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
As we start 2026, it’s a good time to reflect on the forces that shaped markets over the past year. Despite geopolitical tensions, stubborn inflation and slowing growth in parts of the global economy, markets proved more resilient than expected.
In Australia, the key development late in the year was a sharp sell-off in large cap equities. This began in late October alongside a widening gap between Australian and U.S. 10-year bond yields, which reset interest rate expectations. As a result, many leading growth stocks sold off heavily — even where earnings were strong, misses were minor, or there was no new news at all.
With reporting season approaching, the market’s focus will soon return to fundamentals. As a result, we anticipate a steady return to a market not shaped to external noise, but business performance.
Short Term Portfolio
The Short portfolio returned +0.21% in December, closing out the year with another steady result in a month where bond markets faced renewed pressure from rising yields.
December saw a more cautious tone across global fixed income markets. In the US, the Federal Reserve delivered a widely expected rate cut but signalled a more measured path ahead, keeping longer-dated bond yields elevated. In Australia, stronger-than-expected inflation data pushed bond yields higher and reinforced the RBA’s cautious stance, with markets further reducing expectations for near-term rate cuts.
Against this backdrop, the Short SMA continued to perform as intended. The portfolio’s focus on high-quality credit and diversified income sources helped offset market volatility, while its defensive structure limited sensitivity to rising interest rates.
As we enter the new year, uncertainty around inflation and central bank policy remains a key theme. In this environment, the Short SMA remains focused on its core objective: preserving capital, managing risk, and delivering reliable, defensive returns.
Micro Cap Report
2025 followed the lead set in 2024 with Small cap stocks performing well. In 2025 Small cap stocks significantly outperformed large caps – the first time in many years. The Micro portfolio delivered 17% return in 2025.
Whist the 2025 calendar year was very positive, the last quarter of the year did not deliver. The risk appetite changed and we saw investors banking returns and hibernating over the holiday period. Whilst we expect the 2026 calendar year to start slow, February generally sees markets move back towards valuing on fundamentals which is generally where we see our managers shine.
We believe the portfolio is well positioned to benefit from a positive reporting season.
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.