ASK THE EXPERTS WHERE TO INVEST $10K

For many of us, 2021 was expected to be our year out of Covid. Businesses were reopening, travel around most of the country was back on the cards, restaurants were at full capacity and theatres, too. But then the dreaded Delta emerged. Small businesses were once again challenged. Some had managed to limp through to 2021 but were now forced into permanent closure as government assistance dried up. And those people who were working in tourism, hospitality and entertainment again bore the brunt of restrictions.

Despite this, our property markets went nuts. Regional properties evened up some of the pricing with their urban counterparts and there seemed to be no end to the market’s increasing heat. The ASX recovered beyond its pre-2020 state and until Evergrande and events in the US gave us the wobbles again in late September we were having a good run.

Last year we concentrated on building up savings again and carefully easing ourselves out of a tough year. This year our experts have thought a little more broadly about the aftermath of Covid. Paul Clitheroe focuses on the money we have saved and how to use it so it passes the sleep-at-night test. Shane Oliver recognises risk will be with us for some time but suggests embracing it with a diverse portfolio. Glen Hare looks at how millennials spend money but says even with a change in priorities to older generations they can still achieve the great Australian dream of property ownership. Jess Amir provides the well-considered list of investments she would put her $10K towards, and Danielle Ecuyer gives tips on where she’d put money on international shares. Meanwhile, Marshall Brentnall discusses why boring can be best when it comes to reaching your goals - and also gives a good example of the benefits of investing in super.

Sustainability has also emerged as a strong trend with global moves towards lower carbon emissions affecting the value of our investments for the future. Kate Campbell, our FIRE (financially independent, retire early) representative, hopes for a better future for our finances and the environment, and supports companies that make the world a better place.

And when it comes to property, Simon Pressley urges us to look beyond the city limits and take a closer look at what is happening in urban centres.

PAUL CLITHEROE

Money’s founder and editorial adviser

Uncertainties abound, but get ready for a lifestyle spending splurge

It’s pretty much an accident, but a year after I was writing about the new world dominated by Covid, things have eventually panned out to be okay, with money at least. A year ago, the sharemarket was climbing back from its March 2020 All Ordinaries Index low of a bit under 5000. Governments globally were pumping out money and to little surprise the market had ridden up to 6000. Now it’s getting close to 8000 and investors in shares have enjoyed governments shovelling money to people and businesses while interest rates are at record lows.

Cheap money – and lots of it – looked like a nice time for markets and, sure enough, it has been 12 months of very handsome returns for shareholders and some nice dividend payments.

Obviously, it has been a shocker for those relying on interest from term deposits and bank accounts. The good thing about these investments in our banking systems is that they are safe and secure. I’ve always advocated having safe money at the bank to cover our spending in market downturns and other nasty periods of history. For a younger person, in a secure job, this might be a small amount. For part-timers like me, in my mid-60s, I like the idea of having a couple of years of spending money at the bank. I don’t want to sell assets at discount prices in a market bust to cover lifestyle costs. As I move to full retirement, if ever, I’d hold closer to three years of lifestyle spending.

Where I have been surprised is the boom in most property markets. Cheap money is clearly great for property. I shook my head when I saw a 1.5% mortgage advertisement this week. But last year I worried that job losses and small business failure could balance things out, so