Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

Invest in Sydney/Brisbane property markets, or for media/public speaking requests, email pete@allenwargent.com

Friday, 30 December 2011

Investing outlook for 2012

2011 review
2011 has been a rough ride for investors.
Before today, the Aussie stock market is down nearly 15%, though by 4pm it may finish the year slightly ‘less down’ than that.  In property, the prices in certain cities have taken a tumble too (Perth, Brisbane, Melbourne) by varying degrees.
What for 2012?
Shares
It’s impossible of course to know how the stock markets will fare over the next 12 minutes let alone 12 months.  That doesn’t stop a lot of pundits predicting though!
One possibility is that international debt fears cause the world to slip in to a double dip recession.
Alternatively the world may shrug off the pessimism and return to growth.
The most likely pattern seems to be the middle ground of moderate gains which are intermittently wiped back out by ‘shock’ bad news.  The whole debt crisis seems unlikely to slink away quietly.
Stock values
One interesting observation is that the Aussie ASX 200 market (XJO) is only hovering around 4,000 when its low point in February 2009 was above 3,000.
The Dow on the other hand is still valued at around 12,000 which a world away from where it was in the depths of the GFC.
A share market bull might suggest that there is value to be found in the Aussie market, with plenty of the blue chip stocks (such as BHP) trading at single figure price-earnings ratios.  The more bearish pessimists might say that is simply because it’s going to be another rough year ahead!
Property - Australia
As ever there are a lot of conflicting views about the state of the property market.  We’ll know more later today when RP Data releases its hedonic home value index for November which will show the impact of the first interest rate cut.
Despite the rate cuts buying activity seems to have remained steadfastly low.
The most likely outcome would seem to be either moderate gains or moderate value declines, but nothing too dramatic.
Property – UK
There doesn’t seem to be a whole lot happening in the UK property market either at the moment. 
Some more appealing lending products are filtering back in to the market from Barclays and other lenders and interest rates are still at all-time lows. 
There is a definite and growing housing shortage in certain urban areas (mainly southern England) but in spite of all this demand is still low.
Strategies for uncertain times
The dull outlook presents a problem for investors – how to put the money to work in uncertain times?
Yields on fixed interest investments are poor but growth investments present a risk of loss.
One option is to look for high-yield stocks that pay a great dividend.  There are plenty of these on sale at the moment though some of the dividends may not yet prove sustainable and the risk of capital loss in the short term remains.
My own strategy will just be to look at the long term and to continue accumulating by:
·         Continuing to contribute monthly to a UK index fund
·         Trading Aussie resources stocks
·         Adding 2 properties to my portfolio (one in NSW and one around London)
Nothing too exciting likely to happen in the short term - but over the long term adding to your ASSET column (as opposed to acquiring toys and liabilities on consumer credit or finance) in this manner will generate handsome wealth.
And my final prediction...most of these predictions will probably prove to be wrong.  Such is the nature of predictions!