Welcome Back to 2015.
I hope you all had a Good Christmas and Great New Years.
2014 ended with Terror in Sydney, 2015 begins with Terror in Paris with a series of attacks. More recently, the show of solidarity by the French people marching, a total of 3.5 million across France to show they will not be intimidated. The Markets do not seem to be effected by these attack as they were a decade ago.
Oil price continues to fall to prices not seen since 2009. OPEC has refused to reduce production to place pressure on the US producers whom need the oil price significantly higher to be able to be competitive.
The upside is the fuel cost has fallen as well, offset slightly by the fall in the Australian Dollar to 82 cents USD. In September 2014 I predicted that if the Australian Dollar dropped below the 85 cents USD, we will see a interest rate rise. I was wrong as recent economic figures is showing a slow in the Australian economy and the commentary around the economic forecasts for 2015. I will leave it open ended at this time as to when the next rates rise will be.
Reports have come out that the Australian Economy is slowing down and that unemployment is on the rise. As unfortunate as it sounds we have not had recession since 1990 so we have had an exceptional run for the past 24 years not seen any where else in the world. Does this mean run for the hills? No! It just means we need to look over what is to unfold. There may be a drop in the markets, even god for bid a drop in housing prices. The old saying of you have not lost money until you sell.
During the Global Financial Crisis for example CBA share price dropped from over $60 to under $30, now it is over $85. The key with any investment is to look at the quality of the asset not just the price. If you have bought quality its value will return over time. If 2015 is to be rough seas ahead then baton the hatches and ride it out. No point running for the life boats if the ship is still solid.
I hope you understand my meaning.
Have a good week.
Fawkes Financial Services