The major development in the global markets over the past month was the rise in the US dollar amid growing confidence that US official interest rates may rise sometime next year. US tightening fears hurt commodities and commodity exporting equity markets such as Australia, and emerging markets like Brazil, particularly hard. Due to the A$’s decline,
The Reserve Bank of Australia’s decision to leave interest rates on hold this month now extends the period in which official interest rates have remained unchanged to 14 months. The extended period of steady interest rates seems unusual to some exasperated market analysts, and has led some to suggest it’s a particularly boring period for
Over the past forty years the United States dollar has experienced several boom-bust cycles spanning between 6 and 10 years. Both history and relative economic fundamentals suggest we may now be in the relatively early stages of the next great US dollar bull run.
Consumer spending accounts for a whopping 53 per cent of the economy (real GDP), so the degree to which households decide to spend or save is critical to the economic outlook. A major positive for spending of late is rising household wealth – which, as seen in chart below, tends to be associated with a
Last month, I wrote a post introducing the concept of active asset allocation, something I am seeing my clients starting to implement a lot more in recent times. In this post for the BetaShares Academy, I continue this theme, and describe some of the benefits that active asset allocation can generate for portfolios. I also
Much has been made this week of the claim by the Bank for International Settlements that local house prices may be seriously overvalued. As seen in the chart below, this is based on the view that the current house price-to-income ratio and house price-to-rent ratios are around 40% and 50% respectively above their “long-run average”.
One of the difficulties in share market investing is that you may invest in an individual stock – due to your positive opinion on an individual company’s prospects – only to see its share price stumble in a market-wide sell-off. This is because when you buy an individual stock, you can’t separate market risk from company
The stunning 121,000 gain in employment during August is too good to be believed, and should be somewhat of an embarrassment for the Australian Bureau of Statistics – especially after last month’s apparent surge in the unemployment rate to 6.4%. The unemployment rate this month dropped back to 6.1%. The drop back in the unemployment rate
With the S&P/ASX 200 Financial Sector index getting close to pre-financial crisis highs, there is understandable nervousness over whether valuations in this sector have already been pushed too far. So is it time to get out of Financials? In the main, the answer appears to be no – earnings expectations are holding up well, and
In the years since the GFC numerous studies have pointed to the fact that, in the majority of cases, actively managed, broad market Australian equity funds are failing to beat the index net of management fees. On the flipside however, the idea of a purely passive strategy that tracks, say, the top 200 stocks on