Archive

It is fair to say, there has been nowhere to hide in this recent correction. Commodities have been the exception, as has cash. Everything else is down, but global growth equities are really down.

One of the rationales for establishing a family office is to provide a strong & robust framework for investment policy. This in turn provides the proper support for the family to achieve its stated medium to long term wealth objectives.

The RBA may have lost its patience, but the Australian economy is not in the same place as the US. Interest rate normalisation will be much slower, longer, and lower than Mr. Market believes.

In our latest webinar, we were pleased to welcome our consulting economist Gerard Minack of Minack Advisors to discuss economic outlook in this time of War, Oil Shocks and Market Gyrations. We view the decade ahead to be characterised by a shift from deflation to inflation, globalisation to isolation, monetary to fiscal excess and a free-market approach to populist intervention, with implications across the key asset classes of bond, equities, and commercial property.

Against a backdrop of record low unemployment, high commodity prices, strong corporate profits and rising inflation concerns, the Government did not forecast a surplus, instead opting for a $78 billion (3.4% of GDP) deficit. This is the debt ‘floodgates’ fully open, the death-knell for fiscal restraint and the end of hope for surplus, in this decade at least. The obvious implication of this policy approach is that it leaves Australia with less policy flexibility for future crises.

As far as budgets go for households and families, this year’s Federal Budget looked like something straight out of the pre-Election playbook; unoffensive, reserved and lacking policy substance. However, it did reaffirm the Covid-19 induced shift in the way fiscal policy is being used to directly target individuals through the use of cash handouts. If you are a middle-income family with a couple of cars, you’ll be a Budget ‘winner’.

Recent budgets have focused on incentivising capital expenditure through tax breaks and innovation, themes which have been carried through to this year’s Federal Budget but with firm focus on skills and regional development. Whilst it might seem light on in terms of any real productivity reforms, there are incremental red tape cuts which will help business run more smoothly and the focus on skills will deliver dividends, but perhaps not immediately.

The rapid rise in new cases across the world through Omicron is a timely reminder that new variants and cases are likely to remain a risk to market.

A summary of investment performance for the year ending 31 December 2021.

Do fiscal & monetary policy conflicts in Australia result in higher interest rates? Border reopening suggests maybe not.

The events and trends over the last 25 years now potentially make way for a new cycle, specifically one where the previous trend returns will be replaced with volatility and the need for careful economic management. We outline below Cameron Harrison’s approach to Australian & Global equity strategy and how we are adapting to a significantly changed environment compared to the last 25 years.

We are expecting strong US economic growth through 2022, with commensurate earnings growth that will be sustained throughout the year.

We see a reasonable case based on current settings and economic outlook for the US, that 10-year bond rates elevate to 3% and perhaps 4%.

In the best scenario, COVID will be omnipresent for a long time and will be part of our lives, even after the vaccination rollout. So, what are the implications to the economy and investment strategy for investors?

The cyclical upturn, accompanying inflation and bond market fears a few months ago have evaporated over recent months. What waits after the lull?

Delivering over 12 months is great. Delivering over 25 years is truly unique.

With the Fed seeking a dual aim of full unemployment and inflation around 2%, the risk is of inflation overshoot, which the Fed states it can tolerate, but can it really manage it? We have some serious doubts. 

Paul Ashworth named as one of Australia’s Top 100 Financial Advisers for the third year running.

The Goldilocks economy was coined in the US during the mid-1960’s. It was used to describe the “not too hot, not too cold” economic environment of sustained economic growth with moderate inflationary expectations, which in turn supports friendly monetary policy and underpins market risk assets.

At Cameron Harrison, we are a team of investment managers who have been delivering asset allocation solutions to clients for over 25 years; a period spanning the early 1990’s recession, dot-com boom, GFC, COVID and now COVID recovery and its repercussions.

New superannuation contribution limits are coming. Taking advantage of the changes will enhance your retirement strategy.​

In the face of an enormous structural spending ‘black hole’, Victorians will foot the bill with new and increased taxes to hit property owners, tenants and developers. We view this as the lid lifting on Pandora’s Box – expect more taxes to come.

The danger is always in the assumptions. Will the vast, $4.5 trillion of household savings, get deployed into consumption demand or get directed elsewhere?

With an acceptance of higher government deficits in pursuit of economic growth and full employment, the 2021 Budget reinforces fiscal policy for a Hermit Kingdom.

As far as individuals and families are concerned, it was a straight-forward, uncontentious Budget that will please almost all through extended temporary tax cuts, superannuation tinkering and reduced household expenditure. The professionals who advise individuals and families are also applauding the (modest) simplification in what has become a burgeoning ‘patchwork’ of superannuation and tax policy over time.

The 2021 Budget was full of winners, including small and medium business. There is little ‘new news’ in this year’s announcements as most policies are extensions of 2020 measures but regardless, they will be welcomed by small business. The focus is on capital investment and jobs growth, with some more specific tax incentives for medical/biotech businesses and brewers/distillers.

Have the increased inflationary expectations altered our Asset Allocation Strategy?

From stay-at-home orders to online auctions, the pandemic has touched nearly all property sectors.

Should we as investors be worried about inflation and the flow-on effects to asset markets? The answer is both yes and no.

The return outlook for fixed government bonds is meagre or awful, but opportunities remain in asset backed and credit markets.

2021 will be a year of recovery and repair but will it be enough to satisfy the markets lofty expectations.

Cameron Harrison sees big valuation problems for certain sectors such as technology, but not a critical concern for equity markets through 2021.

2021 is shaping up to be year of recovery, but is your strategy up to the task?

The last 7 days has delivered a Democrat controlled Congress. In turn, fiscal stimulus supporting pro-cyclical growth will likely be more assured through 2021.

From toilet paper shortages to lobster gluts, 2020 will be a year that lives on sharply in everyone's memories but what holds for 2021… ​

Rotting lobster, stranded ships, and expensive wine. What is the impact of China’s trade tariffs?

Looking past China's tantrums, Australian equities should on balance perform well in 2021.

FAANGM Stocks are trading on dangerously high premium to the rest of the market, creating the risk of a painful snap-back for investors.

Careful not to play market 'hopscotch' looking through the rear vision mirror.

Over the last decade, China’s growth rate has halved from 10% to now an ‘official’ 5% per annum For the decade ahead, we forecast China growth halving yet again to between 2% to 3% per annum.

Unconstrained by an ideological need to balance the budget of the cycle, the Morrison Government has unleashed the Godzilla of all budget deficits, with FY2021 forecast to exceed $210 billion (11% of GDP). The blowout is a combination of a fall in government receipts (~$60 billion), the forward dating of tax cuts, and a dramatic increase in the level of government spending (~$166 billion), the bulk of which is going to the $102 billion JobKeeper program. The result is a Budget that has something for just about everyone, with almost no one losing out.

An uncomplicated (and largely as expected) Budget as far as individual taxpayers and investors are concerned, centred around a single big-ticket tax break which will deliver immediate relief to more than half of all Australians.

This year’s Budget is a budget for many businesses, just not big business. Most of the measures are targeted at businesses with less than $5 billion in revenue and are particularly focused at the small and medium business part of the economy. The key theme is investment in capital and investment in people, and whilst there are some good measures and incentives for business to invest in both capital and labour, there is little in this Budget to support those sectors more permanently impacted by COVID-19: travel, entertainment, accommodation and events.

Astuteness means we're masters of the downside risk. We don't believe everything that's written in the newspaper.

Peak performance is also about coming down the mountain well.

In a break from the market woes, economic gloom and industry scandals that dominate the financial press headlines, our Managing Partner, Paul Ashworth, has been profiled in a leading industry publication. Paul sat down (virtually) with the Professional Planner’s Nina Hendy recently to share his experience and thoughts on navigating a business, its people, and its clients’ wealth through a pandemic-induced recession.

Asset allocation strategy and its integration with client strategy outcomes is Cameron Harrison’s central activity and focus.

As mountain guides, we provide the ropes and routes, it’s your summit we protect.

We're in the business of mapping strategy, where the compass is never true north. It 's a journey where insights and experience are vital.

Investors looking for a long-term investment return should look beyond the FAANG’s (an acronym that refers to five leading US technology companies).

Excellence is uncommon. Achieving excellence is our purpose.

A bit like the Artful Dodger in Charles Dickens 'Oliver Twist', the Australian economy has dodged and weaved the technical definition of a recession (that is, two consecutive quarters of negative economic growth) for a record 29 consecutive years.

We navigate with analysis, combined with 50 years of balance of risks perspective. It ensures we see the woods from the trees.

We navigate with analysis, combined with 50 years of balance of risks perspective. It ensures we see the woods from the trees.

Suppression strategies lay at the core of today’s economic, commercial and financial futures with their implications extensive for the next 5 years and beyond.

Normally in world wars, we press labour to either fight or produce the armaments that the war effort will require. Resources are fully engaged. A war on a pandemic is the 'polar' opposite - we fight by 'hibernating' labour, production and services.

The next wave of fiscal stimulus has been unleashed, but will it be enough to build a proverbial bridge to the post COVID-19 promised land.

In a further escalation of the extraordinary policy responses by governments and central banks, the RBA and Government both unleashed further supports to transition businesses through the impacts of COVID-19.

The times require extreme prudence, but with an eye beyond the crisis.

Saudi’s throw a grenade into a bloodbath. In a worrying development for coronavirus-hit financial markets, oil markets are now in crisis.

Astuteness means we're master of the downside risk.  We don't believe everything that's written in the newspaper.  

The spread of coronavirus outside China has rattled equity markets, but what is the impact for the Australian economy?

Fast world, fast money - it's a recipe for some. We prefer compounding money. It's a better route map.

Today marks the final day of the United Kingdom’s official membership of the European Union (EU) and the beginning of a post-Brexit UK. So, what does the year ahead hold for a newly single UK?

As navigators we sniff the financial winds, avoiding the choppy swells.

Inflation hasn’t disappeared, it is well hidden behind a smokescreen of globalisation.

Lost in the euphoria of the recent Phase I trade deal between the United States and China is the underlying issue that initially led to the trade war; the rising geopolitical and economic power of China, and the corresponding waning influence (and appetite) of the United States. In this instalment of our five-part investment strategy guide preview, we outline why we believe that further conflict between the two nations is inevitable and why it could risk an unwinding of the economic benefits derived from 30 years of globalisation.

Peak performance is also about coming down the mountain well.

In a speech last night, the governor of the RBA (Philip Lowe) outlined the central banks Quantitative Easing (QE) playbook. This is the first time he has explicitly addressed the RBA’s preferred approach to QE, making it a historic speech for the future of monetary policy in Australia.

High indebtedness means that conventional monetary policy in Australia will not be enough to lift the country out of economic sludge and households will continue to endure a per capita income recession - we term it, a household cashflow recession.

You'd like to know that their road will be easier than yours.

With the sudden uplift in Brexit activity, we have put together a two-minute guide to the current position and the likely outcomes for Brexit.

The Reserve Bank of Australia (RBA) has lowered the cash rate to 0.75% pa. This is remarkable because only in December of last year the RBA stated that "the Australian economy is performing well" and the "outlook for the labour remains positive".

There are nascent signs of 'green shoots' emerging in the Australian domestic economy. The critical question is whether they can truly take hold and support meaningful, sustained economic growth.

Astuteness means we're masters of the downside risk.

The Reserve Bank of Australia (RBA) cut interest rates by 0.25% to 1.25% in June, ending a 33-month streak of inaction – the longest in RBA history.

Is the recent collapse in the share price of Company ABC a buying opportunity (noise), or symptomatic of underlying change in the company’s prospects (meaning)?

The past 12-months have marked a turning point for global equity markets, as they experienced the first retraction in Price-Earnings (PE) multiples since 2011.

Interest-Bearing Securities, or Bonds, provide a key source of income and portfolio ballast to any asset allocation, an importance that has been highlighted by the market turmoil of 2018.

The listed property (A-REIT) market as a whole experienced a difficult 2018 as the spectre of higher rates early in the year, contracted earnings multiples.

2018 has been a year of recalibration by market participants, after the goldilocks euphoria of 2017 – where all asset classes simultaneously rose.

Since the Global Financial Crisis, global banks have stepped back from lending to corporates as they adapt to the litany of regulatory changes and higher capital requirements.

At the end of a bull market, when the gains have been disproportionately shared between ‘winners’ and ‘losers’, it is not unusual for governments to seek to interfere in an otherwise effectively functioning market.

Quantitative easing and falling interest rates have been universally good for the holders of capital and investors. The reversal of this process is unlikely to be beneficial for investors and holds the potential to unwind the windfalls that investors have received through re-rating.

12-months ago global growth reached a post-recession peak as we experienced synchronised global growth across many different countries.

The Australian economy is expanding, with GDP of 3.4% and unemployment at 5.0%. This growth has supported the increased revenues of the ganders (Commonwealth and State Governments)... but what about the geese (households)?

After nearly a decade of increasingly easy monetary policy, characterised by steadily declining central bank interest rates and quantitative easing – the printing of money to buy long-term bonds with the intent of reducing long-term yields – the major central banks around the world have started to tighten monetary policy. 

Properly diversifying your investment pool not only means diversification at an asset class level but also diversifying individual exposures at the security level.

Retail sales for July were unchanged from June, going against hopes for a rise of 0.3%. Whilst only a monthly statistical read, it joins a number of poor monthly reads. This, combined with a fall of 0.6% in the ANZ Job Ads Survey in August, now indicates a headwind to further falls in the employment rate.

Facebook, Amazon, Apple, Netflix, Google are unquestionably (tech) powerhouses of our times. There is a lot to like about the FANG business strategies, but do their valuation and future business performance assumptions stack up?

As we approach the 10th anniversary of the current bull market, we take a look at current and historical market conditions to assess how much longer this bull market can last.

The recent equity market gyrations over the last 10 days heralds the end to Goldilocks equity volatility, of which the hallmark has been overly-benign volatility for the last five years.