Author: Martin North

Martin North is the Principal of Digital Finance Analytics

Is Cash To Reign Supreme in 2025?

In the second part of our Twix-Mass series, we look at the use and future of cash. To the surprise of many, banks included, the use of cash is on the rise, and now the Government is looking to secure its use and availability across the country. Assistant Treasurer Stephen Jones told ABC News “We wanted to ensure all Australians — one-and-a-half-million Australians who prefer to use cash — are able to do that.

Cash Welcome founder Jason Bryce says people want access to physical currency and he’s calling on banks to respond to consumer demand. He points out that cash withdrawals have remained steady, despite banks dismantling half of their cash distribution network. While there are fewer bank branches and ATMs, there’s still almost $9 billion in cash withdrawn from ATMs every single month.

So don’t be fooled by the Banking Sector and Lobbyists, who claim we ae going cashless, the truth is very different, and unlike cheques, cash is here to stay – so use it or lose it. And incidentally, use of cash has already been mandated in New York and many Scandinavian countries – the latter some of the first to champion digital payments; and elsewhere too. And why the reversal? Simple, cash is cheaper, more secure, private and resilient especially in a time of digital disruption.

And a final thought, teaching kids the true value of money is much easier with real cash. I had a chat with parents last week who realised their kids had no feel for the value of things as they watched tap and go in play without consequences. Giving them real cash teaches them the finite value of money, a life lesson well learnt – and one which many older Australians would do well to learn.

From Here, Where For The Markets?

This is our weekly market update where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto on the way. And as this is the last full trading week, we will also look back at the last year.

There is a nice meme going round, highlighting that high priced stocks attract, others do not, but that does also beg the question, should we follow the crowd – and is the smart money or dump money lurking there? Sometimes its better to zig when everyone else zags!

The MSCI global index was down 0.59% on Friday, through up 0.88% across the week, and the one-year return was 17.14%, as we will see, driven by tech and US markets in the main. Remember though that light trading and short hours mean the markets are capable of giving deceptive signals this past week.

AMP’s head of investment strategy, Shane Oliver, is warning of a “volatile ride” given the sharemarket’s stretched valuations – the ASX 200 is trading at more than 18 times forecast earnings – and heightened geopolitical risk as Donald Trump returns to the White House. Still, Dr Oliver is tipping the ASX 200 to achieve 8800 points. He said the prospect of better growth in late 2025 should deliver “ok investment returns” with the caveat that a 15 per cent market correction during the year was “highly likely”.

JPMorgan’s Jason Steed is adopting a bearish footing, tipping Australia to be the only major sharemarket to decline in 2025. His target of 7900 implies a decline of about 6 per cent from current levels because of a weaker economic backdrop with gross domestic product below 2 per cent, and a softening earnings outlook.

Finally, in crypto. The overall cryptocurrency market capitalisation approached $3.8 trillion, nearly doubling over the past year. To the surprise of many, 11 bitcoin (spot) ETFs were approved by the SEC early January. Since launch, they have attracted more than $40 billion net inflows and their cumulated assets under management are almost as large as those held by Gold ETFs.

Looking ahead to 2025, an especially complex and uncertain future awaits. Expect a reacceleration of US inflation which will cause the FED to pause more cuts, and add-in the possibility of serious geopolitical shocks, and it is easy to get anxious.

The future is complicated by the advent of the new Trump regime, which renders so many different potential paths and potentially false signals. The partnership between Trump and Elon Musk could be key, if that relationship survives. But given the stretched market valuations and rising inflation risks, as global debt expands further, perhaps its not that surprising that some are taking profits, and waiting to see what happens next. Time will tell.

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Get Your Finances Sorted This Twix-Mass!

The space between Christmas and New Year is often a nothing burger, as we wait for the old year to finally go and new one to arrive.

But this offers the perfect opportunity to check over your finances and ensure you have a clear plan in mind for next year. Over the next few days, I will offer some suggestions which may help you to keep your finances in fine fettle. The trick is to avoid the inertia which financial companies rely on to bolster their profits. But it does take a little work.

A good place to start is to make sure you know how your cash flow sits. My surveys should that more than half of households do not have a good handle on the money coming in and going out. Remember that financial stress as measured by cash flow in registering as high as ever, so more people would do well to get a grip on their cash flows.

Next look at the date for car and house insurance renewals. Write them down. This is important because most will auto-renew, but it is likely your existing company will be price walking you up meaning you will likely be paying more than a new customer would.

Third make a note of your current mortgage and savings rates on your accounts. Keep a note of the current rates you are paying or receiving. And keep up to date with the deals as they come and go. Many banks change rates on their products at odd times, and often do not pass full savings on. Funny that!

Finally, today make sure you know the type of credit card you have, if you have one.

Collect all this information and make a note somewhere you will remember and revisit it often. This could save you thousands across the year and help your finances survive in 2025.

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Shop ‘Til You Drop; Or Not: This Christmas!

Boxing day highlighted the weird financial pressures lurking across Australia at the moment, as shoppers flooded stores to make the most of Boxing Day bargains. More and more shoppers were holding out for a bargain during the festive season as cost-of-living pressures continued to weigh households down. Perhaps It’s really because of cost-of-living challenges that we saw shoppers out in force today. Bargain hunting is a national sport, it seems.

However, while it was once the major shopping event of the year, Boxing Day sales are losing their position against an imported rival.

Consumer advocacy group Choice has warned those entering the Boxing Day fray to do their homework first.

Research from online e-commerce giant eBay predicts Australians could make almost $1 billion from selling unwanted gifts this festive season.

An ABC NEWS Verify investigation has uncovered dozens of online clothing stores pretending to be high-end Australian fashion boutiques. Customers are sometimes shipped cheap, low-quality goods made in Asia, and sometimes, nothing at all. Their investigation focused on stores that had an implied and or explicit physical presence in Australia — ranging from stores using Australian locations in their names to dropshipping stores creating digital images of fake physical shop fronts in Australian locations.

So all up, if you do spend, spend wisely, and be cautious. Bargains may not be bargains and in the online world what you see may not be true. More broadly, in the current financial environment, holding close to your wallet and spending carefully would be a goo new year resolution, even if others want us to spend, spend, spend.

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Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/

DFA Live Q&A HD Replay: Tony Locantro’s Christmas Box

This is an edited version of a live discussion with Tony Locantro, as we review 2024, and look ahead towards 2025.

Tony offers several financial services, such as investment management, financial planning, stock selection and fundraising. Tony has helped countless investors and organisations with strategic investment strategies over the last two decades.

His understanding of market psychology has ensured valued investment strategies in bull and bear markets. Because of his ability to understand the small cap market space, Tony has been featured in dozens of well known publications across Australia, such as Small Caps, Sky Business, Digital Finance Analytics, and many more.

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Its Edwins’ Monday Evening Property Rant!

As we run down to Christmas, we look at the state of play of property with our insider Edwin Almeida, touch on the question population growth and the need for real building surveys, and also remind people to “Think Asbestos” through the DIY season as we commemorate Gill’s death on this day 3 years ago.

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The Shadow Of Asbestos Still Haunts: https://youtu.be/d-zZuBoWzQA

You can join us live next Monday 30th December at 8pm Sydney for our final Rant of the year….

Today’s post is brought to you by Ribbon Property Consultants.

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Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

Destroying Tent Cities Does Not Solve The Housing Problem!

Migration into Australia remains too high, and has directly and indirectly caused a massive rise in homelessness. Tent cities have sprung up, and some councils are now trying to clear them moving homeless people on. So today we look at what caused the problem, and what this means for the homeless.

One academic describes the decision by a homeless person to be seen as a “political act”. “They’re demonstrating their kind of deprivation through living in a tent in the public realm, and I’m glad that it pisses people off,” Cameron Parsell, a social sciences professor at the University of Queensland, says. “We should be pissed off. But rather than being pissed off by the people in the park, we should be pissed off about the lack of affordable housing.”

For all the concern about safety, several service providers said the crackdown risked undermining the group most at risk – homeless people themselves.

There are two schools of thought about safety. Many trust in safety in numbers; clearing a park forces people to adopt the other approach, staying out of sight. That doesn’t always work.

Many believe the crackdown is not about safety at all, but about visibility. Keeping homeless people apart keeps them out of sight.

The Guardian article made no reference at all to the migration problem. But my point is that homelessness could be eased if migration was pulled significantly lower, allowing time to catch up on building, and to get people into homes.

But no, Federal Government keeps the tap open, and councils are moving homeless people on from pillar to post. This simply does not solve the problem, and the social consequences will be enormous.

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Is It Hard Hat Time As The Santa Rally Turns Decidedly Frosty?

This is our weekly market update, where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto along the way.

Recently, we saw markets charging higher, as many markets touched all-time highs again on the expectation of more rate cuts, but that changed this week, following another pivot from the FED and more strong economic readings gave pause for thought. While the U.S. central bank on Wednesday cut its benchmark overnight interest rate by 25 basis points to the 4.25%-4.50% range, it projected only two rate reductions in 2025, citing the economy’s continued resilience and still-elevated inflation.

We also briefly had the risk of a US Government shut down to content with, though that was averted. The messy process of averting a U.S. government shutdown offered investors a glimpse into challenges the incoming Trump administration will face in implementing its agenda, adding a market concern for the coming year. At very least Trump is likely to lead with bold threats and leverage them to push negotiations in his favor. Republican hardliners who normally are ardent Trump supporters are resisting his push to raise the U.S. debt ceiling, sticking to their belief that government spending needs to be pruned and defying his warnings of revenge. “Granted, Trump isn’t president yet, but he will interject ideas at the last minute and there’s no guarantee every member of the Republican Party in Congress is going to go along with his ideas,” said Brian Jacobsen, chief economist at Annex Wealth “That is a formula for gridlock, uncertainty, and volatility.”

And we also had the triple witching, where options contracts expire which added to the complexity.

All up although Friday saw US markets turning more positive again, across the week, drops were widespread, with the MSCI Global index down 2.53%, though still up 16.13% year to date, with the Dow Jones Industrial Average was up 1.18%, but still down 2.25% for the week, its longest losing streak since October 1974. The S&P 500 index gained 1.09%, but down 1.99% across the week while the NASDAQ Composite index climbed 1.07% having fallen 1.78% across the 5 days.

Michael Saylor, Chairman of MicroStrategy, dropped his usual post on X Saylor issued a four-word statement: “Wear a Hard Hat.” as Bitcoin experienced a sharp decline, falling to $94,000 from its peak of over $100,000.

Saylor’s advice could well be true for other market participates too, as given the high quantum of uncertainly in the weeks ahead, wearing a hard hat makes sense as market volume declines over the holiday period, and as many stocks are in over valued territory. It could be a very frosty period for investors.

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Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/