November 2023

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

What a difference a month makes! Renewed optimism and positive sentiment over the possibility of rate cuts occurring in the US sooner (first half of 2024), based on revised economic data, augured well for share markets in November.

After a challenging and highly volatile two-year period, we head into the Christmas period optimistic of further capital uplifts in what could quickly turn into a “risk on” rally for shares through 2024. As we mentioned last month, there are glaring valuation mismatches between various share market sectors, and a shift in sentiment, notably a view that interest rates have more than peaked, bodes well for rising multiples and, ultimately, more attractive returns.

Short Term Portfolio

In November, bond markets bounced back from their recent downturns due to subdued inflation in the US and Europe, along with encouraging economic data in Australia. This has fostered expectations that central banks will have room to implement interest rate cuts in 2024.

The combination of decreasing inflation, the potential for earlier-than-expected interest rate reductions, and a more optimistic outlook for economic growth is anticipated to provide support for various asset classes in the months ahead. Consequently, both equity and bond markets have witnessed a “Santa Rally.”

Micro Cap Portfolio

Contrary to previous months, we are now seeing our first glimmer of the use of the words “rate cut” by policy makers. This powered global equity markets in November.

Ironically when we talk about rate cuts being good news, it is because the economy has weakened. In the small and micro-cap space this does however lead to a positive revaluation of equities which would likely see investment flow into this sector.

With the biggest valuation gap in history between large caps and small / micro-caps, the headwinds of increasing interest rates and inflation now passing, we’re hoping for a strong 2024.

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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