The latest edition of our fortnightly email newsletter for 2009 has been sent to subscribers.
In this edition we:
- take stock of the current investment climate and discuss what should investors do now,
- look at the RP data - Rismark proerty indices,
- summarise the movements in markets since the last edition including 3, 5 and 10 year return history,
- take a look at the question of out of market risk,
- provide a link to Scott Francis' latest Eureka Report articles,
- provide a case study on what to do if your employer has not made your superannuation guarantee contributions,
- link to the Financial Planning Association's Good Advice website, and
- provide evidence of the three factor model in action.
Click on the following link to have a look at the full newsletter - Financial Fortnight That Was - 26th May 2009.
The market update section is set out below:
ASX P/E Ratio & 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 May 25th the P/E ratio for the S&P/ASX 200 was 9.82. The dividend yield was 5.98%.
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
The latest close for the index was at a level of 31.36. This is slightly higher than the recent low of 27.47 but well off the high of 80.74 from last year.
Market Indices
|
|
Since last ed. |
Since Start of 2009 |
1 Year |
3 Year |
5 Year |
10 Year |
|
Australian Shares |
|
|
|
|
|
|
|
S&P - ASX 200 |
0.69% |
1.06% |
-35.44% |
-9.24% |
2.07% |
NA * |
|
International Shares |
|
|
|
|
|
|
|
MSCI World - Ex Australia |
8.04% |
2.55% |
-33.70% |
-8.81% |
-0.21% |
-1.61% |
|
MSCI Emerging Markets |
15.59% |
27.72% |
-29.87% |
3.96% |
14.15% |
10.76% |
|
Property |
|
|
|
|
|
|
|
S&P - ASX 200 REIT |
-6.03% |
-26.08% |
-59.57% |
-29.69% |
-15.93% |
NA * |
|
S&P/Citigroup Global REIT - Ex Australia - World - AUD |
-0.73% |
-19.23% |
-36.68% |
-16.90% |
-2.59% |
4.08% |
|
Currency |
|
|
|
|
|
|
|
US Exchange Rate |
8.91% |
12.25% |
-19.36% |
1.18% |
2.13% |
1.61% |
|
Trade Weighted Index |
5.25% |
11.87% |
-14.90% |
-0.19% |
0.53% |
0.50% |
* - Data unavailable as ASX 200 only commenced on 31st March 2000
General News
The following major economic parameters have been announced since the previous edition:
- Unemployment now at 5.4% (predicted to rise to 8.5% in Federal budget)
- Annual CPI measured at 2.5% for the year ending 30th March (predicted to fall to 1.5% in Federal budget)
- RBA left official interest rates at 3.0% in the May board meeting.
We have also had the Federal Government budget delivered on May 12th. If you missed our email summarising the major personal finance impacts please take a look at the summary on our website - 2009 Personal Finance Budget Summary.
Regards,
Scott Keefer
