It is the start of a new year, a time to review your portfolio to ensure it is best placed to achieve returns for 2025 year. The 2025 year will be a tricky year to negotiate so this coming year we will need to be flexible as conditions change.
We expect that the 2025 year will be unpredictable given the return of Trump, interest rates levels, Australian election. The ASX return in 2024 was 7.5%. We have a housing shortage, increasing migrations and government debt at a level never seen before. There will be a lot of noise around supposedly important events. It is important to stay focused on opportunities.
In tough times everything seems bad. In fact as humans we are hard wired to avoid pain, it has kept us alive. When it comes to investing, we all like to see steady returns over the long term.
In these times it is important to continue to look for opportunities in your risk profile, block out the noise created by media and continue to process opportunities as you would in good times.
I expect that we will see an increase in solid long term opportunities. It is important that bad news does not affect our investment process.
Current Market
With the market hitting a new highpoint of in December 2024 at 8700 points expectations are that volatility will increase over the coming year. Over the past 25 years in the industry, I have had to negotiate volatile markets. I expect that the market will move lower in the first half of the year before it starts to recover back to the current levels towards the end of the year.
Work the system
We will stay away from small speculative companies trading at ridiculous prices and no earnings when the speculative fever takes hold. This is a sign that the bull market is on it last legs.
How long this will go on is anyone guess; in these markets you need to continue to play the long game. Buy good companies at good prices and take profits when the stocks get too expensive. You do not need to have any predictive skills, just work the system.
The increase in volatility will provide more opportunities to take profit or purchase undervalued investments. We would focus on the blue-chip companies as any slip from the forecast will provide opportunity.
Time to be active
Sitting and holding in the coming markets will be negative for your investments. It is important that you know when the price of a company is cheap and when it is overvalued. It is a time to take profits and buy undervalued companies at a discounted price.
Your adviser it critical in these markets as there is a lot of data at hand which will allow them to be able to provide recommendations quickly.
GYW SMA – Clients
For clients who have investments in the Grow Your Wealth SMA models, we will do the heavy lifting for you inside of the models. Our advisers are always available if you have any questions.
If you have any questions, please contact our office.
Grow Your Wealth Pty Ltd
AFSL 403509
51 Thuringowa Drive
Kirwan QLD 4817
Phone: (07) 4771 4577 Email: [email protected]
Jason Fittler: [email protected] Jane Fittler: [email protected]
