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Market Correction Obesession
Read more: Market Correction ObesessionFeeling a little too comfortable? Without a correction, the tired media headline of “X billions wiped off the sharemarket today” has been on hiatus so far this year. In its absence, there has been continued pontification about the overvaluation of shares, hinting about our closeness to a correction, and which of President Trump’s tweets might start any downfall. In other words, if you don’t have any actual news to report, talk about the next best thing – the potential for something to happen. This has been occurring throughout the media landscape, but The Australian Financial Review (AFR) is particularly good…
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The Logical Sequence of Life
Read more: The Logical Sequence of LifeIn the ongoing talkfest over housing affordability it’s clear the only affordability solutions ever given serious consideration by any government are the ones likely to push up house prices. These solutions either give more money to first home buyers or increase the amount of debt they can take on. Both seem like gifts to the inexperienced, but only serve to make housing more unaffordable by adding to demand. As ABC business reporter Ian Verrender recently pointed out: For all the furrowed brows, the sombre looks and the public handwringing from policy makers, no-one is actually serious about fixing the problem…
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Gold – Bre-X
Read more: Gold – Bre-X20 years ago, many investors in Canada thought they’d struck it rich by investing in a company called Bre-X. Company estimates suggested it had potentially found 70 to 200 million ounces of gold at its Busang claim in Indonesia. Making it one of the largest gold discoveries ever. Instead of reaping the rewards of being invested in the world’s largest gold mine, those investors found themselves at the heart of a massive fraud. It was eventually revealed the mining samples from the claim had been salted with gold. To mark the occasion (and gouge old wounds) a movie ‘based’ on those…
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2016 Year in Review
Read more: 2016 Year in ReviewEconomic Overview The dangers of basing investment strategies on media forecasts were highlighted dramatically in 2016 as the outcome of major world events and the market reaction to them confounded pundits. The major news event was Donald Trump’s US presidential election win. The Republican outsider defeated Democrat Hilary Clinton on a platform that tapped into voter anger at “insider” politics and the effects of globalisation. Similar sentiments also fueled the mid-year vote by Britons to leave the European Union, again a largely unheralded result that led to the resignation of Conservative Prime Minister David Cameron. Despite these potentially destabilising events,…
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2016 September Quarter Review
Read more: 2016 September Quarter ReviewEconomic Overview It was mostly a positive quarter for markets, with volatility across equities and fixed income being much lower compared to recent quarters. In the US, the Federal Reserve left interest rates unchanged, but provided a more optimistic assessment of economic conditions at its July meeting, deeming that the risks in the near term had diminished. In Europe, economic data continued to indicate lacklustre growth and low inflation. Annual inflation ticked up in September to 0.4% from 0.2% in August while GDP expanded by 0.3% in Q2, slowing from 0.6% in Q1. In the UK, equities moved higher as…
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