…and what it means for investors.
A sobering, but balanced commentary from AMP Capital's Dr Shane Oliver. Worth a read in this blurry, politics laden post-budget environment. Enjoy! Rick Maggi, Westmount. Financial Solutions.
07/03/14: Australia: Looking beyond the gloom
Cheer-up, it's much better than you think!
In this article, AMP's Shane Oliver focuses on the Australian economy, which has been getting some depressing press lately. Read more here (Rick Maggi, Westmount. Financial Solutions.)
05/03/14: Ukraine: Relief rally (and then some)
A more conciliatory tone
Russian President Vladimir Putin said he saw no immediate need to invade Ukraine while leaving open the possibility of using force, as the U.S. weighed sanctions on Russia and offered aid to the Ukrainian government.
In his first public remarks since Ukraine said its Crimean peninsula was seized by Russian forces, Putin said yesterday he has a duty to defend ethnic Russians in the region and reserved the right to military action. U.S. President Barack Obama challenged Putin’s rationale for intervening, as Secretary of State John Kerry unveiled $1 billion in loan guarantees to Ukraine’s cash-strapped government during a visit to Kiev.
As a result stocks rebounded worldwide yesterday after Putin’s remarks stirred optimism that the worst crisis between Russia and the West since the end of the Cold War is cooling. Putin said troops stationed in Crimea, where Russia keeps its Black Sea fleet, have only been securing their bases. Gunmen who’ve seized crucial infrastructure and surrounded military installations are acting independently, he said. At the time of writing, the US Dow Jones Index had rallied 227 points to 16,395 overnight while Australia's All Ordinaries Index is up 0.60% to 5,444.
And locally...
Perhaps more importantly, today, Australia's quarterly GDP surprised on the upside posting an annualised rate of 2.8% - higher than the 2.5% GDP rate economists were expecting. When coupled with the announcement today, from Chinese authorities, that their growth rate 'goal' for 2014 will remain at 7.5%, this should add more fuel to the overall optimism currently taking hold of financial markets - great news for Westmount clients. (Rick Maggi. Westmount. Financial Solutions.)
26/02/14: The US reinvents itself, yet again!
What does this mean for you?
The US economy is yet again reinventing itself. this has been helped along by a determination to get the US economy moving again after the Global Financial Crisis, but the real drivers are an energy boom, a manufacturing renaissance and American innovation. Read on Rick Maggi (Westmount. Financial Solutions.)
21/02/14: The Economic Clock
Market Update (Friday 21 Feb 2014)
Today the All Ordinaries Index closed at its highest level since 19 June 2008 as Australian company earnings continue to impress, but also following a strong lead from Wall St overnight.
Interestingly, investors have been dismissing disappointing US economic data of late, pointing to harsh winter weather as a reason for unexpected weakness. Instead, investors have been taking a relatively optimistic view, positioning themselves for an improving growth trend in the US, betting that improved earnings will be enough to lift the market further this year.
In other words, sentiment, for better or for worse, is finally taking on a life of its own, pushing up US markets (and in turn our own), despite mediocre to 'ok' earnings results. Of course, we'll need to see concrete improvement over the coming months to justify the optimism, and clearly there are are some headwinds out there if you really want to worry (Fed tapering, lower Chinese and Australian growth, Ukraine debt default etc.), however, for now, our general view remains unchanged - we're still at 8pm, on the 'Economic Clock' (a quaint measure, certainly, but a useful tool just the same) View Economic Clock Here Enjoy your weekend. Rick Maggi (Westmount. Financial Solutions.)
19/02/14: China debt worries and growth
Overdone?
Whether you have a superannuation, pension or managed fund, direct shares or property, what happens in China, the world's second largest economy, matters to your financial health. In this article AMP Capital's Dr Shane Oliver looks more closely at some of the 'noise' surrounding China these days, and whether this is something we should all be worried about. As usual, an easy to understand reader-friendly article from one of Australia's most respected Economists. Enjoy. Read article here Rick Maggi (Westmount. Financial Solutions.)
23/01/14: Expect more...
The risk of a share market correction...
Since 1950 the average cyclical bull market in Australian shares lasted 48 months with a 126% gain. The current bull market has gone for 28 months with only a 37% gain. So where are we now in the cycle? Are we heading into a bear market already or is there more growth to come? Read on… Where are we now? Rick Maggi (Westmount. Financial Solutions.)
22/01/14: 2014: List of Lists
Market & Economic Overview by Shane Oliver
The following is an excellent overview by AMP Capital's Dr Shane Oliver. Definitely worth a read. Read article here Rick Maggi (Westmount. Financial Solutions.)
17/01/14: The Year Ahead
19/12/13: The Fed finally tapers
...and what it means for investors
Overnight the US Federal Reserve announced that it will begin carefully and slowly scaling back its massive stimulus program next month. It is the central bank's first step towards winding back the stimulus that has helped the US recover from its worst recession since the 1930s and a sign that the US economy is recovering.
In response, the US share market surged by almost 2% and at the time of writing, local markets are up by about 1.5%. Our local currency immediately dropped to 88.18 US cents but then quickly recovered to 89.45 US cents as investors digested the news. Most importantly, this should be viewed as good news. AMP Capital's Dr Shane Oliver discusses the implications for investors here. Rick Maggi (Westmount. Financial Solutions.)
30/11/13: Deflation or rising inflation?
What is the risk?
AMP Capital's Dr Shane Oliver looks discusses the potential consequences of a deflationary spiral versus rising inflation on your hip-pocket. Enjoy. Read more here Rick Maggi (Westmount. Financial Solutions.)
15/11/13: China on track
Better than expected...
China's growth cycle is stabilising and that's good news for Australia's economy, our markets, and possibly your super fund. AMP Capital's Dr Shane Oliver weighs in on recent fears over slowing Chinese growth with a typically calm, well balanced commentary. As always, his article is easy to read and not overly technical. Enjoy! Read more here Rick Maggi (Westmount. Financial Solutions.)
04/11/13: Avoiding excess risk in a low-interest environment
Don't upset the fine balance...
The strong growth in the prices of many Australian shares over the past year is attributable, in part, to the buying of yield-hunting investors. A number of high-yielding financial stocks, for instance, are trading at or near to record highs.
Predictably, in the prevailing low-interest environment, many investors are now turning to more concentrated portfolios of high-yielding shares in an effort to maintain their investment yields and their lifestyles. But, unfortunately, this pursuit of yields comes at the cost of undertaking a higher level of risk for an investor's overall investment portfolio.
Rather than exposing portfolios to higher risk and upsetting carefully diversified portfolios in a hunt for income, investors should focus more on a portfolio's total return – that is the combination of its income and capital growth. With this approach, investors in need of more income than produced by a portfolio draw an amount taken from their portfolio's total return, taking into account cash-flow and capital appreciation.
In this way, investors can remain on track to achieving their long-time goals without upsetting their portfolio's diversification and without taking greater risks. Rick Maggi (Westmount. Financial Solutions.)
24/10/13: Retail sales: Light at the end of the tunnel
Looking better...
Retail sales growth has been poor for four years now reflecting a combination of consumer caution, falling wealth, “excessive” interest rates, the strongly rising $A, surging electricity prices, slowing income growth and job insecurity. With some of these factors now fading or set to fade, retail sales growth is likely to pick-up a notch next year.
This should see growth pick up to around 4 to 5% pa from 2-3% over the past four years. Read more here Rick Maggi (Westmount. Financial Solutions.)
08/10/13: The US budget standoff
Here they go again...
With US Republicans and Democrats going head to head over budget and debt negotiations, the rest of the world looks on powerless and bemused. Beyond some of the media hysteria, in this article AMP Capital's Shane Oliver provides a balanced, sober look at the debt ceiling standoff and the likely outcome. Read more here Rick Maggi (Westmount. Financial Solutions.)
25/09/13: The outlook for unlisted commercial property
Have returns peaked?
Australian unlisted commercial property returns have been strong over the last three years, recovering from the GFC driven slump of 2008/09. So can these high returns be maintained or are we moving into a lower return phase? Read more here Rick Maggi (Westmount. Financial Solutions.)
09/09/13: Australia's housing outlook
...and implications for investors
In this commentary, MLCs Senior Investment Strategist, Michael Karangianis, takes a balanced look at our housing sector, contrasting the Australian landscape with experiences overseas. A good, simple read. Read commentary here Rick Maggi (Westmount. Financial Solutions.)
05/09/13: Australian profits, the economy and shares
Another from Dr Shane Oliver
In this update, AMP Capital's Dr Shane Oliver takes a close look at where we are right now in the cycle, company profits and the risks and opportunities going forward. In a background of growing worry over Australia's economy, this is a timely and poignant article. Read more here Rick Maggi (Westmount. Financial Solutions.)
01/09/13: The US fiscal cliff, debt ceiling and economic outlook.
Oliver's Insights for January 2013
This note looks at the deal to avert the US fiscal cliff along with its debt ceiling and broader economic outlook. Generally pretty positive for 2013 (easy reading). Enjoy! Rick Maggi. Read here
29/08/13: Another Asian market crisis?
Potential implications for investors...
AMP Capital's Dr Shane Oliver weighs in on the recent round in emerging market currencies and assets. A cautionary article worth a read. Rick Maggi. Read more here