Roskow Blog

A plain english update of markets for 2010.

What happened?

In any 12-month period, events occur around the globe that created uncertainty.  There has to be, or the media will sell no newspapers!  2010 was no different; this is what we experienced...

In the global market there were fears of a double dip in the US, public sector deficits in Europe and concerns over inflation.  Closer to home, the proposed mining tax, an election that resulted in a hung parliament and the Reserve Bank raised interest rates 4 months out of 11.

How did markets perform?

Well, in 2010 the Australian share-market (large companies) went down and up and down and up (as illustrated in Graphic 1) ending the year pretty much where it started.  The Global market experienced negative returns, listed property showed a promising recovery, fixed interest were positive, despite worries of a ‘bubble’ developing.



Most of our clients will be familiar with Graphic 2 below which ranks the asset sectors from highest to lowest.  Did you pick it?  As you can see Australian small companies were the top performer (for a second year in a row) and Global small companies was second (whilst its counterparts, Global large and value companies brought up the rear).


What does it all mean?

You should feel smart because you are diversifying and exercising discipline (not responding to news with knee-jerk reactions).  Some investors became more risk-averse during 2010 and fled to fixed-interest assets which means they missed out on returns.  As always, the best defence in all cycles is diversification and discipline and only take as much risk as you need to achieve your goals.


For a more comprehensive review click here.