategy to reduce tax to adult beneficiaries or even out super balances between you and your spouse you should map out your plan, as it could pay to delay triggering the bring forward to next financial year.
  • Beware: If you triggered a bring-forward in either 2022/23 or 2023/24 don’t gain access to the increased NCC cap in 2024/25. This is because the maximum NCCs that can be made under a bring forward are determined in the financial year the bring forward is triggered.
  • Beware: If you are lucky enough to have a super balance above $1.66 million, GET advice on how much you can contribute to super. Contributions are limited by the Total Super Balance (TSB) cap of $1.9 million and how close your balance is to that determines how much you can get into super.

TSB at prior 30 June 2024 NCC cap
$1.9m + $0
$1.78m to < $1.9m $120,000
$1.66m to < $ 1.78m $240,000
< $1.66m $360,000

If you require advice regarding your contribution strategy heading into the end of the Financial year, please contact the office or your advisor directly.

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