FNArena’s Weekly Insights – October 14 2024
In this week’s Weekly Insights:
Five Key Risks To Consider
By Rudi Filapek-Vandyck, Editor
Can we trust our fellow-investors?
Many years ago, a local strategy update by UBS made that question the central premise of a share market assessment that, ultimately, resulted in the conclusion it was probably best to pull some profits to the sideline and prepare for more volatile times ahead.
With share markets near all-time record highs, and the forward-looking PE multiple for the ASX200 above 18x, a level seldom witnessed without a sell-off beckoning, while there are plenty of ‘risks’ lingering, it’s probably an apposite question to ask ourselves.
In last week’s edition, I explained how the resilience of markets and the steady rise in valuations this year can be explained by investors’ forward-looking focus. It may still be the case that, come 2025, this year’s confidence proves accurate and justified.
But markets are not 100% rational; they are made and moved by people.
The Nasdaq index year to date is up in excess of 22%, with the S&P500 not far behind and the Dow Jones (DJIA) up by 13.73%, ex dividends. In Australia, the local market including dividends has returned nearly 10% year-to-date. Many gains from individual equities have been multiple times larger.
Can we trust our fellow-investors to stay “confident” and “relaxed” when the proverbial hits the fan?
