Markets sit at elevated levels, fuelled by optimism around artificial intelligence and the promise of lasting productivity gains. Yet beneath the excitement lies a complex mix of valuations, momentum, and risk – raising important questions about how investors can stay positioned if sentiment shifts.

Markets are expensive – observations and implications

There is a conga line of analysts, fund managers and commentators pointing out the extremes many traditional or conventional measures of value have now reached.  From price-to-earnings, price-to-book, and market-cap-to-Gross Domestic Product (GDP) to earnings and dividend yields, the U.S. S&P 500 is in rarified air when it comes to the price investors are willing to pay for exposure to future growth. Continue…

by Roger Montgomery Posted in Aura Group, Digital Asset Funds Management, Market commentary, Market Valuation.

• save this article
• POSTED IN Aura Group, Digital Asset Funds Management, Market commentary, Market Valuation.

On November 30, 2022, the world marvelled at the release and conversational prowess of OpenAI’s ChatGPT. What the world might have missed, however, was the subtle shift that began rippling through the U.S. economy.

What started as a viral tech demo – capable of drafting emails, coding snippets, and even poetry – escalated into a full-blown revolution in large language models (LLMs) and artificial intelligence, now described as the fourth industrial revolution. Continue…

by Roger Montgomery Posted in Technology & Telecommunications.

• save this article
• POSTED IN Technology & Telecommunications.

Continue…

by David Buckland Posted in Economics, Global markets, Video Insights.

• save this article
• POSTED IN Economics, Global markets, Video Insights.

Yesterday I joined Jess McGuire on ABC’s Statewide Drive to talk about the artificial intelligence (AI) boom and what it means for investors. While AI may well transform industries and benefit consumers, I cautioned that the rush into AI stocks has pushed valuations to bubble-like levels, where prices assume every company will succeed – something history tells us is impossible. High valuations typically mean lower future returns, and right now U.S. stocks are at record high prices. For investors, particularly those nearing retirement, my advice was simple: regularly rebalance portfolios by trimming back exposure to overheated assets and reallocating to alternatives such as private credit, small company funds, or cash — rather than panic selling — to stay defensive while still positioned for long-term growth. Continue…

by Roger Montgomery Posted in Market commentary, Radio, Technology & Telecommunications.

• save this article
• POSTED IN Market commentary, Radio, Technology & Telecommunications.

Yesterday on Ausbiz with Juliette Saly, I discussed why record-high markets may carry more risks than opportunities. While the artificial intelligence (AI) boom has powered enthusiasm, I cautioned that valuations across the broader market are now at unprecedented levels, with all companies effectively being priced as winners – something history shows is unsustainable. Continue…

by Roger Montgomery Posted in Market commentary, Market Valuation, TV Appearances.

• save this article
• POSTED IN Market commentary, Market Valuation, TV Appearances.

In the sun-drenched suburbs of Sydney and the graffiti-covered laneways of Melbourne, electric vehicles (EVs) are silently zipping around, charging up in garages, and bringing smiles to the faces of those who voted for Labor’s march toward net zero.

It is, without doubt, a feel-good story: cleaner air for the user, reduced emissions for the suburb, and tech-savvy signalling to everyone else on the road. But beneath the glossy ads and government incentives lies a darker undercurrent – one that cybersecurity experts, former military leaders, and national security advisors have recently shouted from the rooftops. Continue…

by Roger Montgomery Posted in Manufacturing.

• save this article
• POSTED IN Manufacturing.

Central banks across the Western world have been busy recalibrating policy settings, with interest rate cuts a common theme over the past 12-15 months. But the reasons for these moves, and the consequences, vary widely between economies. In the following analysis, I examine the recent cash rate changes across Australia, the U.S., the UK, Europe, Canada, and New Zealand, and place them in the context of each nation’s inflation and unemployment trends. Together, these snapshots highlight the mixed progress in taming inflation, the trade-offs being made, and the signals for both savers and borrowers in the year ahead.

I have tabled the cash rate movements from the Central Banks of these six Western World economies, accompanied by some brief economic observations. Continue…

by David Buckland Posted in Economics, Global markets.

• save this article
• POSTED IN Economics, Global markets.

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.