Investment Update – September 2020

Entering a holding pattern, at least locally!

Australian Sharemarket

Much like the stay at home restrictions that we are starting to emerge from, the Australian Sharemarket has entered somewhat of a holding pattern. Since our End of Financial Year update (The Financial Year that was) the ASX200 index has been fluctuating above and below the 6,000 point mark for the last few months.

Whilst the index is yet to reach the lofty heights of late February when we saw all-time highs over 7,000 points, we are also a long way past the lows of mid-March where the index went below 4,600 points.

With restrictions now easing in Victoria and hopefully some opening of state borders in the coming months we are hopeful that life may return to a somewhat more normal routine. This should be good for businesses, employment and the overall economy which over time will be reflected in company shareprices and therefore the ASX200.

U.S. Sharemarket

In the U.S., the market continues to track well ahead of the Australian market. The S&P 500 index hit an all-time high of 3,580 points in early September before dropping back slightly to 3,400 today.

This U.S. rally has been largely off the back of what are collectively termed the FAANG stocks. Facebook, Amazon, Apple, Netflix and Google (now known as Alphabet) have all benefited from stay at home restrictions which have meant more time on Social Media (Facebook – who also own Instagram), more home shopping (Amazon) and more time on the internet, mobile phones and watching TV (Apple, Netflix and Google).

Looking Forward

Where markets go from here in the short-term is anyone’s guess (plenty of people try, most don’t succeed). However, over the longer term, the team at Muirfield are confident that a well diversified investment portfolio, taking into account your personal financial objectives will provide you with a return that is above that which you could get using bank and term deposits.

If you’d like to discuss your investment needs further, we encourage you to call out qualified financial planning team on (03) 5224 2700.