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 Financial Happenings Blog 
Thursday, February 26 2009
The latest edition of our fortnightly email newsletter for 2009 has been sent to subscribers.
 

In this edition we:

  • consider the 3 Factor Model,
  • take a look 11 surprising stock market indicators,
  • provide a summary of the movements in markets over the past fortnight including 3, 5 and 10 year return history,
  • look at why we should be careful about being pessimistic about Australian share dividends,
  • provide a link to Scott's latest Eureka Report article,
  • highlight the latest Monday's Money Minute Podcast,
  • discuss the Commonwealth Seniors Health Care, and
  • provide an update to the Dimensional Trust performance graphs - the 3 factor model in practice.

Click on the following link to have a look at the full newsletter - Financial Fortnight That Was - 25th 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 17th the P/E ratio for the S&P/ASX 200 was 8.98.  The dividend yield was 7.04%.


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 20th of February the index closed at a level of 49.30.  This is slightly higher than the 43.37 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

-1.94%

-8.59%

-38.10%

-11.06%

0.35%

NA *

International Shares

 

 

 

 

 

 

MSCI World - Ex Australia

-10.29%

-13.43%

-41.36%

-14.36%

-4.06%

-2.56%

MSCI Emerging Markets

-6.56%

-5.26%

-44.08%

-6.47%

5.47%

10.03%

Property

 

 

 

 

 

 

S&P - ASX 200 REIT

-6.58%

-26.94%

-63.29%

-29.67%

-15.28%

NA *

S&P/Citigroup Global REIT - Ex Australia - World - AUD

-11.70%

-19.29%

-35.23%

-17.84%

-2.11%

4.92%

Currency

 

 

 

 

 

 

US Exchange Rate

-1.95%

-7.71%

-30.15%

-4.81%

-4.11%

0.05%

Trade Weighted Index

0.00%

-2.88%

-23.43%

-4.95%

-3.93%

-0.36%

 * - Data unavailable as ASX 200 only commenced on 31st March 2000

 

General News
 
Since publishing our previous edition the Federal Parliament has approved plans for a further 42 billion of stimulus spending measures.
 
The Australian Bureau of Statistics has released the latest Employment figures up to the end of January 2009. The figures show a small rise in unemployment to 4.8% from 4.5% (seasonally sdjusted).  The increase in the data was mainly through an increase in participation rates as net employment levels increased.
Regards,
Scott Keefer
Posted by: Scott Keefer AT 05:00 pm   |  Permalink   |  Email
 
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