Lipins Partners Investment Update
As the end of the financial year races towards us, we just wanted to give you a quick review of how the market has performed over the last quarter. We look at which sector had gains and which sectors weren’t so great.
Looking back over the first quarter of 2014, the All Ordinaries gained nearly 1% which is fairly positive. This would suggest that returns are looking to get back to a more normal range of 8-9% compared to the last year’s lift of around 20%.
Best and worst performing sectors of 2014 so far
If you’re looking to invest in different sectors to diversify your portfolio strong sectors include IT (up 6.5%), Utilities (up 4.4%) and Financials (up 3.8%). Sectors that went the other way include Materials (Resources) (down 0.4%) and Consumer Staples (down 0.9%).
Property has performed extremely well, with home prices increasing steadily for the last 10 months. March has been the strongest with a 2.3% gain which is the biggest monthly gain in over 18 years. Property values in ALL capital cities have recorded gains emphasising the underlying strength of property markets.
Once again property investment has become attractive due to the low vacancy rates and strong rental yields. Low interest rates have also contributed to the drive in activity. Recently the Reserve Bank appears to be monitoring house prices closely as policy makers would be wary of home buyers becoming over leveraged due to the current low rates which will inevitably rise.
Building Boom Looming
It is important to note that there has been an increase in the sale of land and building approvals. This should lead to a building boom increasing the housing supply which should dampen any gains as the 2014 year progresses. As the building boom gains momentum it will have a multiplying effect through builders, developers, landscape gardeners, home fittings, appliance and DIY retailers. So we could see a significant increase in the retail sector.
If you’d like to talk through your investment strategies, or to discuss how Lipins Partners can build a ‘Freedom Plan’ for you contact us now on 03 9816 6200!
Together we can help you have a beautiful financial future.