Key points are as follow… After decent gains in shares and other growth assets since February we could have a short term rough patch given risks around the Fed, Brexit, elections, etc. However, with most share markets offering reasonable value, global monetary conditions remaining easy and no sign of the much feared recession (in the…
Key points are as follows… A more dovish Fed, better Australian economic data, higher commodity prices and the reversal of high levels of shorts have seen the $A gain 12% from its January low. It could hit $US0.80 in the short term. However, the bounce is unlikely to be sustained with a continuation of the…
Key points are as follows The Australian economy grew a surprisingly strong 3% through 2015, as non-mining activity and export volumes helped offset the slump in mining investment. Growth is likely to slip back to around 2.5% this year, so a further RBA rate cut is still likely, albeit it’s a close call. Low interest…
Following the slide into bear market territory (defined as a 20% or great fall) by the Australian ASX 200 index last week, the attached note takes a look at past Australian bear markets since 1900 and what determines whether a bear market is mild as opposed to long and deep. The key points are as…
Oil prices are down more than 70% from their levels two years ago driven by a combination of a surge in supply relative to demand and a rise in the value of the $US. Further weakness down to $US20 / barrel is possible, but we are getting closer to the point where supply slows. So…
2016 should end much better than it has started off for investors, ultimately providing ok investment returns, but expect a continued volatile ride. · Watch the Fed, the $US, global business conditions indicators, China and business confidence in Australia. · The investment cycle still favours growth assets over cash and bonds – despite all the…
Key Points are as follows… · Investing during times of market stress and volatility can be difficult. For this reason it’s useful for investors to keep a key set of things – call them rules – in mind. · The key rules I think are: make the most of the power of compound interest; be aware that…
Risks regarding China and the Fed may be receding a bit for now but there remains plenty to keep an eye on including the risk of an “accident” flowing from slower emerging market growth and the plunge in commodities. However, our broad assessment remains that the cyclical bull market in shares is likely to reassert…
Key points are as follows… · Periods of declines and volatility in share markets are a normal part of the way they work. · Share market falls tend to be deepest when associated with recession (particularly US recessions). · Share market falls boost the medium term return potential from shares and once share markets bottom they are invariably…
Uncertainties regarding China, commodity prices, emerging countries and the Fed could see the correction in shares go further in the short term. A disappointing start to the Australian profit reporting season is also not helping Australian shares. · However, this looks more like a correction than a new bear market as we have not seen…