Livewire Exclusive

John Abernethy CIO of Clime has the following view on the Australian share market from a value perspective. “On a valuation metric it has fallen into value …the Australian market using a bond yield of 3% is presenting as good value. However, the outlook is difficult, the risk of recession is there on the table, it is not odds on but it is certainly a risk we have to acknowledge”. Abernethy highlights, that he believes that historically bond yields are too low or in other words the risk free rate of return is too low, “so your proxy for assessing value is skewiff and that’s the problem.” The overarching message communicated by Abernethy is that current prices look interesting, but there is no hurry,“because the world is in a state of flux…you can speculate your head off or you can invest. Today at these prices in Australia is not a bad time to invest…but if the market fell another 5 to 10% from here be prepared to wear it and have enough cash to access it.” See video below.



Comments

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James Marlay

Great video, very sensible comments about risk and being aware of the potential for capital loss

Vijay Trivedi

Very good advice for long term/value investors.

Vijay Trivedi

Very good advice for long term/value investors.