Well here we are in February already! I hope your year has begun well.

There’s an old saying, “as goes January, so goes the year” which is often referred to as the January barometer. While it’s not reliable when shares fall in January, since 1980 positive returns for January in Australia have had a 70% hit rate of going on to see gains for the year as a whole. In the US, the hit rate has been 90%. So the fact shares have started the year positively augurs well for a good year. That said, while January is seasonally a solid month, February is often soft and after the huge gains since the last correction in November, shares may be vulnerable to a short term pull back or consolidation.

The announcement of the Australian Federal election to take place on 14 September, well in advance compared to previous campaigns, risks acting as a dampener on spending to the extent that it may effectively mean a very long election campaign,and election campaigns often see a bit of caution creep into consumer spending and investor behaviour. However, I doubtthat the impact will be significant. It is more likely that Australians won’t really start thinking about it much until August. Oh what fun!

In this month’s issue we discuss japans new inflation and quantitative easing plans and how that will play out for the world markets. We look at the pros and cons of buying property off the plan and look at making extra savings by using redraw and offset facilities with your loans. We hope you find them informative.

Until next time,