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

In this edition we:

  • take stock of the current investment climate and discuss what should investors do now,
  • look at the RP data - Rismark proerty indices,
  • summarise the movements in markets since the last edition including 3, 5 and 10 year return history,
  • take a look at the question of out of market risk,
  • provide a link to Scott Francis' latest Eureka Report articles,
  • provide a case study on what to do if your employer has not made your superannuation guarantee contributions,
  • link to the Financial Planning Association's Good Advice website, and
  • provide evidence of the three factor model in action.

Click on the following link to have a look at the full newsletter - Financial Fortnight That Was - 26th May 2009.

 

The market update section is set out below:

 

ASX P/E Ratio & 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 May 25th the P/E ratio for the S&P/ASX 200 was 9.82.  The dividend yield was 5.98%.

 

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

 

The latest close for the index was at a level of 31.36.  This is slightly higher than the recent low of 27.47 but well off the high of  80.74 from last year.

 

Market Indices

 

 

Since last ed.

Since Start of 2009

1 Year

3 Year

5 Year

10 Year

Australian Shares

 

 

 

 

 

 

S&P - ASX 200

0.69%

1.06%

-35.44%

-9.24%

2.07%

NA *

International Shares

 

 

 

 

 

 

MSCI World - Ex Australia

8.04%

2.55%

-33.70%

-8.81%

-0.21%

-1.61%

MSCI Emerging Markets

15.59%

27.72%

-29.87%

3.96%

14.15%

10.76%

Property

 

 

 

 

 

 

S&P - ASX 200 REIT

-6.03%

-26.08%

-59.57%

-29.69%

-15.93%

NA *

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

-0.73%

-19.23%

-36.68%

-16.90%

-2.59%

4.08%

Currency

 

 

 

 

 

 

US Exchange Rate

8.91%

12.25%

-19.36%

1.18%

2.13%

1.61%

Trade Weighted Index

5.25%

11.87%

-14.90%

-0.19%

0.53%

0.50%

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

 

General News

 

The following major economic parameters have been announced since the previous edition:

  • Unemployment now at 5.4% (predicted to rise to 8.5% in Federal budget)
  • Annual CPI measured at 2.5% for the year ending 30th March (predicted to fall to 1.5% in Federal budget)
  • RBA left official interest rates at 3.0% in the May board meeting.

We have also had the Federal Government budget delivered on May 12th.  If you missed our email summarising the major personal finance impacts please take a look at the summary on our website - 2009 Personal Finance Budget Summary.

 

Regards,

Scott Keefer

Posted by: Scott Keefer AT 06:00 pm   |  Permalink   |  Email
 
Scott Francis' articles in the Eureka Report 
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