With the reporting season before us, an uncertain economic outlook both globally and locally, investing in Australian Shares today is fraught with danger. If seeking equity risks, irrespective of attractive valuations, I believe dollar cost averaging is the only way to go. Send article as PDF
Monthly Archive: January 2009
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Jan 27
Asset Class Views
Cash Expectations are quite strong that short term interest rates will drop quite rapidly due to slowing global and Australian economy Australian Fixed Interest General expectations are that investors will continue to move from equities to bonds and cash due to a current environment of risk aversion. Downside risks are that bond prices are at …
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Jan 23
Thoughts on the outlook for bonds
Bonds were not surprisingly the highest performing asset class in 2008. Advisers can expect increased promotion of bonds by BDMs and fund managers and the issuance of new products (eg the new Vanguard Australian Government Bond Index Fund). What is our view? · Australian Bonds: Neutral, with a likely move to underweight· International Bonds : …
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Jan 22
Active Management Struggles in 2008
The Morningstar rankings for all major asset classes were released this week and once again, the results do not look particularly promising for active managers in the fixed interest and property securities asset classes. Some of the more interesting outcomes for investment returns at the end of 2008 include: Fixed Interest Results… Vanguard and Barclay’s …
Jan 21
Credit Suisse International Fixed Interest or Credit Suisse Global Income
Just to sort out the differences which by their name alone doesn’t appear to be much… · Credit Suisse International Fixed Interest is a global bond fund and has been sold to Aberdeen…its quite a conservative fund that invests in very high rated fixed interest investments…on the other hand… · Credit Suisse Global Income is …
Jan 21
Tactical Asset Allocation in the Defensive part of the portfolio
I received a call from an adviser earlier in the week who wanted my opinion in terms of increasing a client’s allocation to Colonial’s cash account and reducing the allocation to Colonial’s Diversified Fixed Interest fund. For 2008 these 2 funds returned around 6.5% and 0.1% and the adviser’s thoughts were that these returns suggested …
Jan 20
Volatility ‘and Fear’ Creeping up
Source: Bloomberg The above chart is everyone’s latest favourite, the VIX index (otherwise known as the Fear Index). Today it closed at 57, up from 50 at the start of the day, and as can be seen it is creeping back up towards those October and November levels. Given the S&P500 closed down today by …
Jan 20
Trends for 2009
Demise of the “absolute return” hedge fund…they said they can provide positive returns in any market and in 2008 they didn’t deliver. Marketing hype that will hopefully go away and replaced with full transparency that discloses where their true risks lie. On the positive side, many hedge funds are wonderful investment vehicles that have the …
Jan 19
Short Selling Ban
This morning, The Sydney Morning Herald suggested that when the short selling ban is lifted AMP, NAB, QBE and Wesfarmers are stocks that are “most likely to come under pressure”. If this is true, what on earth do hedge funds or short sellers know that the rest of the “long only” funds management industry, stock …
Jan 19
What will the RBA do next?
If you want know what the RBA is likely to do next, there is probably no better chart to look at than the yield curve of Australian Government Bonds. With the lowest point being around 2.75% at the 2 year maturity and the 15 year rate barely above 4%, clearly the market believes rates are …