Why asset prices are so high - in 2 charts.

Jun 15, 2017 admin Alternative Assets, Australian economy, Equity, Fixed Income, Global economy, news 0 Comment

Have you ever wondered why stocks keep heading north, and bond yields keep falling?

The laws of Economics and Finance usually suggest when stock markets are at all time highs (as they are now), that the economy is in expansion; ie it is doing really well. This means unemployment should be at lows, and inflation is probably strong. It also suggests that interest rates are probably high in response to those two measures. But interest rates aren't high... Instead, interest rates are also at all-time lows, or negative in some examples (Switzerland, Europe, Japan).

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Tax loss selling

Jun 12, 2017 admin Australian economy, Equity, news, Property, SMSF 0 Comment

It's that time of year in Australia when everyone gets a little manic. It's not just to do with the impending school holidays and figuring out babysitting schedules, rather it's the last chance to get one's 'house in order'. June 30 represents the End of the Financial Year (EOFY), and in other jurisdictions, it equates to a half year or quarter end. Usual things that happen this time of year include investors taking stock of what is in their portfolio. Some transactions have made good profits, and there are others an investor would prefer not to own. So selling some ‘losers’ can help offset some of the tax effect of gains.

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Global Market Review May

Jun 03, 2017 admin Australian economy, Equity, Fixed Income, Global economy, news 0 Comment

  • The Australian stock market was one of the worst performing in major markets. The ASX200 shed almost 3%, with the Banking sector bearing most of the weight. Putting it in context, if you excluded the Banks, Aussie stocks would have risen 0.3%.
  • Banks sold off almost 10% in partial response to the new Bank Levy hidden in the 2017 Budget, as well as ANZ, NAB, & WBC all going ex-dividend and paying hefty dividends. It should be noted the sector actually added nearly 30% to the end of April, so one could argue there was potentially some profit taking in the mix. The Banks are now trading at PEs of around 12.8x, which is more in line with long term averages (12.1x).
  • Around the world, UK markets did well, lifting almost 5%. On a 12mth basis, UK markets are now up 25%... but that performance can mostly be explained the low start base (BREXIT vote last year).
  • Iron ore prices fell $9.50/t to $58. Oil was a fraction weaker at $50/b. The RBA left cash rates unchanged, and longer term interest rates drifted lower.

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Budget 2017 - My 10 cents

May 10, 2017 admin Australian economy, Equity, Fixed Income, Global economy, news, Property, SMSF 0 Comment

Yesterday was not all about the Budget. An important piece of domestic data came out which (to my mind) highlighted the precarious nature of our economy.

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Beyond Apple’s result; give back your iPhone

May 04, 2017 admin Equity, Global economy, innovation, news 0 Comment

When you consider Apple makes $560 in profit per iPhone 7 sold, it’s hard to imagine the stock selling off on their reported results. This week Apple reported 3rd Quarter revenues of a whopping $44.5 billion. But investors were expecting an extra $1.2billion… so they sold the stock nearly 2% lower. Here are a few other things their result revealed…

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