Most S&P500 companies are doing well with recent reported earnings above expectations. In the tech sector, the Big Five (Apple, Amazon, Microsoft, Facebook, Alphabet) have also diversified their income sources.
Author Archive | David Bassanese
The major global bond index currently offers a yield of only 1.6% at a time when a rising rate cycle may be starting. There are better risk-return opportunities elsewhere.
The popular ‘cyclically-adjusted’ Shiller PE ratio is historically high and this is often quoted as a sign the market is overvalued, but consider the impact of the current low interest rates.
Active managers on average struggle to outperform market indexes, but do they provide added protection from losses during down markets? And which index should we focus on?
No sooner have global markets digested the Brexit decision and the election of Donald Trump as US President, another risk event now looms on the horizon: Italy’s constitutional referendum on December 4.
Aggressive and sustained policy actions by central banks in the wake of the GFC are threatening the stability of global economies and pushing investors towards higher-risk investment options.
With the cash rate now at 1.5%, the margin between dividend yields and interest rates is at historical highs. However, payout ratios are high and forward earnings growth is subdued.
Australian investors may be wary of the European share market with Greece and Brexit in the news, but there’s a good investment and diversification case, with access now made easier by Europe equity ETFs listed on the ASX.
Fundamental indexing is now well-established in Australia, but has recently underperformed cap-weighted indexes. What is the longer-term outlook and rationale?
In Australia, fund manager performance is most often assessed on pre-tax returns. But a low portfolio turnover can potentially provide better after-tax returns relative to a high turnover actively managed fund.
The empirical evidence in the active v passive investing debate favours index in most asset classes, but there’s a role for mixing the techniques if good managers can be identified – although that’s not easy.
ETFs now offer a wide range of choices including equities, bonds, sector specific, smart beta, geared, commodities and currencies. This opens alternatives for both investing and trading.
Australia’s economy has long had to cope with structural change, which hasn’t stopped quality companies from generating wealth for investors. But with increasing complexity, picking winners and losers will become harder.