Investing 101

Strong labour figures will reassure the Reserve Bank of Australia that the economy is match fit to weather further increases in the cash rate. As long as households remain employed, the likelihood of mortgage stress remains extremely low – even if rising debt payments inflation is reducing purchasing power.

For Australian investors, the value of fully franked dividends will play a bigger part in client portfolios as dividend payments return to pre-pandemic levels. But that all depends on whether Australia has a soft or hard landing.

Here are five lessons every investor can take away from FY22.

With the S&P/500 index down 21% per cent so far in 2022, investors are asking when will the market finally reach a bottom. There’s no definitive answer, but these three charts suggest there is further pain ahead.

The Reserve Bank of Australia (RBA) increased interest rates on Tuesday by another 50 basis points, bringing the cash rate to 1.35 per cent as it attempts to rein in soaring inflation.

As we say goodbye to a volatile financial year, most investors are glad it’s over and can’t wait to say hello to FY23. Markets will be hoping that this new financial year will bring about calmer trading conditions with fewer geopolitical tensions and no devastating pandemics.

This time last year, BWX Limited was a small-cap fundie favourite, growing a portfolio of skincare brands including Sukin, Nourished Life, Andalou Naturals, Flora & Fauna and Mineral Fusion. Today, it’s a pariah. Here are three lessons every investor can take away from the downfall of BWX.

The S&P/ASX 200 Index is considered to be one of the benchmark Australian indexes. Most will know what the index represents. However, the composition, such as sector and company weightings, may surprise even seasoned investors.

Young investors are seemingly undeterred by the equity market volatility, according to share trading app Pearler. Pearler claims that on average, eight out of ten trades by its young customers are on the buy-side, versus two trades on the sell-side.

By following a simple practice known as dollar-cost averaging to buy shares or managed funds, investors can build holdings in assets in a non-emotional and disciplined way. Moreover, it may make good sense when share markets are falling, although it doesn’t work as well when prices are rising, according to some experts.

Legendary investor Ray Dalio has warned against believing all will be well if central banks simply increase interest rates to get inflation under control.

Platform provider Praemium hosted their latest Key Market Drivers for 2022, focusing on inflation, interest rates, how to position a portfolio in these market conditions and what to tell your clients for your upcoming end-of-year client meetings.