This cycle will come to an end, just as those before it…

The Directors here at Hewisons have heard Dr Stammer speak on several occasions and have come to recognize him as an extremely insightful, level headed and experienced independent Economist.

Dr Stammer commenced his presentation by informing the audience that he had lived through, and remembered the last 6 recessions in Australia. Something no one else in the audience could attest to.

Dr Stammer shared with the audience a number of key investment principals, but one I thought stood out from the rest – Investing is not just a matter of “timing the market”, nor is it a matter of “time in the market”. It is in fact a matter of “both”.

Amongst his explanation was the key concept that investment markets (property as well as shares) run in cycles. They always have and always will. Just in the same way that Hewison Private Wealth advised our clients throughout the GFC that eventually the market would recover, the principal remains for this most recent recovery. It will not last forever.

My statement above does not mean we think that the Australian share market is expensive. We still believe there is value, but at some point our clients will be tapped on the shoulder and advised to reduce their exposure to certain companies they are deemed to be over exposed in, or fully priced. That is “timing the market”, better known as “re-balancing”.

We fully expect to be met with the same level of apprehension as was the case in March 2009 when clients were advised to ‘buy’. Making decisions against the market trend is an emotionally difficult decision to make. Our role is to remove the emotion from your investment decisions and remind you that, this cycle will not last forever…