On the 31st May the ASX 200 Index closed at 5724 points.
On the 30th June the ASX 200 Index closed at 5721 points.
A whole month with no outcome was a welcome relief following the 3.3% hammering the market took the month previous. Before too many eyes turn to the seasonally strong month of July (up 4.4% & 6.3% in ’15 & ’16) it might be worth having a look at some of the better hits of a “June Swoon” we’ll soon forget.
Look closely at this photo for a good insight into British politics in its current state….
Whilst the Australian market traveled sideways our confused cousins in the UK found a new and innovative way to throw a spanner in our works. Theresa May managed to just snatch a loss out of the jaws of victory and all the best laid plans for the GBP have been filed (for now) under ‘B’ for ‘Basket Case’.
Fortunately the benefits of diversification on a trade idea shone through again with investments trading in London rallying following the decline in GBP. (Markets become “cheaper” to international funds when the local currency drops & stocks are usually bought.)
One stock we had a small amount of was Vodafone which rallied strongly on the above reason and also on the raising of its dividend to now be over 6% yield. We’re seeing more and more names outside Australia come across our screens showing strong dividend yields and with the ease in international investing we see no issue investing in “foreign yield” as an alternative to an exhausted Australian market. Receiving dividends in Euros or Pounds is quite good too.
To find out how we can help diversify overseas please follow this link
Sydney Airport showed real strength in June. I won’t use the pun “took off”
We had a win on one of our Protected Income Strategies last week with our investment in Sydney Airports being “called away” and clients collected an ~8%-12% profit on the trade held for seven months. Add to this the solid dividend received in December (add ~2%) and that is a very healthy trade at very little risk thanks to the put option protecting the downside. IAG is another of these strategies which is again showing strong performance at greatly reduced risk. To find out more please call or follow the link above.
Courtesy the excellent David Scutt & Business Insider Australia
The month ended with the release of the Census numbers showing something bizarrely interesting about our teetering housing market.
The article can be found here & references Kristina Clifton of the CBA with the numbers showing that on Census night 11.2% of dwellings were unoccupied and that of the dwellings built between 2012-2016, 17% have been left unoccupied. That’s over one million dwellings with no one living in them.
Please factor that into your views on the housing market in the short term.
So if you look out your window at the four nearest houses or units, statistically at least one will be empty. If all are occupied maybe it’s time for a visit to your doctor because the stats don’t look good!
All the best,
James Whelan & the VFS Investment Committee
Level 30 Australia Square, 264 George Street, Sydney NSW 2000
+1300 220 360 | www.vfsgroup.com.au
Changes to super are now in effect. Find out more from one of our best
Disclaimer:
This Communication has been prepared by Vertical Capital Markets Pty Ltd (ABN 11 147 186 114 AFS Licence No. 418418) trading as VFS Group (VFS Group).
This Communication is for general information purposes only. It does not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of the information contained in this report, you should consider whether the information is appropriate in light of your particular investment objectives, financial situation or particular needs. You may wish to consult an appropriately qualified professional to advise you. Derivatives can be highly leveraged, carry a high level of risk and are not suitable for all investors. Investors should only invest in such products if they have experience in derivatives and understand the associated risks.
VFS Group and/or entities and persons connected with it may have an interest in the securities the subject of the recommendations set out in this report. In addition, VFS Group and/or its agents will receive brokerage on any transaction involving the relevant securities or derivatives.
If you receive this Communication in error, please immediately delete it and all copies of it from your system, destroy any hard copies of it and notify the sender. If you are not the intended recipient, you must not disclose the information contained in this Communication in any way.
