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
December was a tough month for markets, with Australian shares falling over 3%, and smaller companies hit the hardest. Interest rate uncertainty weighed on local investments, but international markets held up better. That said, our Long SMA portfolio remained steady, which is a solid outcome given the broader volatility.
Looking ahead, 2025 is shaping up to be more positive. Inflation is slowing, and the economy is expected to keep growing—good news for investors, particularly for smaller, innovative companies that struggled last year. Liquidity (the availability of money in markets) should remain supportive for at least the first half of the year. While market noise will continue, the key drivers will be interest rates, inflation, and economic growth.
For now, conditions are stable, and we remain focused on quality investments and steady long-term growth.
Short Term Portfolio
December was a volatile month for markets, impacted by geopolitical events, including the lead into the second Trump Presidency, as well as mixed economic data. The US and European Central Banks cut rates again, alongside central banks in Switzerland, Canada, and Sweden. Australian bond yields remained stable, delivering positive returns relative to global bonds. Australian fixed income markets delivered mixed performance in 2024, influenced by shifting monetary policy and resilient economic conditions. The RBA maintained a cautious stance for most of the year, keeping rates at 4.35% before signalling potential cuts in the first half of 2025. Bond yields remained relatively stable, supported by easing inflation and a strong labour market. While global bonds faced headwinds from rising yields, Australian fixed income held up better, with moderate returns driven by local economic resilience and stable credit markets. Despite the volatile backdrop, the Short SMA returned 6.45% for the calendar year.
Micro Cap Portfolio
The macroeconomic environment and economic uncertainties have significantly influenced relative performance since the post COVID market peaks of 2022. Since this point large caps have outperformed small caps by over 27 per cent.
The level of economic uncertainty and political factors are now trending toward a more stable and normal state. With interest rates unwinding overseas and four out of four big banks predicting a drop in rates first quarter 2025, we’re expecting an unwind in the valuation gap between large cap and small cap stocks which will benefit the Micro portfolio.
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.