2016 Market in Review

14th Dec, 2016

2016 Market in Review

 

The year to June 30 ended the same way that it started; with considerable uncertainly and market volatility.

The year began with Greece centre stage yet again amid fears it could default on its loan obligations; yet ironically, it was the UK that voted to leave the Euro. This raised fears that a chain reaction would occur elsewhere in the Euro zone, which could challenge its cohesion.

The Global economy however has continued to advance throughout the year, thanks largely to the US, China and to a lesser extent Europe where growth has improved. However, other parts of the world struggled particularly Japan and some emerging economies. Even though we saw China’s economic slow down, its continued growth rate in absolute terms however, is still impressive compared to others.

The Australian economy has performed reasonably well thanks to housing activity, although the States and sectors that are dependent on mining & energy industries have experienced difficulties. As expected, those sectors, which performed well, were those that are considered safe havens, or those providing income certainty such as global government bonds, gold, listed property.

Diversified Fund returns are marginally positive for the year, which is a credible return, considering the volatility we have seen through the year.

Market returns were broadly negative in local currency terms. Very few of the worlds major share markets managed to advance and for those that did the returns were generally, low single digits. The US share market was the best performer of global majors returning 1.7% in local currency terms. European share markets lost ground with both the German and French markets both down by around 11.5% whilst Italy’s market fell 28%. These falls were accentuated by the negative reaction to the UK's vote to exit.

The Asian markets recorded large losses due in part to China’s economic slowdown. Japan was one of the worst performing with the Nikkei index falling 23%, Hong Kong’s Hang Sang was down almost 21% and in China the Shanghai Composite Index fell 31,5%.

The Australia share market was one of few to generate a positive return. The ASX200 Accumulation Index increased by just 0.6% for the year. The best performers tended to be stocks and sectors with superior earnings potentials such as Healthcare which increased 21.5% or those with attractive distribution yields relative to Cash, Bonds and Term deposits such as listed property which was up 24.6%

Disclaimer:The information contained in this report is of a general nature and as such it should not be construed as personal advice. Whilst the writer has adopted care, diligence and competence, the information has not been prepared taking into account any particular investment objectives, financial situation or  particular needs. Should you require further assistance in making a full financial assessment you should make an appointment with either us or your current adviser with the view to tailor specific recommendations suitable to meet your financial needs and objectives.

view all news

Testimonial

"WCG were recommended to us by some friends. They were there to help when we first set up our company. They advised us on the best structure for asset protection and created a debt reduction and long term investment strategy that has enabled us to be profitable today." 

 

"We have done more for our business after meeting with you, than we have done in the past 5 years" 

 

"Thanks for helping me understand our employer superannuation obligations and setting up our company super fund. Your advice has been so helpful" 


The Wealth Creation Group and its Financial Advisers are Authorised Representatives of WCG Financial Solutions Limited, Australian Financial Services Licensee 481610, Registered Office at 351 Moorabool Street, Geelong VIC 3220.
Disclaimer: The information contained in this website is of a general nature and has been sourced on good faith as such it should not be construed as personal advice. Whilst the writer has adopted care, diligence and competence, the information has not been prepared taking into account any particular investment objectives, financial situation or particular needs. The Wealth Creation Group and WCG Financial Solutions Pty Limited accept no responsibility for any content contained in external links on other company websites or externally sourced information.