News Updates
As it Happens
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.)
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.)
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.)
If you're not sure if you need or want financial advice, perhaps thinking about doing it all yourself? Read on...
Read 7 Good Reasons Read Robert Kiyosaki's Blog
Rick Maggi (Westmount. Financial Solutions.)
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.)
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.)
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.)
Earlier today, the US Congress agreed to end the partial government shutdown and raise the debt ceiling. Some positives...
1. While the run up to the 11th hour decision indicated that brinkmanship is alive and well in the US, the clear message is that at the end of the day the majority of US politicians will not let the US default on its debt servicing or broader spending commitments. As Winston Churchill once said "you can always rely on the American's to do the right thing - after they've tried everything else".
2. While the brinkmanship seen in the US on a semi-regular basis is not good for confidence, it is not all bad as it has let to a more balanced solution to US budget and debt problems than would have been the case if either side of politics had complete control.
3. The legislation for the temporary fix appears to include a rule that would allow the President to increase the debt ceiling unless Congress voted against it with a tow thirds majority in each chamber. Such an approach could allow the Republicans to vote against a debt ceiling increase in February but not stop it.
4. Finally, having been so badly burned over the last few weeks, Republicans may not be so willing to set off another Government shutdown and/or debt ceiling crisis early next year. Americans appear to have largely blamed them for the latest crisis and their favourable rating dropped to the lowest level in 20 years. With the mid-term Congressional elections coming up next year, they may not be prepared to risk a re-run or worse as it could mean they will lose control of the US House of Representatives. So another extreme showdown may end up being avoided next year.
With the worry list continuing to diminish, many believe that shares are likely to rally into year end with further gains next year, with some predicting that Australian shares could hit the 5500 mark by year end and 6000 by 30 June next year. While this may seem overly optimistic, an ASX at 6000 would still be about 13% below its all time high from 7 years earlier. Rick Maggi (Westmount. Financial Solutions.)
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.)
Last night, the US Federal Reserve decided that the US economy just isn't strong enough (yet) to begin tapering off its $85 billion per month bond buying program (ie printing money). At the time of writing, global markets have reacted predictably, pushing share markets to all time highs, and here in Australia to a five year high.
All eyes on November/December for the next instalment. In the meantime, enjoy the market bounce, but be careful out there. Rick Maggi (Westmount. Financial Solutions.)
On Thursday our time, the US Federal Reserve will likely make a statement about their quantitative easing program. Most are expecting the US central bank to begin 'tapering off' bond purchases (or in layman's terms - printing money) between now and November. While no one expects anything too extreme, this signifies a change in approach and needs to be considered by investors. If you're wondering what this all means (it's a technical area), please call me personally. Read more here Rick Maggi (Westmount. Financial Solutions.)
One old adage about investment is that you buy a bunch of reliable stocks, stick them in your bottom drawer and forget about them. That ignores one pesky fact: Nothing stays the same. Read more here Rick Maggi (Westmount. Financial Solutions.)
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.)
