August 2022

August 2022

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

Persistent after-effects of COVID-19, supply chain issues, labour shortages, rising interest rates, and geopolitical tension overlaid with more hawkish comments from the US Federal Reserve at the annual Jackson Hole symposium saw markets struggle through August. In an environment like this, where the fear factor is high, share prices will continue to be volatile. While many grey clouds surround investment markets, it is important to remember that much of this downside is priced in, and in some cases, oversold. Such fear provides an excellent environment for our underlying managers and us to top up on existing favorites or add new businesses that have now met their valuation criteria.


Short Term Portfolio

The main overriding feature driving investment markets is inflation and interest rates. Predicting what will happen next is difficult at the best of times. What is certain, though, is that volatility will remain a constant companion as central banks worldwide continue to commit to slowing inflation. With recent jockeying between inflationary pressures and recessionary fears, portfolio adjustments have been made to diversify these risks further in the event of a broader economic downturn and recessionary conditions worsening.


Micro Cap Portfolio

Reporting season is usually a chance for small and micro cap investors to take centre stage where undervalued equities generally move to a valuation based on fundamentals pivoting away from the macro sentiment. The timing and hawkish commentary delivered by the US Federal Reserve Chairman at the August Jackson Hole meeting completely turned this fundamental approach on its head and shifted the focus back to a macro view of the economy. During the speech the US Federal Reserve Chairman signalled intentions to continue tightening until inflation is returned to target which had a significantly negative impact on markets.

Looking through the macro and focussing on results, domestically these generally came in better than expected with a 3:2 ratio of companies beating forecast to missing (according to UBS data). Whilst this presents a healthy view of the companies we invest in, markets are now focussed on the impact of inflation and rising interest rates to these companies.

Continuing to invest in companies that have strong balance sheets, generate strong cash flows and are positioned to continue to grow is important in this market. The investment managers we work with in this portfolio have a proven track record of investing in companies with this fundamental focus.


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.


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