‘Investing’ Category

$20 oil could be a reality

$20 oil could be a reality

…if this happens…

Watch video here

Rick Maggi
Westmount Financial
Clear Focus. Better Solutions.

Cast in iron?

Cast in iron?

Protecting your portfolio against investment ‘fashion’

Dimensional VP, Jim Parker, discusses the pitfalls of building investment strategies around “hot” sector stories. Read more here

Rick Maggi
Westmount Financial
Clear Focus. Better Solutions.

China: Boom or Bust?

China: Boom or Bust?

…or something in between?

China’s lack of transparency often sends the wrong signals to the rest of the world. We all know that China’s economy has slowed, but is it heading towards a bust, or is this yet another false alarm? Read more here

Rick Maggi
Westmount Financial
Clear Focus. Better Solutions.

Reasons to be optimistic on Eurozone equities

Reasons to be optimistic on Eurozone equities

Not so bad…

Often written off as a ‘basket case’ region, Europe, particularly European shares have some serious growth potential. Does your super fund have exposure to Europe? Read more here

Rick Maggi
Westmount Financial
Clear Focus. Better Solutions.

Australian economy still in the doldrums…

Australian economy still in the doldrums…

More help needed…

Through 2013-14 it seemed the Australian economy was starting to transition away from a reliance on mining investment to more broad based growth. Unfortunately this transition has wavered a bit recently and growth has remained below trend. Fortunately, the RBA has recognised the problem and resumed cutting interest rates. This note looks at the outlook for growth and rates and what it means for profits and investors. Read more here

Rick Maggi
Westmount Financial
Clear View. Better Focus.

Shares surge to new highs

Shares surge to new highs

Planets aligned…

The share market rallied to a six-year high today due to a positive cocktail of factors, including Rio Tinto’s massive shareholder returns, rising oil prices, decent company earnings, the potential for more interest rate cuts, and optimism over Greece and the Ukraine.

The market’s strongest one day gain in six weeks sent the All Ordinaries and S&P/ASX200 indices to their highest levels since mid-2008.

At the close today, the benchmark S&P/ASX200 index was up 133.9 points, or 2.33%, to 5877.5. The broader All Ordinaries index was up 127.8 points, or 2.24%, to 5835.5.

Interestingly, the big miners led the gains, with BHP up 4.8% to $32.17 and Rio Tinto up 6.5% to $63.79 after announcing a $US2 billion share buyback, while RBA governor Glenn Steven’s comments today that more than one further rate cut may be needed if unemployment continues to rise lifted the banks and Telstra as the desperate search for yield continues.

Rick Maggi
Westmount Financial

RBA cuts rates by 25bps, shares rally

RBA cuts rates by 25bps, shares rally

An ‘insurance policy’ for growth…

The official cash rate has been reduced to a new record-low of 2.25 per cent after being left on hold at 2.5 per cent since August 2013.

The Reserve Bank’s decision has come as a surprise: a survey of 30 economists and commentators found that 28 expected the cash rate to remain unchanged.

Westpac, NAB and ANZ all subsequently forecast that rates would fall some time in the first half of 2015.

The two survey respondents who predicted today’s cut were Bill Evans, chief economist at Westpac, and Nathan McMullen, head of product and digital at RAMS.

Mr McMullen said that with consumer confidence and inflation low, the Reserve Bank would cut rates to help boost the economy and depreciate the Australian dollar.

Several of the other survey respondents also gave an indication of what forced the Reserve Bank to act, even though they didn’t expect it to happen as early as today.

ME Bank’s general manager of markets, John Caelli, said growth and consumer confidence have been weaker than the board would like.

“Market sentiment has fundamentally shifted over the past two months as oil prices have plummeted and concerns about deflation in Europe grow. This has led to markets expecting 0.50 per cent in rate cuts in the first half of 2015,” Mr Caelli said.

The cut is being seen by many as an ‘insurance policy’ on growth going forward.

Of course, while this is great news for borrowers, it adds further pressure on investors, particularly retirees, with significant exposure to cash. With that in mind, it will be important for investors in search of a decent yield to be particularly wary of new and wonderful investment products promising higher yields – so please, run it by us before taking the leap!

At the time of writing, the Australian dollar has responded to the rate cut by falling from 0.78 to 0.77, while the local share market has rallied about 1.6%.

Rick Maggi
Westmount Financial

Weather vs Climate

Weather vs Climate

Are you informed or inundated?

Dimensional’s Jim Parker illustrates the folly of trying to keep up with market sentiment based on the news of the day – a quick, easy to understand article worth reading. Read more here

Rick Maggi
Westmount Financial