Future thinking should be shared. With that in mind our team publishes insights weekly to help keep you in the (k)now.


Hewison Private Wealth - Insights
Hewison Insights
Market volatility

Special Market Update – 14th January 2008

JTB Studios
Private Client Adviser
14 Jan 2008

Investors are understandably nervous about the current market volatility and decline in values.

This is led by the US market decline and fears of a US recession and the continuing sub-prime loan problems.

We are not surprised by the US recession issue and predicted problems in the US almost two years ago.

However, we also made the point that Australia is no longer influenced directly by the US economy as in the past as our major trading partners are China and Japan and the Asian region generally. For that reason, we see the current market decline in share values as a relatively short term issue.

In this environment it is worth reinforcing some fundamental truths:

·        The decline in share market values has no influence on dividend income levels. Therefore, your portfolio will continue to sustain its income with no impact on the value of asset holdings.

·        You are long term investors and your portfolio comprises quality assets that have the capacity to recover value very quickly.

·        When the market recovers – and it will – it will happen very quickly. History has repeatedly shown that investors who desert the market when it declines and miss the recovery are the real losers.

Most importantly, we have lived through these volatile periods many times before. Whilst we never take anything for granted, you may rest assured that we have reviewed your portfolio and are very comfortable with the assets that you hold, their ability to sustain income and their potential to recover value based on fundamental financial factors which always dictate the true market value of shares once the volatile “dust” has settled.

Download article Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.