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
June closed the financial year on a positive note. Much of the talk still surrounds interest rates and the ongoing challenge of inflation, which hit 4% p.a. in the June numbers, the highest level in 2024, reducing discussion of any imminent rate cut here. The Reserve Bank of Australia, while holding rates steady at 4.35%, has discussed potential rate hikes due to persistent inflation pressures. Much like households, companies are grappling with elevated energy and supply costs. The Long portfolio continues to invest in managers with concentrated exposures to quality businesses operating in growing markets, ensuring resilience in these dynamic conditions.
Short Term Portfolio
The 2024 financial year has been a volatile period for fixed income portfolios, both in Australia and globally. This has been driven by rising inflation, changing monetary policies, and fluctuating economic conditions. Amid this turbulent market backdrop, the Short SMA portfolio produced a solid return of 6.96%, demonstrating its resilience and effective management.
Where to Now for Interest Rates? Many economists believe that the RBA may not hike the cash rate beyond the current 4.35%, and some even predict the next move to be a rate cut. However, the RBA’s previous expressions of vigilance leave room for uncertainty. The upcoming RBA meeting will be crucial, as the decision will depend on whether the central bank sees the need to curb inflation further or if it considers the current rates sufficient to stabilize the economy.
As investment managers, we will continue to monitor these developments closely. The RBA’s decision will have significant implications for the markets, and we are prepared to adjust our strategies accordingly to safeguard and grow your investments.
Micro Cap Portfolio
In a year where the biggest impacts to markets were inflation and interest rates, June once again reacted both globally and locally to inflation data and the downstream impact to interest rates.
Global markets were mixed with the US market rising on hopes of a near term interest rate cut and weaker jobs data. Both the European Central Bank and Bank of Canada were the first major central banks to cut rates during the month. Locally, inflation rose to its highest level in 2024 to 4% pa, indicating the reduced likelihood of an imminent interest rate cut. The Reserve Bank of Australia held rates steady at 4.35% in June but announced that potential rate hikes were discussed as inflation remains stickier than previously anticipated.
The Micro portfolio delivered a solid gain across the 12 months ended 30 June of 14.51%. Given the mismatch of pricing still lingering between large and small cap companies, we believe the Micro portfolio should continue to perform well as inflation comes under control and the interest rates steady.
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.