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The Emotional Investor

Economics tell us that, or assumes, that individuals (which includes investors) act in a rational manner – that they are fully informed and make logical, sensible decisions.

The news of Altair Asset Management returning investor funds at an “overvalued and dangerous time in this cycle” sent a quiver through the investment community. Has this ever been done before? A fund manager, who by definition makes his living by managing funds, emphatically saying to investors the market is cooked and I can’t manufacture any further returns for you.

See: https://www.businessinsider.com.au/the-4-reasons-this-fund-manager-cashed-in-all-his-australian-shares-2017-6

Then this was followed up by the Australian Treasurer Scott Morrison terrifying markets with the dire warning of over Australia’s GDP growth forecasts.

http://www.smh.com.au/federal-politics/political-news/treasurer-scott-morrison-sounds-warning-over-economic-growth-in-march-quarter-20170601-gwhud2.html

And then the barrage of Doomsayers started warning us of a property crash, another recession, interest rate rises, the systemic issues within our banking system and of course the inevitable stock market crash…….

Hmmm sounds like we are in some trouble hey?

But hang on – didn’t we hear a similar rhetoric when The Royal Bank of Scotland emphatically and very publicly told clients to “SELL EVERYTHING” in expectation of a “cataclysmic year” for markets.

http://www.washingtontimes.com/news/2016/jan/12/royal-bank-of-scotland-warns-clients-to-sell-every/

So, there you have it – the Investment Markets of the Universe have spoken, telling us that the markets have turned to soup.

Economists say the Australian economy is once again on its knees. The latest official data today is pointing to national economic growth grinding to a halt.

But hang on, there is just one problem with this – and that is has anyone checked the charts? The markets haven’t actually crashed – in fact the Royal Bank of Scotland gave us a great example of the Emotional Investor and how such headlines can often provide us with excellence guidance at market extremes.

Now I’m not sure how rationally Mr Philip Parker, the chairman and chief investment officer of Altair Asset Management, is acting. Maybe it’s not just the markets, but that he might have upset his mum?

http://www.smh.com.au/business/altair-boss-philip-parker-linked-to-dispute-over-mothers-shares-20170531-gwgxb0.html

Regardless, experience tells me there is opportunity in the air!

So I’m thinking its again time to look for your investment signals and see if there is something there for you to buy….

 

IMPORTANT NOTICE

Disclaimer: Any opinions or recommendations expressed here do not purport to Financial Advice but rather should be considered General Advice and does not take into account your personal needs and objectives or your financial circumstances. You should therefore consider these matters yourself before deciding whether the advice is appropriate to you and whether you should act upon it. Should Financial Advice be sought, we suggest you seek such advice from an appropriately qualified advisor. Any yields, rental income, tax rates, interest rates, deprecation rates, inflation rates Dividends per Share (DPS) and Earning Per Share (EPS) etc shown are estimates only and should not be used as a guide to future performance. Past performance is not necessarily a guide to future performance and should not be relied upon for this purpose. Authorised Representative of PGW Financial Services Pty Ltd – AFSL 384713

 

By | 2017-07-03T13:54:53+00:00 May 31st, 2017|Cycles, Equities, Wealth|0 Comments

Jeremy and Ian are the Directors of Calnan Flack

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