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December Quarter & 2020 Review
Read more: December Quarter & 2020 ReviewEconomic Overview 2020 will be a year of note in the history books. The problems started pre Q1 when spring 2019 bushfires seemed to rage endlessly in parts of Australia, extending into Q1 and contributing to one of the country’s worst bushfire seasons on record. Hot on the heels of the bushfires, the COVID-19 pandemic spread globally, becoming the largest global health crisis since the Spanish flu a century earlier. The international policy response was initially staggered and confused, but much of the world put in place some form of containment, social distancing, or economic pause in an attempt to…
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2020 End of Year Wrap
Read more: 2020 End of Year WrapWhat did we learn in 2020? Our views were mostly reinforced. Have a portfolio built for your circumstances and if you have a plan, stick with it! The following chart of the Australian sharemarket speaks for itself. Large and unexpected falls are never welcome, but riding them out remains the best course of action. We may feel panic and revulsion in the moment, but if you press the exit button, you’re liable to miss a turnaround that can emerge much more quickly than expected. As we hopefully illustrated by the message we presented in this video during the worst of…
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‘Low Risk’ Term Deposit Alternatives
Read more: ‘Low Risk’ Term Deposit AlternativesTough to earn a buck for nothing these days. While that’s always been the case for our labour, there was always the illusion of some free cream from our money in the bank. Illusions, being illusions, this wasn’t strictly true. There was always tax and inflation nipping back any real return for doing nothing. Illusions are comforting though. If an investor thought they were getting a good enough return, then they wouldn’t go out of their way to chase one. An RBA cash rate of 0.10% presents a whole new mind game for investors. Some of the more opportunistic types in the…
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The Value Dilemma
Read more: The Value DilemmaEvery investor will face a conundrum at some point: what to do when their beliefs don’t work. Sometimes it’s an assumption that becomes lore. A favoured company paid a dividend for 20 straight years. Of course, it’s not going to ever stop paying a dividend… then it stops paying a dividend. A dagger to the heart! An outrage, there were plans for that money! An assumption gone wrong. Yet of all the things that can go wrong with an individual share holding, it’s probably a minor one. Sometimes it’s evidence. Academic research has shown certain companies have historically compensated investors…
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2020 September Quarter Review
Read more: 2020 September Quarter ReviewEconomic Overview As to be expected, the ongoing and dominant economic and market theme remains COVID-19. More so than ever, with COVID present no quarter will be quite like the previous. While Q1 was one of steep decline and pain, Q2 was sharp recovery and euphoria, while in Q3 markets took a slightly more subdued, albeit positive direction. Accommodating monetary and fiscal policy kept markets happy. In the US, the economy continued something of a recovery. The Federal Reserve noted it will use average inflation targeting in setting the interest rate, allowing for overshoots in inflation. This means the Fed…
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