Latest News from Newealth

What a difference a decade makes

• Posted by Dejan Pekic BCom DipFP CFP GAICD

Vanguard have published their Index Chart for asset class returns to 30 June 2025.

For comparison we reviewed the asset class returns to 30 June 2015.

A decade ago it was Australian listed companies that delivered the best 30 year performance number but now it is US listed companies who have delivered the best performance number over 30 years.

More interestingly is the 10 year growth asset return numbers which delivered 6% to 7% per annum to 30 June 2015 while for the 10 years to 30 June 2025 growth assets returns are 8% to 15% per annum.

This has been a material increase in growth asset returns and the reason must lie with the combination of low interest rates and proliferation of software/AI focused businesses.

Click for charts.

Will it continue, sadly no.

Expect an asset price correction or crash, this is guaranteed to happen which is why remaining invested according to our appetite for volatility is most important and when (not if) fear and panic next take hold, react by buying more quality assets at discounted prices.

Our business is based on referrals, so if you have family, friends or colleagues that want advice please ask them to contact us.

Friday Tidbit

• Posted by Dejan Pekic BCom DipFP CFP GAICD

We thought we would share some good macroeconomic numbers.

• Amazingly, Australia remains as the 11th global powerhouse in terms of GDP (Gross Domestic Product).
• Globally, the probability of a recession remains low with United States only at 35% likelihood.
• Globally, unemployment remains largely under control with only Spain and France on the high side.
• Australia’s PMI (Purchasing Managers Index) number is in the top right hand corner which is expansionary.

Click for charts.

Does this mean that it is all sunshine and lollypops for asset prices?

Absolutely not!

Trump is in power and Wars are still raging so we wait patiently.

Benjamin Graham’s Value Investing Principles teach us to remain invested according to our appetite for volatility and when fear and panic next take hold, react by buying more quality assets at discounted prices.

Our business is based on referrals, so if you have family, friends or colleagues that want advice please ask them to contact us.

Friday Tidbit

• Posted by Dejan Pekic BCom DipFP CFP GAICD

This forecast from The Yale Budget Lab is just further confirmation that increasing tariffs increases the cost of goods both in the short term and long term.

Increasing the cost of goods is not beneficial for the US economy because US consumers will pay more (and in most cases materially more) for the same imported goods which then slows economic growth.

Tariffs are just bad news.

Click for chart.

Our business is based on referrals, so if you have family, friends or colleagues that want advice please ask them to contact us.

RBA Cash Rate

• Posted by Dejan Pekic BCom DipFP CFP GAICD

It was literally inconceivable to forecast when we started this business that the RBA Cash Rate would fall from 12.00% in February 1991 to 0.10% in November 2020.

Click for chart.

The RBA reducing the Cash Rate by 0.25% today which is good news for almost every financial asset price because a reduction in cost increases profit.

However, lowering interest costs also has the negative effect of fanning asset price bubbles like for example, residential property in major population centres of Sydney and Melbourne.

If you are a student of Value Investing Principles as taught by Benjamin Graham then you would know that current residential property prices make no sense relative to the rental income that they produce.

The key question right now that is being asked by the market is how low will interest rates fall in this rate cutting cycle?

Our business is based on referrals, so if you have family, friends or colleagues that want advice please ask them to contact us.

The Buffett Indicator

• Posted by Dejan Pekic BCom DipFP CFP GAICD

We are most likely at a turning point.

The Buffett Indicator is a measure of the total value of all publicly listed companies in a country divided by a country’s Gross Domestic Product (GDP) to provide an indicator of whether publicly listed companies are overvalued or undervalued.

A value over 100% is a sign of being overvalued while well under 100 in undervalued.

The current US Listed Companies Market Cap to GDP Ratio is 203% as at 30 June 2025 which means it is stretched higher than previous asset price crashes.

Click for chart.

Question. Do you speculate and make changes prior to some unknown as yet future financial markets catastrophe?

No, absolutely not.

Benjamin Graham’s Value Investing Principles teach us to remain invested according to our appetite for volatility and when fear and panic next take hold, react by buying more quality assets at discounted prices.

WARNING, this does not constitute Personal Advice. To discuss if this is an appropriate strategy for your given circumstances, please do not hesitate to contact us directly.

Our business is based on referrals, so if you have family, friends or colleagues that want advice please ask them to contact us.