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Wednesday, 19 January 2022
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Omicron and central bank policy changes have spoiled Christmas, especially for the value of businesses with the most profit growth far in the future. Has the pullback in parts of the global market been overdone?
As business fundamentals improve, the earnings recovery takes over as the primary driver of shareholder returns. The equity market is supported by its real earnings even with the inevitable share price falls.
Dots and dashes have been part of the shape of financial markets for 100 years, and the 'dot plot' is more important than ever. But what are those tiny triangles in the newspaper and are there any lessons from them?
Social media, app and trading platforms that drive retail participation also open doors for greater volatility. Ironically, easy money is contributing to market risks, with shorting hit by spiking to the upside.
Equity valuations are lofty, but long bond rates have now returned to levels before the pandemic crisis. In a balanced portfolio, long bonds now provide more opportunity to cushion the volatility of equities.
After a strong rally since March 2020, markets are increasingly worrying about the threat of inflation and higher interest rates. Ironically, it might be at a time of strong economic growth which benefits companies.
Retail shareholders are being scaled back and diluted by boards and investment banks. If retail shareholders own 30% of a company, the Share Purchase Plan should represent 30% of the overall raising.
The valuation maths of many expensive companies simply cannot work. They assume low interest rates for long terms, but strong economic growth to drive ongoing success. You can't have both.
Frustratingly for investors in micro-caps, the larger companies which now include the WAAAX market darlings are running quickly ahead of their smaller cousins. It's a waiting game for the tide to turn.
Investors are complacent and expect double-digit profit growth to continue for many years, but the market consensus for EPS growth is now in dangerous territory with more downside potential than upside.
A 'Goldilocks economy' is one which runs neither too hot nor too cold. A combination of steady global growth, benign inflation and easy monetary conditions is carrying share markets to higher levels.
Growth assets have defied most predictions and performed well six months on from Trump’s election, but what will be the market consequences of a possible impeachment, using history as a guide.
Most people entering retirement do not see a financial adviser, mainly due to cost. It's a major problem because there are small mistakes a retiree can make which are expensive and avoidable if a few tips were known.
Eligibility for the Commonwealth Seniors Health Card has no asset test and a relatively high income test. It's worth checking eligibility and the benefits of qualifying to save on the cost of medications.
The focus is on Magellan for its investment performance and departure of the CEO, but Douglass says the pandemic, inflation, rising rates and Middle East tensions have not played out. Vindication is always long term.
This is our annual checklist of what retirees need to be aware of in 2022. It is a long list of 25 items and not everything will apply to your situation. Run your eye over the benefits and entitlements.
The Warren Buffett/Charlie Munger partnership is the stuff of legends, but even Charlie admits it is coming to an end ("I'm nearly dead"). He is one of the few people in investing prepared to say what he thinks.
Depending on personal circumstances, it may be time to rethink the bias to paying down housing debt over wealth accumulation in super. Do the sums and ask these four questions to plan for your future.