Posted by Franz Huber on Jun 13, 2019
Last Wednesday, our resident Finance guru and Share Market specialist Charles Thomasson gave us a concise outline of what happened in shares and finance, now we know that ScoMo and his merry band of conservatives were returned to the treasury benches.  In a nutshell (as if you didn't know it): positive! Guess how much the Australian market has risen since the election on the mid May weekend? Various guesses from the audience ranged between 9 and 12%.  Well, not quite: it rose 2.7% in a bit over 3 weeks (of which the day before was 1.5%). [If that was extrapolated to a full year, this would translate to a whopping 40%...  Only dreaming! ☺ Ed.] Various factors would have contributed, including some of the key policies of the conservatives: tax refunds, instant write off of assets, no change to Franking Credits, Negative Gearing and Capital Gains Tax, just to name some.
So, what are the key stocks? Wouldn't we all want to know, but in Charles' view, Health Insurers, companies related to the housing market and consumer goods will benefit.  Not only from the "non-changes' named above, but the recent reduction in the base interest rate by the Reserve Bank. Will house prices fall further? "Prices seem to begin to bottom out but that doesn't mean that they will immediately rise again" Charles explained, "still, with current interest rates, it is again cheaper to have a mortgage than to rent.  But it's more than just rate cuts this time".  Charles elaborated on a couple of very interesting slides, outlining Australian corporate earnings and the PE ratios of the ASX 200 companies, as well as a table headed 'Tactical Asset Allocation June 2019'. [Sorry, they are not for publication - you should have been there yourself! However, you can download the Wilsons 'Straight Talk' report - click on this link. Ed.]
Charles Thomasson is a partner in Wilsons Advisory. Since financial consultation should be on an individual case by case basis, why not contact him directly?