Where to from here... are you a bull or a bear?
The 'Informer' is an Ark total Wealth initiative, developed to help individuals identify and understand the current opportunities that exist in investment markets. This initiative forms part of our commitment to provide innovative solutions and advice to clients, with the aim of creating, managing and protecting wealth.
This edition will focus on the ever-changing equities environment.
The past two years have been characterised by extreme market trends with the worst bear market in equities since the Great Depression, followed by the biggest recovery.1 The start of 2010 has greeted us with even more volatility and we have watched on with cautious optimism as interest rates increase domestically and more debt issues emerge from Greece and Dubai.
This rapidly changing investment environment has left us with the question... where do we go from here?
MLC Investment Strategist Brian Parker presented a very simple but concise outlook on the market in his February 2010 Market Watch. He spoke about the following;
Firstly, even though the worst of the Global Financial Crisis is over, the aftershocks are set to continue, and at least some of those shocks are going to be quite severe from time to time for financial markets. In short, not all the financial sins committed during the boom have been atoned for.
Secondly, It's still our expectation that we'll see a recovery in both business and consumer spending in the major world economies, and that a modest but sustainable economic recovery will result. However, as we've discussed previously, it will take some time for heavily indebted households in the US and elsewhere to get their balance sheets back in order.
Finally, our medium term estimates of returns still look reasonable, and if anything have probably increased as share prices have declined of late. However, the fact that our prospective return estimates look no better than reasonable at this point, speaks volumes about just how far and how fast markets rose during 2009.
This summary, is in line with the views of many leading economists in Australia and it has been played out over the past few weeks with extreme volatility in our sharemarket and Australian Dollar. The key theme however is that investors need to proceed with caution and do your due diligence when investing.
At Ark Total Wealth, we have combined several simple and innovative investment strategies that will help you invest in the market without over extending yourself.
Ark's investment philosophy allows individuals to invest in a recovering market with confidence. The aim is to ensure that any investment made during this period of unpredictability, will not be overexposed to any undue risk. Although there may be continued after shocks from the Global Financial Crisis, our strategy can help mitigate potential risks and put you in a position to benefit from any recovery upside.
Click here to find out more about this investment Philosophy.
1Blackrock Investment Review and Outlook - January 2010
2MLC Economic and Market Developments - February 2010 - MLC Investment Strategist Brian Parker