Market commentary
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Where to invest if the economy heads for a hard landing
Roger Montgomery
May 20, 2022
Right now, there’s no shortage of pessimistic forecasts for the U.S. economy. You need only look at recent reports from the likes of Morgan Stanley, Goldman Sachs and JP Morgan. These bleak forecasts have many U.S. investors talking up the probability of a bear market in equities. In this environment, careful stock selection will be more important than ever. continue…
by Roger Montgomery Posted in Editor's Pick, Global markets, Market commentary
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Why every setback is accompanied by a different narrative
Roger Montgomery
May 16, 2022
In this week’s video insight Roger discusses why setbacks are a necessary part of investing, especially for those keen to realise better returns. Remembering that the lower the price you pay, the higher your returns, it makes sense that we should welcome market pullbacks. Eventually, there will be an end to rising interest rates and eventually, inflation will peak. continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary, Video Insights
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Have bad calls eroded the credibility of Central Banks?
Roger Montgomery
May 11, 2022
Just over a year ago, the US Federal Reserve said inflation was ‘transitory’. Six months later, it said it would not need to raise interest rates above zero. Yet, just last week at its May meeting, the Fed announced it would need to raise rates 0.50 per cent in the face of soaring and persistent inflation. Is it any wonder many people feel the Fed is out of touch, and have lost faith in its policies and prognostications? continue…
by Roger Montgomery Posted in Market commentary
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Aura High Yield SME Fund: Letter to Investors 06 May 2022
Brett Craig
May 9, 2022
This week we saw the RBA introduce the first rate rise since November 2010, bringing the cash rate to 0.35% in response to the current inflation-driven economic environment. continue…
by Brett Craig Posted in Aura Group, Market commentary
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Taking advantage of the bears
Roger Montgomery
May 5, 2022
With market indices sliding, the bears are emerging from their hibernation to shout ‘I told you so’. Markets, especially equity markets, inevitably journey through periods of negative returns, so eventually, the bears must be correct. continue…
by Roger Montgomery Posted in Market commentary
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WHITEPAPER
VALUE AND GROWTH: TWO SIDES OF THE SAME COIN
The investment industry and media spend a lot of time discussing ‘value’ versus ‘growth’ investing – and which of them is currently winning. But we don’t believe they’re opposite concepts. Investors should consider both ideas together as they seek out quality companies with bright prospects that will deliver rewards over time.
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Higher interest rates equal lower PEs
David Buckland
May 3, 2022
When I joined the financial market in the 1980’s as a young graduate, I was given a simple rule from an old-timer which went something like this: “Son, the market PE plus long-term inflationary expectations should equal 20.” At the time, Australia’s inflation rate was coming down from 12 per cent, and the market PE approximated 8x. continue…
by David Buckland Posted in Economics, Market commentary
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Are Central Banks tightening too late as inflation hits 30 to 40 year highs?
David Buckland
May 2, 2022
In this week’s video insight David discusses how rising interest rates will impact indebted households and the knock-on-effect. The psychological boost and wealth effect enjoyed from strongly rising house prices will likely be missing in the foreseeable future and this means indebted households are more vulnerable to Central Bank tightening late in this inflationary cycle. continue…
by David Buckland Posted in Market commentary, Video Insights
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Macquarie’s economic update part 3 – Will mining save the Aussie economy?
Roger Montgomery
April 27, 2022
As highlighted in the preceding two articles, Macquarie Bank economists, Ric Deverell and Hayden Skilling, see darker times ahead for the US economy and equity market. But their outlook for our economy and equities is more nuanced. Australia will benefit from the race to decarbonise, with some commodities doing particularly well. For investors, it means careful stock selection will be the order of the day. continue…
by Roger Montgomery Posted in Market commentary
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Macquarie’s economic update Part 2 – In the US, winter is coming
Roger Montgomery
April 26, 2022
In their latest global economic update, Macquarie Bank economists, Ric Deverell and Hayden Skilling, paint a far from rosy picture of the year ahead. For the US they see rising interest rates, a slowing economy and a strong chance of a recession. And their views on returns in equity markets are bleak. If they are correct, then it’s time for investors to be extra cautious, and to focus their portfolios on quality and growth. continue…
by Roger Montgomery Posted in Global markets, Market commentary
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Macquarie’s economic update part 1 – Inflation, war and COVID
Roger Montgomery
April 22, 2022
Recently, Macquarie Bank economists, Ric Deverell and Hayden Skilling, provided their much anticipated global economic update. It includes insights into how COVID and Russia’s invasion of Ukraine are impacting supply chains, inflation and interest rate expectations. It also includes their somewhat bleak views on the outlook for property and equity markets. I’ve summarised the key take-outs in four blog posts. Here is the first one. continue…
by Roger Montgomery Posted in Global markets, Market commentary
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