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By Matthew Dell

Trust distribution landscape now more settled If you carry on your business affairs through a trust structure, there is now more clarity around the law on distributions following much uncertainty throughout the year. Neither the… Read More

Portfolio update 17 April 2023

By Matthew Dell

Market Update Since we last wrote to you in mid-March following the collapse of Silicone Valley Bank (SVB) and the takeover of Credit Suisse by UBS, global share markets proven quite resilient as concerns about… Read More


By Matthew Dell

New work from home record keeping requirements Are you one of the five million Australians who claim work from home deductions? If so, stricter record-keeping rules may now apply. For this financial year and moving… Read More

Portfolio update 7 March 2023

By Matthew Dell

Market Update The strong start to the calendar year for Australian and US markets fizzled somewhat in February as investors came to the realization that interest rates are likely to keep going up for longer… Read More


By Matthew Dell

Missed the Director ID Deadline? Have you missed the deadline to apply for a director identification number (director ID)? If so, you can still apply! The ATO says it will take a reasonable approach with… Read More

Portfolio update 25 January 2023

By Matthew Dell

Happy new year to you and your family. We wish you health and happiness in 2023. Equities and other Growth AssetsStrong recovery from the lows of September 2022 for most markets Global equities have rebounded… Read More

Portfolio update 16 December 2022

By Matthew Dell

As the end of the year fast approaches, we bring you our final portfolio update for 2022. Recap of 2022 It has been a tumultuous 12 months, commencing with Russia invading the Ukraine, and then… Read More

Portfolio Update 12 October 2022

By Matthew Dell

Global markets have remained volatile in recent months, with September having seen major share indices fall sharply, making new lows for the year before recovering slightly. The three major themes which have impacted markets throughout… Read More

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Global markets have remained volatile in recent months, with September having seen major share indices fall sharply, making new lows for the year before recovering slightly.

The three major themes which have impacted markets throughout 2022 continue to dominate market sentiment, namely:

What we are seeing is any economic news, particularly out of the United States, which impacts investor expectations on these three themes, is causing extreme movements in the US sharemarket (both up and down) which has a knock-on effect to Australia and other global markets.  Our view is that this volatility will likely continue for the remainder of the year, whilst interest rates are expected to keep increasing until the first half of next year before hopefully remaining steady for a period of time as their impact on inflation takes effect.
Equities – Year to Date
The chart below shows the performance of the S&P 500 index (broad US sharemarket- black line), the NASDAQ (US technology shares- orange line), ASX 200 (broad Australian sharemarket – blue line) and the MSCI All Countries World Index (broad global large & midcap stocks- red line) over the year to date:

Government Bonds – Year to Date
In addition, long duration fixed interest investments in both Australia (black line) and the US (orange line) have been hit hard over the year to date with rising interest rates having a negative effect on capital values, as follows:

Collins House Strategy
We are sometimes asked why we don’t sell out of investments in times like this, sit in cash and then buy back in when market conditions improve.
We don’t like to try and time the market- that is move from equities to cash and then back again – as history shows it is very difficult to get this right.  Two decisions need to be made- the first being when to sell out of equities and sit in cash and then the second when to get back in again.  With market volatility, it is really impossible to tell until after the event (and often well after the event) when the top or the bottom of the market is- hence what investors tend to do is wait until they have started experiencing significant falls before they sell and then wait until the market has confirmed it is recovering before they buy back in.  Being late in both selling and then buying can be catastrophic, as it can lead to investors locking in the bulk of the losses and then missing out on the bulk of the recovery (with history showing that the early weeks when the market recovers from lows often provide the biggest returns).  Our view is that investors who successfully time the market do so based more on luck than good management and don’t do it consistently.
We do, however, employ a “safety net” rule, where if extreme overnight falls occur, we will make significant short-term adjustments to the portfolios’ asset allocation where appropriate and generally move back into the market using a “dollar cost averaging” strategy, usually over 10 weeks.
But in general, we prefer to remain invested throughout, albeit by making tilts in the portfolio towards sectors that are more favoured by the economic conditions and away from those that aren’t.  The broad diversification by investing in Exchange Traded Funds also helps reduce the risk.  Whilst our model portfolios have suffered falls since the start of the year, the strategy we have implemented has seen portfolios avoid much heavier falls, such as those shown on the index charts above.
We encourage all investors to stick to their long term strategy with their portfolio given, as uncomfortable as it may be, sharemarket history is littered with periods like this and recoveries always follow. 
If you wish to review your portfolio in light of the above, please contact your Advisor.