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Liquidity is a concept critical to understanding investment markets.

Back in mid to late 2022, we wrote several posts on our blog and articles in The Australian, compelling investors to consider and pay attention to the very low price-to-earnings (P/E) ratios at which equities were trading. Continue…

by Roger Montgomery Posted in Economics, Market commentary.

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• POSTED IN Economics, Market commentary.

I recently met with a young investor and trader, who was just beginning their market journey. During our conversation, he noted he was currently biased towards a market correction but was waiting for a catalyst.

The idea that a catalyst is required for a stock market correction is a flawed one. Corrections can occur without an apparent trigger – just ask those people still debating the cause of the 1987 crash (also known as Black Monday), a severe unexpected stock market crash leading to a worldwide loss of ~US$1.71 trillion).

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by Roger Montgomery Posted in Global markets, Market commentary.

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The debate about whether Australian retirees in pension phase (paying no tax) are better off in ASX-listed stocks, or the U.S. companies of the S&P 500 continues to rage.

Australian listed companies are known for their relatively high dividend payout ratios. It is estimated that, in aggregate, about 80 per cent of ASX 200 company profits are paid out as dividends. 

Part of the reason is that our tax system causes companies to accumulate franking credits that have zero value to them but huge value to retiree shareholders. Continue…

by Roger Montgomery Posted in Investing Education.

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Sales of new vehicles in Australia depict a clouded and muted picture. The market has faced its seventh decline in the last eight months, with February sales down 7.9 per cent compared to the same period last year. However, it’s important to note that the February 2025 figures represent the second highest February volume on record, surpassed only by last year. Continue…

by Roger Montgomery Posted in Manufacturing.

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Qantas (ASX:QAN) has posted a significant rise in half-year profits, demonstrating continued momentum in the airline’s post-pandemic recovery. The company reported an underlying profit before tax of $1.39 billion, an 11 per cent increase compared with the same period last year. Statutory profits also climbed by 6 per cent, reaching $923 million. Continue…

by Roger Montgomery Posted in Companies.

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It hasn’t been widely reported (which could, of course, mean I am about to repeat the common mistake of reading too much into a central banker’s utterances), but earlier in March, Federal Reserve Chairman, Jerome Powell, dropped a subtle remark that may shed light on the central bank’s mindset. As the Federal Reserve heads into its meeting this week, Powell’s words may also carry weight for the unpredictable economic road ahead. Continue…

by Roger Montgomery Posted in Global markets, Market commentary.

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Electric vehicles (EVs) have been hailed as the future of transportation, promising a cleaner, greener alternative to traditional internal combustion engine (ICE) vehicles. Governments worldwide have pushed EV adoption through subsidies, tax credits, and ambitious targets, while car manufacturers have invested billions to electrify their fleets. However, announcements from major automakers, as well as recent data and surveys in the U.S., Australia, and Europe, suggest EVs may not be the wisest purchase for consumers today. Continue…

by Roger Montgomery Posted in Manufacturing.

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The front-of-mind topic for investors, now that reporting season is over, is what Trump’s trade wars and tariffs, the potential of an end to AI-related stock leadership, and general volatility mean for the stock market’s outlook. Today we touch on one of the bullish arguments I came across in my readings. Continue…

by Roger Montgomery Posted in Global markets, Market commentary.

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Back in February in our blog article Disinflation’s Bumpy Road we wrote: “With valuations now appreciably higher than at the beginning of 2023 and 2024, and now arguably stretched in parts of the market – particularly in high-growth tech – investors had been counting on rate cuts to justify further gains. But if the Fed remains on hold, or worse, if markets begin to price in a “higher for longer” scenario, equity risk premiums might have to adjust.”

The ‘Magnificent 7’ stocks (Microsoft, Amazon, Alphabet, Meta, Nvidia, and Tesla) appear to be rolling in neutral gear, with an observable slowing in earnings growth. To be clear, earnings are still growing but the rate of growth is slowing down. So what does this all mean? Continue…

by Roger Montgomery Posted in Global markets.

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Telstra’s (ASX:TLS) latest half-year financial results, released yesterday, tell a story of modest gains, underpinned by cost control rather than broad-based expansion, raising important questions about the company’s path to sustainable growth. Continue…

by Roger Montgomery Posted in Companies.

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