At Forrest Private Wealth, our investment philosophy underpins our financial planning advice, which ensures our client’s wealth benefits from long-term exposure to equity markets. We believe holding a well-diversified portfolio of predominantly dividend-paying businesses over a long-term period is essential in financial planning for wealth accumulation and, ultimately, retirement planning.
By following our retirement planning process, a Forrest Private Wealth financial planner stays true to their investment advice, ignoring the noise and pressures of the market to provide their clients with a stress-free retirement. At Forrest Private Wealth, our financial planners capitalise on an investment philosophy that provides predictable income streams from equity markets, setting clients up for their desired retirement.
Long Term Portfolio
The long portfolio was supported by a mix of solid earnings reports. Locally, around half of the companies reporting met or exceeded earnings expectations, helping to offset some of the challenges in the market. Globally, markets showed some resilience, with certain sectors performing well despite concerns about rising bond rates and slower economic growth, particularly in the US tech sector.
Overall, the portfolio continues to benefit from a concentrated exposure to strong, reliable companies that hold steady during the market’s ups and downs. Looking ahead, the market outlook is still uncertain with inflation and central bank decisions playing a big role. Sticking with companies that have solid foundations should help maintain future performance.
Short Term Portfolio
In August, the bond market showed strong performance as investors turned to safer assets amid economic uncertainty and escalating geopolitical tensions. In Australia, inflation hit 3.5% in July, slightly easing from June, thanks in part to government energy rebates. The RBA maintained the cash rate at 4.35%. If inflation continues to decline, we could see rate cuts as early as 2025, which has already contributed to a decrease in Australian bond yields.
Globally, geopolitical issues have introduced additional pressures to the markets, resulting in short-term volatility. However, in the US, following the Federal Reserve’s decision to cut interest rates for the first time in four years in mid-September 2024, market conditions improved by the end of the month. This move is a positive sign for both bond and equity markets. Despite these challenges, the long-term outlook remains optimistic as inflation eases and central banks gear up to support economic growth.
Micro Cap Portfolio
August is a month usually dominated by fundamentals as it is reporting season. However, with inflation and interest rates still in the headlines, it was a mixed month for equities. During August, outcomes were generally better than expected with technology and consumer discretionary the better performing sectors. Global commodity prices also helped the resource sector, however China’s softer economic was a detractor for the sector.
With inflation slowly returning to target levels and central banks globally reducing interest rates, it’s only a matter of time before Australia follows suit. Global small caps have, and continue to, benefit from this macro tailwind and we expect the domestic market to follow suit. The portfolio is well positioned to benefit from a lower inflation and reducing interest rate environment.
Forrest Private Wealth’s discipline in providing financial planning, retirement planning, and wealth management services to its clients allows our clients to benefit from years of experience providing financial advice through major impacts to equity markets where staying the course has helped them.
Forrest Private Wealth has a dedicated team of financial planners and support staff providing clients with peace of mind in working towards and achieving their life goals.