From Values to Riches

Unsurprisingly, climate change is a top concern for Australians. Here is the latest of RIAA's research which shows that now "four out of five Australians (83%) expect their bank account and their super to be invested responsibly and ethicallyand 74% would consider moving to another provider if they found out their current fund was investing in companies engaged in activities that were inconsistent with their values."

From Values to Riches 2022: Charting consumer demand for responsible investing in Australia from the Responsible Investment Association Australia.

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Can we expect share markets to level out?

Can we expect share markets to level out?

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Farewell Fiscal 2022, Hello Fiscal 2023

The Australian market has held up better than the US market due to lesser exposure to technology and our strong performance in the mining and resources sector. However, the Australian all Ords has fallen 13%, the S&P 500 21% and the Nasdaq 30%.

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CLIMATE CHANGE - is it real? Will it affect my investments?

In just two years, we have suffered through multiple record-breaking floods and a fire season never experienced before. Even at current levels, human actions in heating the climate are causing dangerous and widespread disruption, threatening devastation to swathes of the natural world and rendering many areas unliveable, according to this landmark report published last month.

Climate breakdown is accelerating rapidly. It is now predicted by the Intergovernmental Panel on Climate Change ((IPCC) that many of the impacts will be more severe than predicted and there is only a narrow chance left of avoiding its worst ravages. We are seeing the effect of climate change induced devastation on food prices.

Adding fuel to inflationary pressures has been a global pandemic where supply chains have been disrupted like never before, heightened geopolitical risks with the Russian invasion of Ukraine, putting price pressures on everything from crude oil to wheat to sunflower oil.

The Intergovernmental Panel on Climate Change (IPCC) is the United Nations body for assessing the science related to climate change.
The report is free to download

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Investments

This commentary from Tom Dyson, investment director at Bonner Private Research, confirms the Fed’s aggressive approach but asks the question: ‘Could Jerome Powell be bluffing’.

Excerpt preprinted with permission of Bonner Private Research

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WORLD ECONOMY and INFLATION

This article from David Bassanese, Chief Economist of Betashares, suggests that the Fed will be more aggressive in their approach as the US economy continues its growth trajectory.

Reprinted with permission of Betashares

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Fossil fuel subsidies - why are they important?

Instead of making fossil fuels more expensive, many governments, inclusive Australia, do the opposite.

They subsidise them.

If we want to reduce greenhouse gas emissions we should not pay to burn fossil fuels.

Reprinted with permission of Our World In Data

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Why money is jumping ship to responsible and ethical investments

The Responsible Investment Benchmark Report Australia 2021 shows money is jumping ship to responsible and ethical investments.

The Australian responsible investment market continued to soar in popularity to $1.2 trillion in 2020, with responsible investment assets growing at 15 times the rate that overall Australian professionally managed investments have grown.

The report by Responsible Investment Association Australasia (RIAA) details industry data on the Australian responsible investment market over 12 months to 31 December 2020 and compares these results with the broader Australian financial market.

Reprinted with permission of RIAA - Responsible Investment Association Australasia

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WORLD ECONOMY and INFLATION

As you know, I am keeping a wary eye on inflation. The issue that has emerged is the rapid increase in inflation across global markets led by the US which is now reporting an annual inflation rate of more that 6%.It is noteworthy that Jerome Powell, the Chairman of the US Fed removed the word ‘transitory’ from his latest inflation comments.

This is compounded by the global logistics and supply chain problems which have caused significant increases in global shipping costs with a flow on effect on the price of manufactured goods and raw materials across global markets. The result will be to put further pressure on inflation. In Australia, it has resulted in a chronic supply shortage of goods in the run up to Christmas for both retailers and consumers. I enclose a commentary by David Bassanese, Chief Economist of Betashares, which is well worth reading with a preview of 2022 markets.

Reprinted with permission of Betashares

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ETHICAL INVESTING and PERFORMANCE

The body of evidence continues to stack up – nationally and globally - showing that responsible investments typically achieve stronger risk- adjusted financial performance than their peers, consistently outperforming against benchmarks over short-term and long-term time frames. This is the latest comparative performance update of Responsible Investments from the Australasian independent industry body.

Reprinted with permission of RIAA - Responsible Investment Association Australasia

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