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Andrew Main from OnMarket talks through four key points that investors should be thinking about in the wake of the cliff hanger election that has just past. 

1. It’s no disaster, it’s democracy at work
Elections are messy and not always fun to watch, unless you’ve seen some pollie you didn’t like being voted out, but this isn’t a rerun of the Brexit referendum in the UK.

We’ve seen a minority government being cobbled together before in the shape of the Labor-Greens alliance between 2010 and 2013 and contrary to a lot of conservative opinion, it worked surprisingly well.

Bearing in mind that the main purpose of the Federal Government is to pass laws, and that well over half the laws passed go through with bipartisan support. The Gillard government was very effective because per day in office it passed more laws than any Australian government before or since.

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Who do you think will win this year's election?

They include the Gonski school funding overhaul, the National Disability Insurance Scheme (NDIS), lifting the tax free threshold for personal income tax to $18,000, and setting up Justice Peter McClellan’s Royal Commission into Institutional Responses to Child Sex Abuse.

Most of the media coverage since the latest cliff hanger result has been about the difficulties that the Coalition politicians are facing, and the leverage some MPs hope they are going to have, but for the bulk of the country and the economy it’s business-as-usual.

The ASX200 index actually closed on Monday some 35 points, or more than half a per cent higher, after a brief dip in early trading. Much of that came from a lift in commodity prices and resources stocks, but that’s the real world we in Australia live in. Federal elections aren’t the be-all and end-all, and we’re more connected to the rest of the world than we have ever been.

2. We’ll see a move to the centre in terms of policy making
Looked at dispassionately, that doesn’t sound like a bad idea but it will mean that good long term policy may well be sacrificed for the short term political sugar hit of getting legislation passed.

A lot of the Parliamentary debate around legislation will be subject to horse trading and compromises which look likely to ignore Australia’s biggest problem, stubbornly high budget deficits.

Meaning, short term good for investors and savers, long term bad.

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3. Coalition’s cuts to tax breaks
Some of the Coalition’s cuts to tax breaks for superannuation savers look like they won’t be passed by Parliament. If you’re in the 80 per cent of retirees who are on the Age Pension that won’t make any difference to you but if you are a self-funded retiree, that’s good news.

4. Keep Calm and Carry On, in terms of making your financial plans
It’s a near certainty now that the world’s heading into an economically low growth period so you can’t just sit there with your money in the bank and expect to be comfortable in your old age. You’ve got to assume that the government’s not going to throw money at you and that you must get engaged with your finances.

That means learning about investments and keeping an eye on them. “Set and forget” is not an option. One easy way to dip your toe in the water of investing is to put some of your savings into new sharemarket floats.

OnMarket’s smartphone app, which is free, will show you what’s coming up and importantly, will also show you research information about the companies being floated. Since OnMarket started in 2013 the average return on the first day of new floats has exceeded ten per cent. Try getting that from a bank deposit!

What financial stories would you like to read about next? Let us know in the comments below.

(Feature image: 360b/Shutterstock.com)