November 2019 Newsletter

by | Nov 3, 2019

The monthly performance of our 5 portfolios ranged from a gain of 0.12% to a loss of 0.41% for the month of October. This result was in keeping with the performance of global equity markets which remained generally flat for the month. The macro background was dominated by the trade negotiations between China and the US where reports of progress or lack of dominated the news. Elsewhere economic indicators remained weak, central banks maintained their easing bias and bond yields in turn remained soft.

In Australia, the ASX 200 Accumulation Index fell 0.4%, with the banking sector being the main drag on the local market.

In Australia the Reserve Bank followed the lead of overseas central banks by cutting interest rates at the beginning of October to a record low of 0.75%. This was the third cut this year and whilst borrowers would be pleased, those with money in savings are continuing to suffer.

With the inflation rate in Australia currently at 1.6% many savers are now facing the reality of negative real returns which explains the move up the risk curve as many look for better returns than bank deposits.

With interest rates likely to remain at or around current low levels for the foreseeable future, we continue to believe that investing in a diversified basket of low fee, passive ETFs via one of our Five Model Portfolios, provides a smarter way to grow your wealth over the longer term.  As always it’s important not to get too caught up in the daily movements of the market but focus instead on a longer term strategy.

Find out how Collins House Online can help you grow your portfolio with our simple to use, low-cost investment platform.