Invest Now? Things Might Not Be What They Seem

14th of October, 2019 

Many years ago, there was a farmer who owned a beautiful homestead on a picturesque piece of land that was enriched with the greenest of pastures. One day while out attending to his farm he sighted a beautiful white stallion. The wild stallion was the envy of everyone in the village, but no one had been able to capture the animal.

So, the farmer set about capturing the majestic animal and after many days of trying he was victorious and proudly led the animal through the town to the admiration of the villagers.

Photo by Tiago Almeida on Unsplash

All his neighbours gathered to congratulate him: “How fortunate you are.  So blessed.” They cried, to which the farmer responds, “We’ll see”

The next day the farmer’s son saddled up the stallion and attempted to ride it. The white stallion reared and bucked eventually throwing the farmer’s son to the ground, breaking his leg.

All the neighbours who had gathered to watch the spectacle were shocked and said “Oh my, what a shame. Your poor son, how terrible for him.”  to which the farmer responds, “We’ll see”

The very next day soldiers came to the village to enlist every able-bodied man into the army.  Because the son had a broken leg, the soldiers left him alone.  The neighbours gathered to congratulate the farmer: “How fortunate for your son to have broken his leg. And you are so lucky you are able to keep your son safe at home with you.”

And so the story continues……

Often things are not what they seem.

A firefly is not a fly – it is a beetle.

A prairie dog is not a dog – it is a rodent.

Indian ink is not from India – it is from China and Egypt.

A lead pencil does not contain lead – it contains graphite.

A Douglas fir is not a fir – it is a pine.

Photo by Pixabay from Pexels

So, I ask you, is any event really good or bad?

There is no way to know because what looks bad (or good) on any given day might turn out to be just the opposite in the following days.

So, think about this little tale as you agonise over the recent falls in the share market. $45B is a lot to wipe off the values of the ASX in a couple of days. The Australian Financial Review said “ASX whacked amid global stock rout.”

Like the Farmer’s “We’ll see” attitude, at Calnan Flack we see opportunity here amongst the blood and anxiety on the street.

Fears abound of a looming recession. The RBA like other central banks around the world are in a death-defying spiral of continually cutting interest rates. Trump is taunting China like a school yard bully and BREXIT, well enough said there.

Photo by Annie Spratt on Unsplash

However, it is important to view things within context. Remember the Aussie market just rallied nearly 1,500 points in a vertical manner off the December 2018 low. It is probably reasonable to expect some sort of retracement?

When the market gently drifts down 500 points that’s seen as OK by the public. But when a 500 point drop occurs in a couple of weeks, well there is only one thing to conclude. “Another GFC is upon us…”

Just maybe what appears like the beginnings of the next financial market disaster might turn out to be just the opposite in the following weeks.

“We’ll see”…

Chart from Optuma

Let’s get started

If you want to avoid the mistakes of not understanding the dangers of investing without an understanding of the Economic Cycle, then why not have a chat to us about how we can help?

You have nothing to lose except a few minutes of your time and everything to gain.

So… let’s get started.

State *
Thank you for your message. It has been sent.
There was an error trying to send your message. Please try again later.


Disclaimer: Any opinions or recommendations expressed here do not purport to Financial Advice but rather should be considered General Advice and does not take into account your personal needs and objectives or your financial circumstances. You should therefore consider these matters yourself before deciding whether the advice is appropriate to you and whether you should act upon it. Should Financial Advice be sought, we suggest you seek such advice from an appropriately qualified advisor. Any growth rates, yields, rental income, tax rates, interest rates, depreciation rates, inflation rates Dividends per Share (DPS) and Earning Per Share (EPS) etc shown are estimates only and should not be used as a guide to future performance. Past performance is not necessarily a guide to future performance and should not be relied upon for this purpose. Authorised Representative of PGW Financial Services Pty Ltd – AFSL 384713 ABN 15 123 835 441.