Market & Portfolio Update - September 2023
Global share markets gave back some of their gains in September, declining 3.7% in local currency terms, but they remain up 12.1% year-to-date.
Energy companies benefitted from higher oil prices. The industry benchmark, Brent crude oil rose by 10% during the month to US$95 p/b, following the extension of production cuts by Saudi Arabia.
Key central banks around the world met in September, with most leaving their policy rates unchanged, whilst delivering commentary indicating we may see interest rates remain higher for longer, as well as leaving the door open for more hikes if required. Sticky inflation and strong US economic data, which point toward resilient economies and labour markets, are forcing central banks to be cautious.
The “higher for longer” messaging from central banks contributed to a reasonable increase in the yields on longer-dated bonds. Yields on the US 10- and 30-year bonds were up over 0.5% for the month and now sit at levels not seen since 2007.
Rising bond yields weighed on portfolio returns last month (as bond prices and yields are inversely related). However, there is a silver lining - higher yields mean reinvestment rates are now more attractive, supporting the future returns of bond investments.
Scroogenomics at Christmas: Finding Joy Beyond ‘The Extravagance’
Gazing through the dimly lit windows of his modest office, Ebenezer Scrooge pondered the modern-day Christmas, “Ah, Christmas – each December, a tide of frivolity sweeps the world, with consumers collectively parting with an estimated $1 trillion globally on holiday spending.”
Reflecting on this, the Scroogenomist wonders, “What if Christmas were not marked by gaudy extravagance, but by acts of kindness? A season where gifts are not measured by their price tags, but by the care and thoughtfulness behind them. A handmade scarf, a heartfelt letter, or simply the gift of time – all these carry more value than gold. How uplifting it would be if people prioritized what truly matters: love, compassion, and the joy of giving.”
Lifetime Book Club: Enough by John C. Bogle
Welcome back to the Lifetime Book Club! As we wind down the year, this month’s pick is Enough: True Measures of Money, Business, and Life by John C. Bogle. This reflective and thought-provoking book challenges us to rethink what we value most, making it a perfect December read for anyone looking to reflect on the year that’s been.