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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  -


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






NA *

International Shares







MSCI World - Ex Australia







MSCI Emerging Markets














S&P - ASX 200 REIT






NA *

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














US Exchange Rate







Trade Weighted Index







 * - 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.
Scott Keefer
Posted by: Scott Keefer AT 05:00 pm   |  Permalink   |  Email
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