- If we get a period of stability of leadership and policy the S&P/ASX 200 could be significantly higher by Christmas particularly if that stability coincides with certainty from the Fed on US interest rates and Chinese data improving.
- Most leading Australian industrial stocks are paying investors 6.00% fully franked to hold them. Shareholders are getting paid to take the equity risk in Australia.
- A historical review of previous US rate rising cycles reveals that after an initial period of volatility, which has seen the US equities down by 5% on average, the market has risen for the next 12 months following the increase on 75% of occasions.
Over many years I have consistently written that “confidence is a derivative of leadership”.
This week has seen Australia’s fifth Prime Minister installed in as many years and I have had many questions from my fund investors about what I thought the ramifications were.