Concentration not Diversity

It may have been missed by readers in last week’e edition on Macro Extremes…….

but the ASX 200 equity index is at its most overbought reading since July 2019.

* on a mid-term, weekly basis

Today, the ASX 200 is trading at 7,296.

This may portend a decline in the index, however one of my predictions for the coming year or so, is that Index Huggers, ETF investors and even portfolios holding a large number of securities may be quite disappointed with their performance.

In other words, the index may oscillate in an uninspiring fashion and not reflect the ‘gems’ or winners found within.

I think there will be rotation of monies within sectors providing attractive investing opportunities but the index won’t necessarily paint that picture.

July 2, 2021

by Rob Zdravevski

rob@karriasset.com.au

It may have been missed by readers in last week’e edition on Macro Extremes…….

but the ASX 200 equity index is at its most overbought reading since July 2019.

* on a mid-term, weekly basis

Today, the ASX 200 is trading at 7,296.

This may portend a decline in the index, however one of my predictions for the coming year or so, is that Index Huggers, ETF investors and even portfolios holding a large number of securities may be quite disappointed with their performance.

In other words, the index may oscillate in an uninspiring fashion and not reflect the ‘gems’ or winners found within.

I think there will be rotation of monies within sectors providing attractive investing opportunities but the index won’t necessarily paint that picture.

July 2, 2021

by Rob Zdravevski

rob@karriasset.com.au