Each time share markets sell off suddenly, investors need to ask whether it’s a real crisis or a false one. Here are some current issues to consider amid the optimism that has pushed markets in 2019.
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The Australian market again delivered strong returns in 2017-2018 with big sector differences, but there were large variations in global performance depending on the currency hedging strategy.
The widely-used cyclically adjusted price-to-earnings ratio (CAPE) is at historic and relative highs in the US. The co-inventor of CAPE, Robert Shiller, is advising not to give too much weight to US equities.
The markets successfully negotiated many fear factors in 2017 and rewarded investors. What does 2018 bring for Australian and global shares, listed property and fixed interest?
‘Grey swans’ are surprises that are improbable but more likely to occur than ‘black swans’, and investors should consider the possible impact on their portfolios. Some of these swans will paddle by this year.
Investors celebrated when the Dow broke through the 20,000 mark last month, but in real terms, it’s a more sobering picture. Australian stocks in particular are struggling to reach their previous heights.
Learning about investing is a long journey and the recent period of market turbulence offers valuable lessons in the way markets behave.
During the Australian government debt default, how did the performance of equities versus bonds compare? It was a time when investing in bonds was more common than equities.
In some countries, stock markets have already surpassed their pre-GFC peaks. There are some surprising winners, and Australia lags despite our recent economic growth being the best in the developed world.
Simple maths helps explain why the share market is so volatile. It’s not that it’s an irrational, casino-like beast that bucks and dives for no good reason. It’s a long duration market reacting to changes.