Introduction After the political and economic failure of last year’s budget, this year’s Budget represents a significant change in focus for the Government. Not only was it relatively ‘boring’ with no major surprises, but the focus on dealing with a ‘budget emergency’ has been replaced with a new focus on ‘boosting jobs, growth and opportunity’ […]
Introduction The last few weeks have seen the investment scene hit another rough patch: US shares have had a fall of less than 2%, but for Japanese shares it was 4%, Australian shares 6%, Eurozone shares 7% and Chinese shares 9%. This note takes a look at the key drivers, whether it’s a correction or […]
Key points: The RBA's latest rate cut along with downwards pressure on the value of the $A should help Australian economic growth pick up to around trend next year. While 2% is likely to be the low, further cuts cannot be ruled out, particularly if the $A remains too strong. For investors: expect bank term […]
Introduction It is now six years since the global financial crisis ended. From their 2009 lows US shares are up 212%, global shares are up 159% and Australian shares are up 91% (held back by higher interest rates, the commodity collapse & the high $A). Despite this, there seem to be constant predictions of a […]
Highlights: A housing recovery has been a necessary aspect of rebalancing the economy through the mining bust. While Australian property prices are overvalued, this should not be a constraint on the RBA. Expect another rate cut in May with the possibility of more to follow. The medium term return outlook for residential property is likely […]
Introduction What is risk? Surely that is a stupid question as everyone knows what risk is when it comes to investing. Investopedia (www.investopedia.com) defines risk as “the chance that an investment’s actual return will be different than expected”. It’s actually quite a complex concept because it could mean different things to different people depending on […]
Keypoints: Chinese economic data is off to a soft start this year. However, there are reasons for optimism that growth this year will still come in “around 7%”. Monetary policy is easing, the Government is alluding to more stimulus and the threat from the property slump is receding a bit. While a re-run of last […]
Key points: While Australian shares remain in a longer term period of underperformance relative to global shares and US shares are also relatively vulnerable in the short term to Fed rate hikes, European shares look attractive. Eurozone shares and growth assets generally are likely to benefit from a combination of aggressive monetary easing, the lower […]
Key points: Australian economic growth remains weak at 2.5%. Expect another one or two RBA cash rate cuts and the $A to fall to around $US0.70 by year end. Record low borrowing rates, the falling $A, lower fuel prices and rising wealth should help boost growth to 3% or just over next year. The recent […]
The market and cycles “The stock market is the story of cycles and of the human behaviour that is responsible for overreactions in both directions.” Seth Klarman Cycles are an investing reality. Not just shares – but also bonds, property, infrastructure, term deposits, whatever. They all go through cyclical phases of good times and bad […]
