Personality goes a long way

The 9 types

Here's why you need a personalised investment map (or click the image below).

Iron ore higher grades at multi-month highs

Iron ore surge

Overshadowed by other events, but iron ore is off to a flyer in 2020.

Higher grades are at multi-month highs, and rebar is off to the moon.

62% Fe spot prices are miles above the Budget assumptions.

Oodles of slack to be called on there. 

Meanwhile Australia formally edged out Qatar to become the world's largest exporter of LNG in 2019 at 77.5 million tonnes, according to the latest analysis by Energy Quest, thanks to Karratha, Gladstone, and Darwin LNG. 

Australian LNG shipments were up 11.4 per cent on 2018, largely thanks to operations from the Ichyths project, operated by INPEX in the Northern Territory. 

The benefits of diversification

Why diversify?

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Reversion to the mean

Mean reversion

Here's why trees don't grow to the sky (or click on the image below):

Sequence of returns

The problem with average returns

Here's what it is and why it matters (or click on the image below):

Stock of investor loans shrinks

Investor loans reduced

Although housing lending flows have recovered since the May election, the stock of investment loans fell again in  November to $643½ billion, according to APRA's latest statistics for ADIs. 

The stock of investment loans declined to 37 per cent of the total for housing lending of $1.74 trillion.

This accords with the Reserve Bank's housing credit growth figures, which showed investor credit growth hitting a 43-year low, including negative growth for investment loans lately.

There was a solid increase for owner-occupier loans of 0.51 per cent in the month of November 2019. 

Data revisions have rendered analysis of investment loans by lender somewhat meaningless, though it's clear that NAB's often high mortgage rates for investors have pushed away some business,.

Westpac, meanwhile, is also unwinding its position as the king of interest-only lending quite significantly, which is in turn reducing its total stock of loans. 

Westpac ($182 billion) and Commonwealth Bank ($156 billion) still retain the largest mortgage books overall.

NAB ($261 billion) is growing its lending to homebuyers, and will continue to do so in 2020 as the first homebuyer deposit scheme kicks into force.

Chastened ANZ ($247 billion), on the other hand, has been reducing its mortgage exposure of late, and now has a less substantial mortgage book than NAB. 

As ever there's then the customary huge drop down to the next tier of lenders, of which Macquarie Bank (ASX: MQG) has been growing fairly aggressively, notably picking up some of the slack in investor lending. 

Stall speed

As the new year gets underway economists will be looking for a sign - any sign - that the Reserve Bank's 'gentle turning point' is founded upon evidence instead of hope.

It’s mostly been a case of stories over statistics so far, though. 

Complicating the hopes for any such adjustment the Aussie dollar has swept higher from 67 cents to 70 cents against the US dollar, which the RBA's own econometric modelling suggests a further trimming of GDP growth. 

Commonwealth Bank released its manufacturing PMI figures for December, which missed forecasts in hitting a series low at a contractionary 49.2.

Still stuck in stall speed by any objective measure, with gathering risks to the downside...

Home values up 4pc in Q4

Post-election strength

Home values increased in the fourth quarter of 2019, with gains led by Sydney (+6.2 per cent), Melbourne (+6.1 per cent) and Brisbane (+2.4 per cent). 

This was offset by a decline in Darwin.

Source: CoreLogic

The quarterly gain was the fastest in the 10 years since late 2009.

Add this to a monster year of gains for Aussie and international stocks, and this has pushed per capita household wealth to record highs in 2019. 

CoreLogic's report can be downloaded here.

Time in the market, or timing the market?

Market timing

See here for the answer to this age-old debate (or click the image below):