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On this week’s Money & Investing, Mitch Olarenshaw works with me to review the end of the financial year across markets, key factors driving them, and what to expect moving forward.

We begin by comparing Australian and US markets, noting the significant differences in performance. While the US market has seen remarkable gains, driven primarily by the ‘magnificent 7’ stocks, the Australian market has shown modest growth.

We analyse the impressive performance of the S&P 500 and Nasdaq, highlighting key statistics such as the 21st best-ever run for the S&P 500 in the first half of the year.

We discuss the impact of strong corporate earnings and the importance of understanding valuation metrics like the P/E ratio and the Sharpe ratio.

Central bank policies

We also touch on the differences in central bank policies between the US and Australia, particularly in managing interest rates. Jerome Powell’s clear communication has provided certainty for US markets, while the Australian central bank’s approach has been less transparent, contributing to economic uncertainty.

We explore potential risks, including the narrow market breadth in the US, where a few stocks are driving most of the gains. We also consider the implications of the upcoming US election, possible interest rate cuts, and geopolitical tensions.

Finally, we emphasise the importance of risk management and protection strategies in investing. We explore the benefits of index investing and using options to protect portfolios, especially in volatile markets.

For more Info about Money and Investing you can go to the podcast at http://www.moneyandinvesting.com.au/; The Wealth Playbook: Your Ultimate Guide to Financial Security: https://www.wealthplaybook.com.au/, and The Wealth Playbook on Audible: https://www.audible.com.au/pd/The-Wealth-Playbook-Audiobook/B0CXYYWZTB?qid=1711282387

Disclaimer: Wealth Magnet Pty Ltd (ABN 52 618 868 830) trading as Australian Investment Education is a Corporate Authorised Representative (CAR no. 1255231) of Grange Financial Services Pty Ltd (AFSL No. 488609).

The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.

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