The latest edition of our fortnightly email newsletter for 2009 has been sent to subscribers.
In this edition we:
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consider the use of fixed interest investments in a portfolio,
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take a look at 2009 School Costs as a guide to planning for future education costs for your children,
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provide a summary of the movements in markets over the past fortnight including 3, 5 and 10 year return history,
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look at 10 tips on avoiding investment fraud,
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provide a link to some useful videos on You Tube,
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provide a link to Scott's latest Eureka Report article,
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welcome back the Monday's Money Minute Podcasts, and
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look at a case study involving the Pension Bonus Scheme.
If you would like to be added to the mailing list please click the following link to be taken to the sign up page - The Financial Fortnight That Was Sign Up Page.
The following is the market news section for the latest newsletter:
ASX P/E Ratio and Dividend Yields
The P/E ratio is a common broad indicator of the price of shares. It is a calculation of the price of shares compared to expected earnings. A higher ratio indicates that share prices are more expensive. The historical P/E ratio for the ASX has been between 14 & 15. The dividend yield is the calculation of dividend payments divided by the market capitalisation of the company or index. The historical average in Australia is around 4%.
As of January 20th the P/E ratio for the S&P/ASX 200 was 8.74. The dividend yield was 6.44%.
Volatility Index (VIX)
Another index we are keeping an eye on in the USA is the CBOE Volatility Index. This index purports to be a key measure of market expectations of near term volatility conveyed by the S&P 500 share index. The higher the level of index, the higher are expectations for volatility in the S&P 500 index. For more information on how the VIX is calculated please take a look at - www.cboe.com/micro/vix/introduction.aspx
As at the 23rd of January the index closed at a level of 47.27. This is significantly down from the 80.1 level it had reached at its peak but slightly up from the levelreported last fortnight.
Market Indices
This year I have tabulated the index results and included extra time frames for returns.
|
|
Since last ed. |
Since Start of 2009 |
1 Year |
3 Year |
5 Year |
10 Year |
|
Australian Shares |
|
|
|
|
|
|
|
S&P - ASX 200 |
-10.52% |
-10.20% |
-38.24% |
-11.44% |
0.05% |
NA * |
|
International Shares |
|
|
|
|
|
|
|
MSCI World - Ex Australia |
-8.24% |
-8.09% |
-35.60% |
-11.87% |
-2.85% |
-1.65% |
|
MSCI Emerging Markets |
-8.81% |
-6.92% |
-40.83% |
-5.83% |
5.31% |
10.36% |
|
Property |
|
|
|
|
|
|
|
S&P - ASX 200 REIT |
-15.03% |
-10.95% |
-52.66% |
-24.68% |
-12.14% |
NA * |
|
S&P/Citigroup Global REIT - Ex Australia - World - AUD |
-2.51% |
-7.26% |
-30.11% |
-12.37% |
1.32% |
5.79% |
|
Currency |
|
|
|
|
|
|
|
US Exchange Rate |
-7.81% |
-5.92% |
-24.54% |
-4.73% |
-3.46% |
0.19% |
|
Trade Weighted Index |
-5.94% |
-3.24% |
-19.58% |
-5.28% |
-3.80% |
-0.27% |
* - Data unavailable as ASX 200 only commenced on 31st March 2000
