HAPPY NEW FINANCIAL YEAR

Some super quick thoughts about the financial year that was.

GLOBAL MARKETS

A strong year for global equities overall – the S&P +8.22% and ASX200 +6.85% put in good performance but other global markets didn’t perform so well. The STOXX 600 was up just 1.3%, dragged lower by the UK FTSE (-2.77%) and Spain (-4.41%0. Meanwhile Japan (-4.61%) was also disappointing.

Iron ore was the big winner along with Aussie bonds (the 10 year yield halved over the year) while coal, oil, and base metals were the big losers.

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DOMESTIC MARKETS

It was a year of the “big stock”, with the Top50 (+9.0%) outperforming small caps (-0.9%). This will mean you can expect the average stock picker – who might try and add value by investing outside the crowded big cap stocks – to underperform.

Most sectors were up for the year. Energy (-9.1%) was the big exception. The key theme for me was that the more “traditional” sectors such as big Banks (+2.7%), Staples (+0.9%), and Discretionary (-0.6%) underperformed, while the “newer” sectors such as TeleComs  (+34.8% which includes TLS but also TPG, VOC, CAR, REA, OML, SXL, SDA, SPK, NWS, NEC, DHG etc) and IT (+17.8) were strongest – along with Gold. The rest were in the middle.

The stocks speak for themselves. Telstra (TLS) +51.7% was probably the biggest shock for me, while I continually kick myself about missing out on FGM.

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