The Reserve Bank of Australia (RBA) reduced the official cash rate by 0.25% last month, with the intent of jumpstarting Australia’s economy. With the official cash rate now at a record low of just 1%, it’s important to consider the implications for investors.
Following a Planned Investment Strategy
Robin Bowerman of Vanguard highlights the importance of following a planned investment strategy;
- Don’t reach for return.
- Control what you can. You can’t control financial markets, so focus on what you can control.
- Understand the role of bonds in your portfolio. Bond prices fluctuate with interest rates, but remember that income is only one reason to invest in bonds, and not the most important one.