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 3 Factor Model,
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take a look 11 surprising stock market indicators,
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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 why we should be careful about being pessimistic about Australian share dividends,
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provide a link to Scott's latest Eureka Report article,
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highlight the latest Monday's Money Minute Podcast,
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discuss the Commonwealth Seniors Health Care, and
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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
