|
•••Home | |
|
|
|
| •••Financial Planning | |
|
|
|
|
| •••CFS Advisor Team | |
|
|
|
|
| •••Market Update 13/05/09 ( | |
|
|
|
|
| •••Market Update 16/10/08 ( | |
|
|
|
|
| •••Market Update 8/10/08 ( | |
|
|
|
|
|
||
|
|
|
 |
|
|
|
||
|
||
|
|
|
 |
|
|
 |
|
|
Nigel Stevenson
Senior Financial Planner
CFS FINANCIAL PLANNING
Wednesday October 8th 2008
The Reserve Bank’s decisive 1% cut in official rate symbolises the priority it is placing on shielding the Australian’s fundamentally sound economy from deteriorating as a result of the global credit crisis. The Reserve Bank is concerned that our economy may slow to levels below what it has been expecting.
The Australian share market responded quickly and positively, ending in the green on October 7. However, at the time of writing this update, the bounce back appears short lived as stocks fall today.
Worldwide financial events over the past month are unprecedented and extraordinary. There is significant uncertainty surrounding the ability of the $US700 billion rescue package to generate the turn around required in the US. Similar questions are being asked about the rallying of the UK and European governments to bail out failing European banks.
Because of the extreme circumstances in global market, we expect volatility to continue for some time. In this current environment, it is best not to focus on daily events. A long term, patient approach is key.
Unlike the US and other European economies, Australia can feel reassured by the fact that there is still scope for the Reserve Bank to make further official interest rate cuts, and it is expected to do so. Australian Banks are also considered to be sound.
Some market segments may benefit from the cut rate however it may take 6 -12 months to flow through.
Q: Should I be selling to minimise the impact of negative performances?
A: Your investment has been set up according to your risk profile and is part of a plan to meet long term objectives. Selling assets now, could result in missing out gains later on
If the value of your assets has fallen, you have currently only made a loss on paper. If you sell your investments, you make the losses real and irreversible. If you hang on, a rise in prices could soon return the value of your investments without you doing anything.
Furthermore, trying to time your entry and exit into an investment is risky and doesn’t always pay off.
Q: Are there any cheap stocks and should I be buying now?
A: The are some stocks that are still performing well, and some stocks are considered to be good value.
Whether you’re in a position to buy at this time depends on your cash flow and risk profile. It is important to consider that you may need to endure further volatility and or decline in the market before you experience a profitable outcome.
If you are interested in making further investments at this time, please contact me to review your investment goals and strategy so that we can ensure decisions and selection of stocks are well considered.
Q: What is Court Financial Services doing in response to investment market performance?
A: In times like these, we realise that our customer rely on us for guidance and we take our responsibilities very seriously.
While we draw on our experience, research and knowledge to reassure our customers and form views, our approach to investing remains the same; thoroughly considered decisions and strategies are made based on individual needs, risk profiles, goals and long term plans.
Investments are made with a long term view and diversification always plays a key role. This helps to smooth returns over a long period and lesson the impact of sharp declines in the market.
As normal, we periodically re-balance portfolios, however we do not dip in and out of the market to make quick profits.
We are continually monitoring investment performances and aim to keep customers up to date.
We are here to answer questions, and talk through your individual options if you are particularly concerned or if your needs and investment risk profile have changed.
Conclusion:
Keep the long term timeframe of your financial plan top of mind. If your risk profile, objectives and investment time horizon has not changed, then there is probably no need to alter your strategy. If it has, please contact me to talk though your options.
Otherwise, look forward to the benefits of stronger market performance when it inevitably returns.
Note: Before making any investment decision, you should seek assistance from a Financial Advisor and consider whether the information is appropriate for your personal situation. Court Financial Services Pty Ltd is a Corporate Authorised Representative of Australian Finance Group Financial Planning Pty Ltd ABN: 74 099 029 526 AFSL: 247105
