Quick Market Update

Transcript:
[0:00:01-0:01:19]
Hi everyone. I just wanted to touch base quickly on a couple of things that are happening in the Markets, there has been little bit of volatility at present and i know some of you might be concerned about that that, but before we touch on what is happening right now let's just reflect on what happened a year ago. We were right in the middle of Covid, we had just told it was an issue and the markets really responded negatively from the 21st of February to the 20th of March last year, the market was down 32.53% so obviously were a bit jittery this year around the 21st of February just worrying what might happen. The market was volatile with the last month the markets been down about 2% but more of the issue has actually been that because the economy, last year the economy was doing so poorly we thought we never were going to have growth again, we got record amounts of physical stimulus and interest rates went down to 0.1%. So unprecedented times and massive government action to get us through the Covid cliff that we went through. It worked, there was always some glitches in the system, but it works, and Australia has done a great job and it looks like globally we might get herd immunity by around midyear and what that means, is we get back to normal quicker

[0:01:19-0:02:38]
But what the markets have been concerned with is the fact that with the growth that we've had has been so extraordinary in the past six to eight months that they were worried the Federal Reserve and central banks everywhere would raise interest rates. The reason that they would raise interest rates would be because they would think that inflation is now a concern and so they would want to slow down the economy so what that means is, in the month of February, the fixed income which is really hard to understand how bond prices and bond yields work, but fixed-income went down 3.59% in a month which is one of the worst months its ever had and it is certainly an anomaly, so in all of our portfolios the fixed income component was actually worse than the share component in February. We don't expect that to be what will happen going forward but it was an anomaly so if you do look at your portfolio's and you’re wondering hang on why is it down, that's the reason why. So from our point of view, we then need to look at is inflation something that central banks globally are going to worry about, right now it isn’t in any statement that any Central Bank is making; in Australia it’s the Reserve Bank of Australia and their not worried about it, they need to get to a point that we are in inflation so 3-5 years from now that might be an issue but right now it isn't and so from our perspective the main focus is:

[0:02:38-0:03:38]
Let's stay the course, let’s make sure we have allocated your asset in an appropriate manner, reflective of the risk of we willing to take, and from there just make sure the that we stay on top of things so were looking at what happened in the recent reporting season, were talking to the fund managers constantly about their portfolios and what they're doing so, bear with us through these tough times but let's also reflect on how much better we are now than we were this time last year. We now have problems, but they are good problems but as always if you have any concerns please come and contact us. The idea of these videos that we are going to start doing is; as client concerns are coming up in review meetings, I then just want to shoot it out to all of you because it might be something that your all thinking about. Thank you everyone for your feedback as always, thank you for trusting us because I realize how hard it is when all the media wants to sell is doom and gloom but please be aware that we way that we always working as hard as we can to get you the best outcomes. Thank you very much, Bye.

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