Tom Scollon

You have made good money over the last few weeks and this appears likely to continue:

 
XAO Daily


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XAO Weekly


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Most sectors did well but the financial sector well and truly underperformed:
S&P ASX Financials (XFJ): Daily Line Chart


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 We can see the underperformance more clearly in an overlay:

S&P ASX Financials (XFJ): Weekly Line Chart


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Most retirees are heavily weighted toward the financial sector – the solid stocks – the banks in particular! Well they have been the so-called leading luminaries in our financial/commercial world. But their values are now coming into question.

If one was an ethical investor would you stay in banks – given that they have been very secure and paid excellent dividends with highly attractive dividend imputations over many years.

Truth is that there are many areas in our world today that are as nice as they should be and one must accept that it a tougher more aggressive environment we live in and barring highly objectionable corporate behaviour you need to place your investments somewhere and make an ‘’in balance’’ judgement. Even prime superannuation and managed funds will be heavily weighted towards the financial sector.

Another parallel is the reality that we must eat, for example, and if one looks too deeply into another essential aspect of life there will also be other examples of unattractive practices. Alas we must get on with life.

Investment decision making is tough enough and my view has been to keep it simple and I have not allowed extraneous issues, such as value judgment, to be a variable.


 

 

Enjoy the ride

Tom Scollon