This note looks at the global economy and financial markets one year on from Lehman Brothers’ demise. The key points are as follows: – The global economy is now in far better shape than was the case in the aftermath of the Lehman Brothers’ collapse a year ago. Money and credit markets have improved dramatically,…
This note looks at the implications of an upturn in the interest rate cycle for investors. The key points are as follows: – With the economic emergency which followed the global financial crisis now fading into history, interest rates will soon start to rise, with Australia likely to lead the way. – While rising rates…
The following notes takes a look behind the Reserve Bank of Australia’s (RBA’s) target cash rate, its impact on commercial lending rates, the $A, and what interest rate changes mean for the economy. Read More
This note reviews the reporting season just ended and equity market valuations. The key points are as follows: – While profits for Australian listed companies fell over the last year, the profit reporting season just ended has been far better than expected. This has been the case globally and share analysts’ earnings expectations are now…
The attached note looks at the equity risk premium – what is it and is it enough? The key points are as follows: – The equity risk premium is the excess return that shares provide over a ‘risk free’ asset like government bonds. – It is perceived that in order to compensate for their greater short-term…
After two weeks of very strong gains, shares are due to a pause. More broadly though, this note looks at outlook for shares. The key points are as follows: – The evidence is continuing to accumulate that shares have embarked on a cyclical recovery. – Further gains are likely: shares are not expensive and an…
As a result of the slump in investment markets last year, most superannuation funds have had another financial year of negative returns, making it two in a row. This note looks at the key issues for investors. The key points are as follows: – While very disconcerting, periodic negative returns from growth assets such as…
This note looks at the outlook for the Australian economy. The key points are as follows: – Australia has so far had a very mild economic downturn compared to other countries and its own history. – However, its likely that the economy went backwards in the June quarter and that this will continue into the…
This note looks as the outlook for listed property securities (or real estate investment trusts – REITs). The key points are as follows: – Given the damage done to investor confidence by their big slump over the last 18 months, listed property securities are unlikely to soon return to their once exalted status. – However,…
Given the complexity of investment markets and investing along with the massive amount of information available to investors many people rely on logic based on ‘common sense’ or simple ‘rules of thumb’ in making investment decisions. However, while some such rules of thumb are reasonable, in many cases they are not and can result in…