Australian home prices and interest rates

Published: April 9, 2015

Highlights: A housing recovery has been a necessary aspect of rebalancing the economy through the mining bust. While Australian property prices are overvalued, this should not be a constraint on the RBA. Expect another rate cut in May with the possibility of more to follow. The medium term return outlook for residential property is likely […]

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What is risk in investing?

Published: April 1, 2015

Introduction What is risk? Surely that is a stupid question as everyone knows what risk is when it comes to investing. Investopedia ( defines risk as “the chance that an investment’s actual return will be different than expected”. It’s actually quite a complex concept because it could mean different things to different people depending on […]

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China – the usual worries, but no boom and no bust

Published: March 19, 2015

Keypoints: Chinese economic data is off to a soft start this year. However, there are reasons for optimism that growth this year will still come in “around 7%”. Monetary policy is easing, the Government is alluding to more stimulus and the threat from the property slump is receding a bit. While a re-run of last […]

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The Australian economy still in the doldrums

Published: March 4, 2015

Key points: Australian economic growth remains weak at 2.5%. Expect another one or two RBA cash rate cuts and the $A to fall to around $US0.70 by year end. Record low borrowing rates, the falling $A, lower fuel prices and rising wealth should help boost growth to 3% or just over next year.  The recent […]

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Another 21 great investment quotes

Published: February 24, 2015

The market and cycles “The stock market is the story of cycles and of the human behaviour that is responsible for overreactions in both directions.” Seth Klarman Cycles are an investing reality. Not just shares – but also bonds, property, infrastructure, term deposits, whatever. They all go through cyclical phases of good times and bad […]

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Why are bond yields so low?

Published: February 13, 2015

Key Points Bond yields at/around record lows reflect a combination of low inflation, low growth, low interest rates, safe haven demand and falling bond supply. Long term they won’t be sustainable at these levels, but given the historic experience after past periods of falling yields they could linger for a while. Super low bond yields […]

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Australian interest rates still on the slide

Published: February 4, 2015

Key Points The RBA was right to cut interest rates again. Growth is too low and inflation is benign. Expect the cash rate to fall to 2% in the months ahead. Record low borrowing rates, the lower $A and the boost to spending power from lower fuel prices should help boost growth to 3% or […]

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Greece and the ECB – is the Eurozone crisis about to make a comeback?

Published: January 28, 2015

Key Points While Syriza has won the Greek election, a Grexit is not the most likely outcome. Even if Greece were to exit the Euro, peripheral Europe is now in far better shape than in 2010-12 and Eurozone defence mechanisms are stronger. While the Euro likely has more downside, Eurozone shares are attractive reflecting relatively […]

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The threat of global deflation

Published: January 21, 2015

Key Points Falling inflation on the back of falling commodity prices and global spare capacity indicates deflation is more of a threat globally than a surge in inflation. Further monetary easing in Europe, Japan and elsewhere should help head the threat off but it’s worth keeping an eye on. Low interest rates will remain, with […]

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