Investing Education

While bubble definitions abound, most fall into two camps: those that measure overvaluation and those that observe the behaviours and conditions that typically give rise to it.

The most straightforward definition of a bubble is asset prices climbing far above some measure of value, such as earnings, dividends, gross-value-added (GVA) or discounted cash flows. Robert Shiller’s famous CAPE ratio, which compares stock prices to long-term average earnings, and John Hussman’s market-cap-to-GVA, were designed to flag these distortions. continue…

by Roger Montgomery Posted in Global markets, Insightful Insights, Investing Education, Market commentary.

• save this article
• POSTED IN Global markets, Insightful Insights, Investing Education, Market commentary

In recessions, it is said, ‘cash is king’. We mustn’t be in a recession because the price of gold has trounced cash. 

In the last 10 U.S. trading sessions, six all-time highs have been registered in the gold price. And gold isn’t the only precious metal receiving a bid. Seven all-time highs have been registered in silver, six all-time highs in palladium, and three in platinum. As an aside, there have also been five new all-time highs in the S&P500 and one in Bitcoin. All have been on significant volume.

continue…

by Roger Montgomery Posted in Investing Education, Market commentary.

• 2 Comments
• save this article
• POSTED IN Investing Education, Market commentary

In this episode of Over the Money Fence, I joined Nicola and Di to unpack two of the most talked-about assets right now – gold and Bitcoin. We explored why gold has surged to record highs, and I explained why investors often turn to it in times of uncertainty. Gold can feel like a safe haven against fears of currency devaluation, central bank policy shifts, or geopolitical risks, but at its core, it’s more of a bet on fear than a long-term investment. I also touched on the practical ways Australians can gain exposure to gold, from bullion and exchange-traded funds to gold mining shares, and the unique costs and risks attached to each. continue…

by Roger Montgomery Posted in Investing Education, Market commentary, Podcast Channel.

• save this article
• POSTED IN Investing Education, Market commentary, Podcast Channel

Since inflation peaked at 9.1 per cent in mid-2022, consumer prices have cooled dramatically, job growth has dwindled from nearly 4 per cent annually to a meagre 0.9 per cent, nominal gross domestic product (GDP) expansion has halved from 10 per cent to 4.6 per cent, and commodity prices have dropped 15 per cent. Despite all of this, bond yields have stubbornly refused to ease. Mainly hovering between 4 per cent and 5 per cent – and sitting at around 4 per cent today – bullish investors argue these yields are oddly, and unjustifiably, detached from the underlying economic slowdown. Real activity has tapered and consumer price index (CPI) inflation has plummeted to 2.9 per cent. So why haven’t yields collapsed? continue…

by Roger Montgomery Posted in Global markets, Investing Education, Market commentary.

• save this article
• POSTED IN Global markets, Investing Education, Market commentary

If you were listening carefully during reporting season, you might have noticed a growing buzz around small-cap stocks, both here in Australia and in the United States.

More investors are now seeing small caps as a hidden gem. Small caps seem undervalued, overlooked, and are showing signs of a strong recovery. 

If you don’t already have an allocation to small caps in your portfolio, now could be the right time to take a closer look. continue…

by Roger Montgomery Posted in Companies, Investing Education, Market commentary.

• save this article
• POSTED IN Companies, Investing Education, Market commentary

I recently read an interesting post on Substack about the state of the market. However, there was one paragraph whose significance might have been missed, even by those who subscribe to the author’s musings.  

Here’s the paragraph in question, followed by what I hope will prove a useful explanation.

The paragraph was titled “No Equity Risk Premium.”

“Meanwhile the macro-middle scenario that has prevailed in 2025 has helped stocks push higher, and with still elevated bond yields that has squeezed the forward-looking “prospective equity risk premium” deeper into the negatives. That may not matter this week, this month, or even this quarter, but it does tell us the forward looking risk vs return set points to an entirely different regime than what we’ve become accustomed to.” continue…

by Roger Montgomery Posted in Aura Group, Investing Education.

• save this article
• POSTED IN Aura Group, Investing Education

There are four major criticisms for holding cash as an investment. But what if there was a simple alternative that went some way to invalidating those criticisms? continue…

by Roger Montgomery Posted in Aura Group, Investing Education.

• save this article
• POSTED IN Aura Group, Investing Education

As we approach September 22, 2025, Westpac is set to redeem all $1.7 billion of its Westpac Capital Notes 5 (WCN 5, ASX code: WBCPH). It’s the beginning of an avalanche of cash to be returned to investors – mostly Boomers – that will need to find a home elsewhere. Why? Because the Hybrid market is being closed down, shuttered or phased out. continue…

by Roger Montgomery Posted in Aura Group, Investing Education.

• save this article
• POSTED IN Aura Group, Investing Education

In today’s dynamic financial landscape, and with public market volatility constantly rising, investors are increasingly seeking opportunities that strike a balance between solid returns and stability and diversification. continue…

by Roger Montgomery Posted in Aura Group, Investing Education.

• save this article
• POSTED IN Aura Group, Investing Education

A recent article in the Wall Street Journal captivated me with its blend of betrayal, eccentric characters, the contrast between opulence and collapse, and the modern-day parable of a crypto catastrophe. In addition to its spellbinding narrative, it reminded me of my mother’s advice to make your friends before you make your money. continue…

by Roger Montgomery Posted in Investing Education.

• save this article
• POSTED IN Investing Education