Greetings,
Further to my email around market commentary, as sent on 12/3, around the volatility created, largely by Trump’s Trade policies, we have seen over the last few days and in particular overnight a sharp decrease of around 5.5% in capital values.
This is based on fears of a full blown trade war and is a building on the market falls recorded last week immediately after Donald Trump announced the details of his “liberation day” tariff plan.
The sell-off follows a sharp fall on Wall Street on Friday, exacerbated by China’s retaliatory tariffs to Donald Trump’s new trade regime.
The market views Australia’s economy as being closely tied to China through our significant trading relationship.
Also of note is that the Australian dollar fell sharply this morning, to trade below 60 US cents, down from about 64 US cents mid-last week, more as a consequence of the aforementioned sentiment.
May I be quite blunt in what I say here, as a means of settling the nerves and trepidation you may be feeling in that I have built your portfolios for times such as now…
One major point I would like to make is that the market has only retraced to levels of late 2023, some 15 months ago. We have had a substantial period of growth in our investments and despite the current position we are still tracking at close to double digit returns over the last 3 years as an average per year.
Be assured also, that the decreased capital values of the share markets are not a reflection of the overall performance of your portfolios, given that we are well diversified, not just within share markets, but also across the other major assets classes being property, cash and fixed interest
Please block out the noise of how this is being reported – as I have always maintained, every style of media reporting is based on the premise of fear and greed….
Whilst I do not like to belittle our emotions by saying that I am not overly concerned, this is reflective of my long term thinking and methodology, and as you well know that is the overriding and governing approach I take.
For those of you in pension phase, remember we have strong strategies in place (3-tier strategy) whereby we will not selldown any growth assets unless it is the appropriate time and hence avoid crystalising such a position if it is an inappropriate time.
If in accumulation phase we have time for markets to regain their values – however please always remember – we have had a prolonged period of stellar returns and only 2 months of negativity.
At such times there is also large opportunity and if sitting on cash this may well prove a time to take advantage of decreased capital values for the long term benefit.
These are nerve racking times, socially, employment-wise, politically and also from an investment perspective, and I want to reiterate that I have your back, and constantly analysing where we are all at, from a protection perspective and also from an opportunistic perspective.
As always, if you need to touch base please do not hesitate to contact me via phone or email.
Your Financial Adviser
Andrew