September 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

September marked the first negative return of the year with all major share markets down between 1 and 6 per cent in the period. The woes of the Evergrande Group in China, Central Bank tapering and the continual temporary versus structural inflation debate are all key factors that pointed to a down month. Earlier in the month, the Long portfolio introduced a new manager, Barwon Global Listed Private Equity Fund. The inclusion of this fund is to provide an alternate offering accessing companies that may not otherwise be available to invest in on public markets (known as private equity) with the added ability to earn an ongoing revenue stream from the various financing options that form these private equity deals. This Fund uniquely exposes the portfolio to income earned from specialist asset managers that participate in the private equity space. Moving forward, the inflation debate is likely to continue for some time yet due to energy price spikes, supply bottlenecks and constraints in the initial reopening phase. We fully anticipate more volatility in the immediate short term. Rest assured, whilst these developments warrant caution, the Long portfolio is well spread to weather the noise.

Short Term Portfolio

September was a volatile month for money markets as inflation, the potential reversal of central bank liquidity injections, excessive Chinese property debt, and the inability of the US Government to resolve its budget issues all took centre stage. These concerns resulted in the Short SMA posting a negative return for the month. As demand grows in line with the strengthening global economy, wage levels recover, and supply chains continue to be disrupted, we suspect inflation pressures will keep building. While the tone of the RBA statements has been getting progressively more sombre about the potential impacts of the latest delta outbreak in Australia, they continue to maintain their view that impacts are likely to be temporary, indicating that their base case is for the local economy to bounce back to its pre-delta path by mid-2022. In light of this, the Short portfolio will continue to retain its diversified position across the capital structure mix of short and long duration credit investments with the expectation of the continuing income flow these investments generate.

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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