October 2015 Review & Comments
Written by Tony Gray   
Tuesday, 24 November 2015 11:00

There are a sizeable number of company issues (rights and purchase plans) occupying our time, so do not be shy in contacting us with questions about your portfolio.  On this point, if you own Origin Energy shares and participated in the rights issue, then the October portfolio value was understated - payment was in late October, with stock allocated in November.

Market & Economy Comment

During October, prices of growth assets generally recovered and what was threatening to become a bear market appeared to have simply been a correction.  Thus far in November sentiment has again turned negative and prices are re-testing recent market lows.

The main market concern at this time relates to an imminent rise in US Federal Reserve interest rates – with long bond yields already well above 2012 lows.   Australian 10 year government bond yields trade at a low premium to US bonds.  This suggests money markets are not anticipating domestic inflation or a higher rate of economic growth.

In a normal cycle weakness in share prices and lower long bond yields point to weaker future economic growth.  Most economists do not seem to consider a recession to be likely any time soon and one positive has been the improving employment numbers.  This noted, economists rarely predict recessions in advance.  We remain wary.

Portfolio Positioning

Most portfolios hold extra at-call monies, with below neutral exposure to Australian equities and listed property, but maintaining international share exposure.  We have applied some ‘opportunity’ money across a range of assets in recent months.

We remain concerned about excess gearing in the banking sector and it is no surprise to us that IT and Property Developers dominated the BRW Young Rich List in 2015!

We continue to apply surplus funds to a range of assets where we can reasonably see a worthwhile sustainable return but seek to hold on to portfolio gains.

 

Best wishes,

 

 

A.W. (Tony) Gray BCom, LLB, Dip FP, GDipAppFin, CFP, FFin

Principal, TG Financial

 

Please treat the above comments as General Advice or general information, with no action to occur until we have considered with reference to your financial position, needs and goals

Last Updated on Tuesday, 24 November 2015 11:16
 

Portfolio Management


Latest News

Please treat any facts or opinions on this website and associated articles as NOT representing personal advice.  Please seek personal advice relevant to your financial circumstances, needs and objectives.