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 topic of rebalancing portfolios,
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take a look at the Baltic Dry Index,
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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 what to do with your $950 tax bonus payment,
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provide a link to Coffehouse Investor website,
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provide a link to Scott's latest Eureka Report article, and
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highlight the latest Monday's Money Minute Podcast.
Click on the following link to have a look at the full newsletter - Financial Fortnight That Was - 10th February 2009.
The market update section is set out below:
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 February 3rd the P/E ratio for the S&P/ASX 200 was 8.29. The dividend yield was 6.80%.
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 6th of February the index closed at a level of 43.37. This is significantly down from the 80.1 level it had reached at its peak and slightly down from the level reported 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 |
3.80% |
-6.78% |
-38.14% |
-10.96% |
-3.57% |
NA * |
|
International Shares |
|
|
|
|
|
|
|
MSCI World - Ex Australia |
5.00% |
-3.50% |
-33.51% |
-11.04% |
-1.75% |
-1.49% |
|
MSCI Emerging Markets |
8.93% |
1.39% |
-38.22% |
-4.17% |
7.53% |
10.78% |
|
Property |
|
|
|
|
|
|
|
S&P - ASX 200 REIT |
-12.18% |
-21.80% |
-60.19% |
-28.40% |
-17.49% |
NA * |
|
S&P/Citigroup Global REIT - Ex Australia - World - AUD |
-1.43% |
-8.59% |
-27.72% |
-13.57% |
0.00% |
6.17% |
|
Currency |
|
|
|
|
|
|
|
US Exchange Rate |
0.05% |
-5.87% |
-27.20% |
-4.40% |
-3.10% |
0.02% |
|
Trade Weighted Index |
0.37% |
-2.88% |
-21.81% |
-5.10% |
-3.40% |
-0.40% |
* - Data unavailable as ASX 200 only commenced on 31st March 2000
General News
Since publishing our previous edition the Board of the Reserve Bank of Australia has further reduced the Policy interest rate by 100 points to 3.25%. The RBA's latest quarterly statement on Monetary Policy can be found
here.
The Federal Government has also released plans for a further 42 billion of stimulus spending measures. These measures are currently being analysed and debated by the Senate.
The Australian Bureau of Statistics has released the latest Inflation (CPI) figures for the quarter up to the end of December 2008. the figures show a fall in prices of 0.3% over the quarter leaving the annual rate to the end of December at 3.7%.
Regards,
Scott Keefer
