Hindsight is a wonderful thing, especially if you’re the one learning from someone else’s experiences.

And when it comes to retirement, being able to learn from the experiences of others is particularly valuable.

HSBC has released their ‘The Future of Retirement’ report, which surveys the experiences of retirees and the expectations of those still working across fifteen countries.

The report’s findings have been described as ‘dire’ and ‘bleak’, yet those terms can often be interchanged with ‘realistic’ and there’s plenty of realism for those planning ahead.

Key points show that nearly 40% of retirees believe they haven’t prepared adequately for retirement and 54% of those people only realised it just before retiring.

For those still in the workforce, 55% aren’t saving at all for retirement.

While 47% of those say they can’t save because of day-to-day living expenses, other respondents’ reasons show a lot of ambivalence.

23% have ‘never really thought about it’ and 17% suggest ‘retirement is too far away’ to save.

And the result of ‘not thinking about it’ or ‘realising you haven’t prepared adequately’ won’t necessarily be offset by lower living expenses in retirement.

That’s a dangerous assumption, with 52% of retirees seeing no reduction in their living expenses at the same time 41% of retirees see their income reduce by more than half.

So what’s to be learned?

From those retired, the best piece of financial advice they ever received was ‘start saving at an early age’, closely followed by, ‘don’t spend what you don’t have’.

Further, there was a definite correlation between getting professional advice and having higher levels of retirement savings.

Those who didn’t do any retirement planning had an average of $112,668 in savings, those who didn’t use an adviser had an average of $252,818 and those who used an adviser had an average of $520,778.

Whether you take advice or not, this report shows retirement is never too far away to plan for.

Economic Overview

Global share markets began strongly in the second quarter of 2013 and the US market hit record highs in May. However the ongoing momentum came to an abrupt halt as the mood shifted and the market moved downwards in late May.

The correction was triggered by suggestions from the US Federal Reserve that it would begin to taper its quantitative easing (QE) program. Currently the US Fed buys $85 billion in bonds each month to keep interest rates low and stimulate economic activity.

While US economic data improved, the markets chose to focus on the stimulus withdrawal. This pulled share markets off their highs, pushed up bond yields and strengthened the US dollar. Compounding the risk retreat were signs China was aiming for a more sustainable growth rate by curbing excessive bank lending. The important area to focus on though is the improvement of the US economy which has promted the hint of stimulus withdrawal.

Japan defied the weaker Asian trend by leading the markets in the region, providing more evidence of a pickup in the world’s third largest economy.

Back in Australia, the economy slowed to a below-trend pace as it began the transition from the resources boom to other sources of growth. The Reserve Bank cut cash rates to record lows in May, noting the Australian dollar had remained stubbornly high despite falling commodity prices and a decline in the terms of trade.

The May interest rate cut and the suggestion of US Federal Reserve tapering combined to send the Australian dollar lower. It moved below parity and hovered near three-year lows, just above the 90 US cent mark. The RBA will be hoping for further declines to help rebalance growth away from mining.

Market Overview

The US Fed’s signalling that it may taper its QE program impacted share, fixed interest, commodity and currency markets. Much of this reflected an unwinding of carry trades, where investors borrow in low-yield interest rate currencies to find higher yield elsewhere.

As US bond yields climbed, the cost of funding high yield trades increased. Consequently, investors sold positions in the Australian dollar, NZ Dollar and Brazilian Real to cover their short US dollar positions. This helped to push the Australian dollar downward and increase returns for international markets in the local currency.

Commodities were substantially weaker, as the US dollar strengthened and China’s appetite was downgraded. Gold’s 23% decline led the way, subsequently punishing listed gold miners around the world, while nickel fell 18% and copper 10%.

This commodity driven weakness was the biggest drag on the Australian market, while gains came in telecommunications, healthcare and REITs.

Again, there are few trends to be found over the past three years of quarterly returns. While Australian large and value offered strong returns in the previous three quarters, they finally slipped to negative territory.

The dominant performance of the quarter came from the Global area, with value, large and small all providing double digit returns. After a previous quarter in the red, emerging markets had a solid quarter, while Australian small caps lagged all other classes significantly.

The New Normal

Early in July 2012, The Australian Financial Review offered a grim prognosis for future growth, with the headline, “Low Returns Shape as the New Normal”. Double-digit annual returns were over for shares, as columnist, Tony Boyd rattled off concerns over Greece, Europe and the US & China.

While over at The Australian on the same day, Robin Bromby confidently assured readers that any market recovery “won’t last” and financial Armageddon could be on the way. Developed market returns a year on from these predictions speak for themselves.

Boyd’s article was backed by RBA governor, Glenn Stevens who’d reminded investors that the returns they’d previously achieved leading up to 2008 wouldn’t be repeated for years and maybe not at all.

Be it journalists huffing and puffing for a headline or our financial leaders offering long considered opinions, the game of predicting financial markets has a way of making us all look like amateurs.

Avoiding Investment Noise

Finally, here’s Warren Buffett in his office and the most striking thing you’ll notice is how basic it is. No technology for charting shares or monitoring financial updates and no TV screen trumpeting the predictions of economists. It’s not what you might imagine from arguably the world’s greatest investor. Given Buffett’s success over the past 50 years his strategy to filter the irrelevant seems to have worked.

Unfortunately, many investors take the opposite approach. They pay attention to the now relentless flow of information and mistake it for actual knowledge. And that ‘knowledge’ comes from the financial media who push the notorious short-term focus of their advertisers – the financial industry.

The financial industry’s intent is to give the impression that trading and reacting to every market movement are normal. At the same time, they purposely ignore the strategies that have been proven to create wealth for investors over the longer term. There’s little point them normalising something that doesn’t make them more money!

Your success isn’t the same as their success. Remember that next time the media tells you “the end is nigh” or some investment will hit big in the future.

With thanks to DFA Australia.

This material is provided for information only. No account has been taken of the objectives, financial situation or needs of any particular person or entity. Accordingly, to the extent that this material may constitute general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation and needs. This is not an offer or recommendation to buy or sell securities or other financial products, nor a solicitation for deposits or other business, whether directly or indirectly.

It’s a question financial advisers are used to being asked, but I suspect it’s something many won’t be asked for a while – “why doesn’t your investment advice include gold?”

On the back of gold’s 15% fall in a month as it slides into the $1300s, it seems few investors will continue to ask the question they were asking at $1,600 and $1,800 an ounce.

The true believers are saying there’s a conspiracy afoot, with Goldman Sachs and global elites crashing the gold price for their own ends.

While others are saying the decline in gold is reflecting economic growth returning in the US and there will be no hyper-inflation stemming from endless central bank money printing.

The reason for the fall is open for debate, but now gold has taken a large dive those people who were so desperate to buy at each new high have some reflection to do.

They need to ask themselves what prompted their urgency to become gold bugs in the first place.

Firstly they need to remember gold is just an object.

It doesn’t produce anything, it has no projected earnings and therefore no expected return – there are no dividends, distributions or interest.

Investing in gold is more speculating than investing because you buy hoping the price will go up.

This hope has been fuelled because many experts (experts who often sell gold) told us we’d soon see rampant inflation, something which hasn’t come to fruition.

Unfortunately, when the price went up many investors were quickly clouded by recency bias, assuming what they’ve just seen happen will continue and then they feel the urge to buy in.

Then there was the alternative option to capitalise on the boom – gold mining shares.

At a quick glance at some of Australia’s biggest listed gold miners, Newcrest, Regis, Evolution and Perseus showed them down between 40-60% since their highs of last year.

This despite each having overwhelmingly positive broker recommendations.

Gold’s fall is not a conspiracy, just another reminder it’s not healthy to fall in love with an asset class or rush to buy one just because it’s suddenly gone up.

Not sure how well I’m read by Generation Y, but if you’re a parent or grandparent reading this you might want to pass on the message.

Kids, the government will soon be soon swallowing your superannuation!

Before I’m being accused of being dramatic, in a nutshell that’s what’s about to happen.

After December 31, the government started transferring ‘lost’ accounts to the Tax Office.

The benefit for the government will be the boosting of Treasury’s wallet by over $550 million in this financial year.

This issue generally focuses on the younger generation because it’s accounts worth less than $2000 that the government will be targeting.

Unidentifiable accounts under $2000 without contributions for 12 months will be transferred.

While accounts under $2000, where owners are contactable, but there’s been no activity for five years, will also be hoovered up.

Essentially, if dormant and under $2000, it might be under threat if you don’t make a move.

That means your money’s future return is dictated by CPI and any insurance policies you had will be eliminated.

Odds are for some young people they’ve had few jobs, possibly accrued a few super accounts and have tallied a small sum of money in each.

That money needs to be consolidated into one active account to avoid it possibly going into a future government black hole.

Now only a cynic would believe that the government truly hopes you won’t come looking, but let’s be realistic, they’ve probably got their fingers crossed you won’t.

And down the line it could be a costly loss for a 20 year old.

$2,000 left untouched in a balanced portfolio from January 1970 would have grown to $110,318 by the end of October 2012, excluding any fees.

The grab for super accounts serves as a timely reminder for those under 30 to get their finances in order.

A good place to start is at www.ato.gov.au/superseeker