|
||||
| Director's Year In Review |
|
Good morning Acofe Members, As we count down to the Christmas break-(yes there are only 11 weeks between us and the end of this calendar year), its time to reflect on what has become of the predictions and media’s hype that exploded onto the world stage over the late part of 2007 and then increasing through the first quarter of 2008. Is the recession over ? In a nutshell: --- not yet ! Way back in the midst of the negative hype that existed during what I like to call “The Sky is Falling” phase of the economic downturn, I think you would agree that it was difficult to see the light at the end of the tunnel. Or that in as little as 2 years we could expect the “worst recession in 100 years” the defining moment of the modern global economy, would be quoted by many media outlets as “almost over” and further, that we would be talking of the certainty of ongoing interest rate rises. Recession? What Recession?
There is more pain expected from increasing unemployment, in addition default rates on home loans have continued to climb and the full fall out of corporate failures is unlikely to have ended. WHAT HAVE WE LEARNT? Lesson number 1. This one never changes! Ignore what the popular media is reporting, don’t buy what they’re pedaling. It is usually miss quoted, factually cut to pieces, second and third hand and filtered to fit a headline or theme that may have been getting good publication sales or ratings last week. Lesson number 2 Back to basics. During these volatile times, it’s the basic strategies that work the best. From a break above an FLR to purchasing an investment grade residential property, those who acted early and continue to act with confidence, are amongst the best positioned to reap the benefits from being brave and ignoring the hysteria. Glancing back at the past 12 months by reviewing either a monthly chart of the All Ords or an RPdata sales report, tells us that hind site hasn’t lost its clarity. Acting counter to the popular discussion or debate paid great dividends for the brave.  Make strategic decisions rather than emotional ones. For the many Australians who watched their managed funds give back the previous five years worth of growth, acting on the signal offered by a trailing stop loss from a monthly chart of the relevant index, followed by an instruction to switch to cash within the fund, could have saved these folk, many millions of dollars. I know a number of our students took this simple approach and have weathered the dramatic impact of the market correction quite well. Others with full knowledge watched as their funds quickly slipped to revisit the unit prices of five years ago. And others still ,traded the pants off the correction, crash, slide, bear market call it what you like, and reported their best trading results in years Lesson number 3. Don’t fear the recession A recession is a time when prices and therefore opportunity are often wound back a few years. The growth experienced by many sectors of the economy is unsustainable and a small number of participants get a reality check. Prices, demand, profits, costs, interest rates, expectations, employment, overall sentiment all get reset to more reasonable levels. With a simple fearless strategy, these circumstances represent re-entries and undervalued asset accumulation opportunities for all. As for the economic clock which we spent some time on in various sessions this year, we are still in the strong buying quadrant of the cycle and with a number of the large economic power houses still yet to show clear and certain signs of recovery and growth, we would expect mixed signals for the immediate future. Moving forward into 2010, the commentary from most suggests interest rates are expected to rise from current emergency levels by at least 0.5 % over the next six months. Whilst this will see the end of the great cash relief- low rates extended to borrowers, it also signals the start of the return to profit opportunities from a number of sectors. Growing our membership base. At acofe this year we have been focused on delivering targeted courses and services to our existing student base with a number of associations being forged and developed with exciting and rewarding results to date. These include the strategic alliance with The National Solutions Group of Companies. This alliance brings an extremely effective accounting and property group to the benefit of acofe members. Keep an eye out for special educational events throughout 2010 from this alliance. It’s not too late to take advantage of these strong buying circumstances. I expect we’ll be in this quadrant for the better part of the next 24 months at least. Of course hind site will hold a red pen to this comment. Either way I have taken massive action and will continue to take an aggressive stance at this time, for my family and I …….will you? ACOFE referral program With these new services now ready to continue rolling out during the rest of 2009 and into 2010, acofe will now focus on growing our membership base. With this in mind, we will be launching a new referral program that will see us divert some of our marketing budget to our students to reward them for bringing a friend along to selected events. More on that soon. In the meantime if you would like to touch base with me to review your strategy for 2010 or explore property as an asset class, drop me an email or call the office to arrange an appointment. This e-mail address is being protected from spambots. You need JavaScript enabled to view it Warm Regards Dave Beveridge. Australian College Of Financial Education www.acofe.com.au |