SMSF Investment StrategiesSharing Simple Strategies for Self Managed Super Funds
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Should we worry more about the US or Europe debt crisis?
The stock market volatility in the last two weeks has been mainly due to worries over debt defaults in the US and Europe. Last week our stock market followed the US market in falling over 10 percent in one week over worries about the US debt ceiling and the downgrade of their AAA rating by [...]
End of the road draws nigh for Greece
On May 10, 2010, the IMF/EU announced their “shock and awe” €750bn bailout package for Greece and other troubled European countries. This bailout was equivalent to allowing Greece to do a credit card “balance transfer” to a lender who was prepared to give them a special rate on existing debt. It did not solve Greece’s [...]
Outlook for 2011
I thought I would let a month pass before I give my thoughts on 2011. At the start of the year almost everyone was in consensus that it would be bullish year. I guess the main reasons for being bullish were the improving US GDP figures and increase in retail spending especially in the final [...]
Bullish 2011 unless Day of Reckoning comes
The market commentary is rife with predictions for 2011 and the consensus call is for a bullish double digit gain in the stock market. With over $900 billion of fiscal stimulus from tax cuts and over $600 billion in monetary stimulus from QE2, this looks like a logical call especially for the US market. We [...]
Three can get you two
“Debt will get you in trouble” is a strange admonition when it comes a guy who helps to lend $1 trillion of it. This was the opening line used by Bill Gross, Managing Director of PIMCO the world’s largest bond fund in his Investment Outlook for June 2010. In this issue, he talks about the [...]
Too interconnected to fail
The above is a beautiful graphic from The New York Times article Europe’s Web of Debt which demonstrates the European debt crisis very succinctly. As you can see European debt is highly interconnected. If one country defaults, many others in the European Union will be affected. The size of the circles and the width of [...]
Contagion has begun
Back in February 2010 when I wrote my first blog post about the Greek debt crisis, Australian financial advisers were assuring everyone that this crisis is self-contained and unlikely to spread through the global financial system. When the Greek crisis started, everyone assumed that Greece would get bailed out and that would be end of [...]
Slow motion train wreck picks up speed
The Greek debt crisis has been compared with a “slow motion train wreck”. Everyone can see that the fiscal spending in Greece is unsustainable and a fatal crash will result if action is not taken soon. You don’t need to be a financial expert to know that if you constantly spend more than you earn, [...]
Bank for International Settlement report does not bode well for world economy
I normally don’t write blog posts on the weekends but I feel I should get this post out sooner rather than later because some of the information may be time critical. Warning: this is long blog post with few pictures. A friend of mine recently asked me why I was still bearish about the stock [...]
Rising bond yields – any cause for concern?
On Monday 5 April 2010, the 10 year US treasury bond yields crossed 4% for the first time since June 2009 (see chart of $TNX below). Bulls believe this is a good sign. Bond yields typically rise and bond prices fall when the economy improves because investors will pull money out of safe, government-backed bonds [...]
