Volatile and falling markets aren’t much fun for anyone. But Emma Fisher, portfolio manager at Airlie Funds Management, says investors who stay on the sidelines at times like this run a different sort of risk.
“We think if we are heading into a tougher period, that the Australian economy will probably do relatively quite well.”d, says he was overall quite impressed with the results delivered through the August reporting season, nominating private health insurer Medibank, plumbing supply group Reece, and building products giant James Hardie as the firms that delivered the highest quality results.
“It can be tempting when you’re worried about where the cycle is going to want to hide in defensives,” Fisher says. “Medibank we’re happy to own that still, even though it has performed well because it’s got the kicker from high interest rates in terms of its investment income, and it’s a capital-lite business model. So, it shouldn’t be hugely hurt by inflation.”
One of the big concerns of the August reporting season was the build-up in inventory at retail businesses, which have spent much of the past two years scrambling to secure stock amid supply chain shortages.