January 2022

By Forrest Private Wealth

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

A turbulent start to January saw markets across the world post their largest drops since March 2020 when the realities of COVID-19 set in. The Long account was not immune to the drop and closed down in January. Omicron and its impact on supply chains and economies, inflation and interest rate concerns all formed part of the January narrative. Whilst this narrative will continue for some time, recent geopolitical concerns are adding spice to an otherwise volatile environment. Challenges present opportunities and we remain confident that high quality businesses will continue to outperform through the various cycles that are presented. Where opportunities present, we will look to top up on quality assets during this cycle.

Short Term Portfolio

January was a challenging start of the year for investors. There were not many investments that offered shelter from the volatility as inflation numbers soared and the US Fed indicated rates would start rising earlier than expected. Equities and government bond markets sold-off in tandem and were positively correlated. Companies are likely to be facing short-term supply chain issues, tight labour markets and lingering pandemic interruptions which is likely to cause ongoing volatility in both equity and bond markets. COVID does appear to be in retreat and the world is beginning to reopen. Economic fundamentals are already strong with unemployment low, wages increasing, and prices creating the perfect backdrop for coordinated central bank hikes for the rest of the year across developed markets. Growing tensions in Eastern Europe will continue to drive a volatile market, however in these conditions there is generally a flight to quality investments such as government bonds.

Micro Cap Portfolio

We continue to support managers who seek to invest in high quality companies that they believe have solid growth prospects over the foreseeable future. Despite the inevitable ups and downs of the market in the short term, we believe the portfolio’s investments are all incrementally building value which should ultimately underpin returns over the long term. The portfolio remains diversified across domestic, global, sector and risk-return drivers. We believe the portfolio is currently well set up for attractive returns over the long term, regardless of whatever the market throws up in the short term.

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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