November 2021

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

Equity markets declined in November with Omicron COVID-19 variant causing an equity sell off towards the latter part of the month. Contrary to markets the Long portfolio delivered a positive return of 1.18% with performance of our exposure to Global equity markets outweighing the drop in Domestic equities. Economic data shows that the domestic market has bounced back from lockdowns quicker than anticipated, however, we will watch the impact of the Omicron variant on our collective COVID-19 defences and how “living with COVID” starts to roll out in Australia with COVID cases already increasing in those states that have an open border policy. We anticipate this, along with the global inflationary outlook will continue to cause markets to behave in a volatile manner in the near term.

Short Term Portfolio

Despite the backdrop of increased volatility over November the Short SMA posted a positive 0.27% for the month. Yield volatility increased as the prospect of central bank tightening and concerns about the Omicron variant impacted rate markets. Early in November, the RBA abandoned its yield curve control policy while remaining firm on the timeline for interest rate increases. Futures markets continue to price in rate hikes ahead of RBA guidance. While valuation, technical and supply and demand indicators have moderated, the overall credit outlook remains positive. The conditions are challenging yet constructive with economic momentum remaining robust as shown in recent CPI and employment data. The Short SMA remains well positioned to benefit from further volatility and spread contraction and expansion.

Micro Cap Portfolio

In November our exposure to Global equity markets outperformed our exposure to Domestic equity markets. All of our positions in domestic equity markets were down with local equity markets selling off in the latter part of the month. The exposure across both Domestic equity markets and Global equity markets is designed to smooth out some of the volatility you would otherwise experience by investing in Microcap and Smallcap equities. Likewise, the exposure across six different managers is designed to ensure the highest upside capture whilst limiting the downside capture when markets don’t go our way. With the COVID Omicron variant threatening reopening globally and inflationary pressures moving from transitory to requiring policy to work through the volatility is here to stay 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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