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
Global equity markets are navigating a complex landscape. Softer economic data in the US, inflationary trade policies in the short-term and the outlook for a resolution of the war in Ukraine.
Domestically, economic indicators are holding steady. We’re seeing inflation come back to target range and the RBA start to move on interest rate reductions. Earnings season was positive with only one in five companies missing earnings expectations. Despite this, the focus in February was on the global headlines creating a volatile market with little reward for those companies that outperformed expectations.
We expect Trump’s MAGA (Make America Great Again) program to continue to leave us with a volatile market to navigate. The Long Portfolio is presently weighted in part defensively and in equal part to growth balancing risk and reward.
Short Term Portfolio
February saw market uncertainty with US and Australian rate moves driving bond yields lower. The US Federal Reserve faced pressure from rising tariffs and economic concerns, leading to lower yields. Meanwhile, the Reserve Bank of Australia cut rates for the first time since November 2020, which helped support the bond market.
Despite these challenges, Forrest’s defensive portfolio remains well-positioned to provide stable returns in uncertain times. For February, the Short SMA Portfolio delivered a solid +0.58% return for the month. With ongoing global uncertainty and the potential for more rate cuts from the RBA we’ll continue to focus on capital preservation and stable returns. All eyes will be on the RBA’s April meeting to see whether a rate cut will be implemented before the federal election in May.
Micro Cap Portfolio
During the February reporting season those companies that surpassed earnings expectations and showed strong future earnings potential were not rewarded as generously as anticipated. The macroeconomic and geopolitical environment, reduced market confidence in staying committed to the winners, instead shifting to banking returns.
The positioning of the portfolio is to employ managers that continue to invest in long term, reasonably priced growth. Despite recent volatility, we see good opportunity for this style of investing as growth in larger companies plateaus and interest rates drop.
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.