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
Higher prices for food, fuel, electricity and gas, global interest rate tightening and continued geopolitical concerns pushed share markets lower in the month of June. So where to after a torrid end to the financial year? By now it should come as no surprise that we cannot control share prices or share markets. When invested in share markets, it pays to be just that, invested.
For retirees living off distributions, you can afford the ups and downs of share prices. For retirees drawing down on capital, having sufficient funds that provide for short to medium term capital needs, reduces the risk of accessing funds at the wrong time.
For accumulators contributing and reinvesting distributions, the ups and downs of share prices provides both a healthy value in good times and an opportunity to buy lower in lean times.
Timeframe, diversity and volatility continue to be an investors best friend with the Long portfolio. These three important factors should always be kept in mind when viewing your investments.
Short Term Portfolio
June 2022, like May, was another month of two halves. In the first half, share prices rose and bond prices fell (ie yields rose) on hopes of continued economic growth, albeit with inflation.
In the second half of June, the opposite happened, share prices fell and bond prices rose (ie yields fell) as investors started to worry more that increasingly aggressive rate hikes would trigger economic recessions. The turning point was the US Fed’s 3rd rate hike on 15 June, raising US rates by 0.75%, following hikes of 0.25% in March and 0.50% in May.
Slowdown fears in the second half of June also brought down prices of oil, gas, coal, industrial metals like copper and iron ore, and the Australian dollar. Fears of rising rates and the likelihood of persistent inflation and/or slowdowns has continued to result in very tough market conditions for most investment asset classes. Only time will tell whether central banks have done enough to bring down inflation without triggering recessions. The soft landing so often discussed.
Micro Cap Portfolio
Markets have continued to be volatile as focuses are beginning to shift from increased inflation to growing fears of a recession. That has led to a drop in asset values globally.
In June the US Federal Reserve raised interest rates by a further 75 basis points, increasing the US cash rate to 1.50-1.75 per cent, and look to continue to raise rates in July.
Domestically, after a 50 basis point rise, the Reserve Bank of Australia persisted to raise the cash rate a further 50 basis points to 1.35 per cent on 5 July with the expectation of more rate rises to follow.
As a result, markets have performed poorly with the increased fear of recession and commodity prices not reaching expectations.
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.