Tag: Share Markets

Brexit – what does it all mean for you?

June 26, 2016
  • Uncertainty around the outcome of Britain’s referendum on whether to Remain in or Leave the European Union has reached fever pitch.
  • While a victory for the Leave campaign will likely see more volatility, the global economic consequences have likely been exaggerated.
  • A Leave victory is unlikely to have a major direct impact on Australia but could have an indirect bearing via financial market volatility.
  • The key for investors is to look for opportunities that such volatility throws up.
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Shares hitting bear market territory – the fear of fear itself or something more fundamental?

February 18, 2016
  • The malaise in financial markets is continuing with Australian shares now joining Europe, Japan and emerging markets in a bear market.
  • Global growth worries could drive more short term weakness. But in the absence of a US/global recession it’s hard to see a deep and long bear market.
  • The key for investors is to recognise that periodic declines in share markets are normal, that selling after big declines just locks in a loss, that dividend income from a well-diversified portfolio is little affected by share market volatility and that income flow from Australian shares is now very high relative to bank deposits.
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Review of 2015, outlook for 2016 – more of the same

December 8, 2015
  • 2015 has been a messy year for investors as worries about China, emerging countries and the Fed caused volatility and uneven returns across asset classes. Australian shares continued to underperform.
  • 2016 is likely to see continued okay but uneven global growth, low inflation & easy monetary conditions. While the US is likely to raise rates gradually, other countries including Australia remain biased to further easing.
  • Most growth assets, including shares are likely to trend higher, resulting in reasonable returns. But volatility is likely to remain high as the easy gains are well and truly behind us.
  • The main things to keep an eye on are the Fed, China and the ongoing rebalancing of the Australian economy.
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The perils for investors of too much information in the app age

November 26, 2015
  • The more we are exposed to information about how our investments are performing, the greater the risk that we will be disappointed and at risk of making poor short term investment decisions.
  • The greater access to information around short term investment performance and the ever present worry list around investing via traditional media and increasingly from apps on our phones is likely accentuating this risk.
  • The key is to turn down the volume on financial news and find ways to filter it such that it doesn’t distort investment decisions.
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Crystals and investor worries as we go from seasonal weakness to strength

October 22, 2015
  • 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 itself in the seasonally strong months into year end.
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