July 2014 Review & Comments
Written by Tony Gray   
Friday, 08 August 2014 16:09

We are at the very start of reporting season for Australian shares and company updates and guidance comments will give us a much clearer idea of value.

Risks abound internationally – as always seems to be the case.

It has been some time since the last major opportunity to buy growth assets at a discount - during the 2011 and early 2012 sell-off associated with banking and sovereign debt levels in Europe. 

Low interest rates make fixed interest returns unattractive and the other role of this asset class is to provide some security of capital at this time.

My sense is that investors generally are chasing higher income or total returns from shares, property and international assets as term deposits mature.  The risk is that some of these buyers will become sellers when the cycle inevitably changes.  This will present an opportunity at some point – hence my view that at-call reserves can be treated as ‘opportunity’ money.

Ultimately though we buy individual assets and not markets – and fortunately at this time I am happy with a number of specific opportunities.  If we have not spoken during July or early August, then feel free to contact me for a general chat or a more formal review.

Returns have certainly been higher than average in the last couple of years and we are due for a period of negative or lower returns.  This is noted more to instil a sense of caution than fear - the current interest rate/equity yield trade-off is not unreasonable and I am not expecting major falls.

As always, please contact me with any questions about your portfolio or any planning queries.

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.

Note:
If you are visiting the TG office before the 15th of August, then consider bringing in some canned or dry food – we are collecting donations for the Launceston Benevolent Society Can Drive.
Last Updated on Wednesday, 13 August 2014 16:59
 

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