We TALK with our clients
Date: Feb 2, 2018
The following is an excerpt from my email reply to a client where we were discussing a slight reduction in his Australian large cap equity exposure while introducing XXX, a new emerging markets investment for roughly 10%. This does NOT constitute advice and I would remind readers that they should always consult with an adviser before considering or placing ANY investment………..
“so (client) as you experienced, the Aussie market saw some very solid gains last year, 70% of which was bona fide growth based on good conditions and company results while roughly 30% was on the back of performance in the US. It’s this 30% that bothers me. Not to the point of distraction, but it’s there. Valuations are high both here and in the US but the US has more reason to be upbeat given uncle Don’s corporate tax cuts etc etc whereas our government remains largely impotent regarding fiscal innovation and change. The fact that Mal and Sco-Mo don’t have the “strength” in parliament to govern well together with the potential for an early election later this year, could disrupt things a little market wise. That’s one argument for a slight reduction in Aussie exposure.
The reason for introducing the XXX investment is that global recovery is still very much in play and with so much going on right now it’s difficult to pick who the winners will be come close of business 2018. This investment is very diversified and has exposure to all of the quality emerging markets I’ve identified so I’m confident that we can capture some growth here while reducing risk at home……………”
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