Client Broadcast – March 2018

It has been a while since our last broadcast, and for that we apologise. Much has happened!


We are now at the stage of performing a regular major rebalance of all MDA accounts. These occur as you may recall bi-annually every February and August.

We are a little later with the current rebalance, and this is owing to the present market conditions.

Following our August re-balance last year, from October onwards the Australian market forged ahead with the ALL ORDs Index rising from around 5,720 points to 6,241 points at a peak in early January this year.

All good things must come to an end and they did so rather abruptly February 2nd with sharp fall from 6,230 to 5,930 points – a fall of around 5%. A strong recovery in the following weeks fell victim to another drop which leaves us where we are now sitting at around 6,050 points.

PFI’s response to these events has been to shift much of your equity exposed investments to Cash and/or Fixed Interest investments and to hold until we feel the time is right to perform a full re-balance.

At the time of writing, considering all things, our intuition is that there may be a further correction, and although the re-balance of accounts is imminent, we have never-the-less ‘kept our powder dry’ until a clearer view of the investment landscape has emerged.

We do tend to follow the USA market trends, particularly the strong ones, and in a recent article published by the Australian Fund Monitors, they describe the equity market as a “Goldilocks Market – not too hot and not too cold.”

They said

Even though there’s been some volatility over the past 3 weeks, the broader US market is less than 6% off its all-time highs, and is still much closer to its recent highs than lows. Volatility, which had been dragging along at less than 10% for much of last year, has doubled to around 18% after spiking to over 40% earlier in the month.(…)The US economy will continue to improve because the above “lows” are not going to reverse overnight even if they’re on the move upwards. Goldilocks is still happy!

… but caution is still needed.

The net effect of the current market has been to vindicate PFI’s decision to focus on ETFs as primary investments, and research, is indicating that this current re-balance should look to seek ASX listed investments focusing somewhat on overseas markets to improve performance over a solely Australian company-based market where performance-wise, returns have been stagnant.

More detail in our next bulletin…


If you haven’t visited or logged on to our website recently, now would be a great time to do it.

We have recently completed a major ‘revamp’ of the site to give it more than just a facelift.

The new site is easier to navigate and to interact with us. It will allow us in the near future to include additional features such as a topical bulletin board which will keep you more up-to-date with happenings at PFI, and other news and insights into the market and investments.

The client portal may look a little different however it still works the same as before.

Functional changes to a website sometimes have teething problems. We think we’ve got most of these sorted out but we’d encourage you to have a close look and let us know if you have any issues.

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