2018 was a challenging year for global sharemarkets, including Australia’s where the ASX 200 declined -6.8% over the calendar year.
The gains made in the first eight months were given up as the sharemarket fell from late August over a growing list of concerns, including, disappointing 2019 growth projections, the impact of higher US rates, the continued US-China trade war and the uncertainty caused by Brexit.
Anton Tagliaferro is the founder and investment director of Investors Mutual Ltd, a boutique, value style Australian equities fund manager. Drawing on his extensive experience with over 30 years in the finance industry, Tagliaferro observes that “in the initial stages of a sharemarket correction, it is not uncommon for almost every stock to fall as many investors rush to reduce their exposure to sharemarkets. However, when the panic subsides, and sanity prevails – which inevitably happens – good quality companies with strong underlying businesses, and with real earnings always recover well.”
Tagliaferro expects to see a period of consolidation in markets following the heavy falls of the December quarter. He recently shared his outlook for Australian Equities:
“At the end of December, we started to see the emergence of very good value amongst many quality Industrial stocks, which our Funds are heavily skewed towards and we expect the quality of these stocks to show resilience should the sharemarket correct further.”
While corrections are never pleasant for investors, they are an inevitable part of sharemarket cycles. As advisers, we review how each of our client’s portfolios are positioned and make adjustments as required. However, at all times we maintain our long-term strategic focus. A key part of our role is to help our clients understand what’s happening in the market, and provide comfort that their strategy and investments remain appropriate for their long term goals and objectives.
If you wish to read Anton Tagliaferro’s article in full, it can be accessed here.
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