Category: Recessions

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EconomicsAustralian economyRecessionsInterest ratesInflation

Company insolvencies highest in 35 years - and we’re not even in ‘recession’ yet!

Company insolvencies in Australia have soared back to levels not seen since the deep 1990-1 recession. Business is doing it tough - on recession footing already. But the rapidly expanding government sector is doing fine - accounting for almost all of the growth in jobs and economic 'activity' (and artificially suppressing inflation and unemployment numbers), while businesses suffer.

Ashley Owen Apr 09, 2025

Financial MarketsInvestment & Wealth MgmtRecessionsAustralian shares Stock market crashes

‘Buying the dip?’ – ‘Catching Knives’ or ‘Bagging Bargains’? – the Aussie share market experience

Following my story on US market dips, here is the same analysis for the ASX: The Aussie market has had 36 dips of -10% or more since 1920. Buying the dips still resulted in more 'Knives' than 'Bargains', and below average returns overall, but the outcomes were significantly better than buying the dips in the US market. 83% of dips on our market were led by falls on the US market. Of the few dips that were due to local factors alone, most were 'Bargains'. Where are we now? Will I be buying the dip here as the US boom deflates?

Ashley Owen Mar 23, 2025 1

RecessionsInternational sharesStock market crashesInvestment & Wealth Mgmt

After the mini-correction, should I ‘Buy the dip?’ - Am I ‘Catching Knives’ or ‘Bagging Bargains’?

The US stock market has had 31 'dips' of -10% or more since 1900. We look at what happened in each case if you 'bought the dip'. In most cases, a 10% dip turned out to be just the start of a much larger fall (further -15% fall on average), and for a much longer period (more than a year of further falls on average). Overall, buying the dip resulted in poor returns over subsequent 1, 3, and 5-year periods, but there were several times when 'buying the dip' led to high returns. Where are we now? How does today's market compare?

Ashley Owen Mar 18, 2025 2

Financial MarketsRecessionsInvestment bubbles/busts, cyclesInvestment & Wealth MgmtStock market crashes

Bring on the Trump ‘volatility’! - My Volatility Spike Index separates the calm from the storm

Trump's first term was certainly entertaining, but was it volatile for financial markets? Let's look at facts, not mindless media chatter warning of 'more Trump volatility!', or 'another bumby ride!'. My Volatility Spike Index highlights and compares all volatility spikes since 1970.

Ashley Owen Jan 21, 2025

Financial MarketsRecessionsAsset classes, asset class returnsStock market crashesInternational sharesAustralian shares

125 reasons NOT to invest! ‘This time is different’ – or is it?

It's that time of year again - time to review a whole new year of possible threats, risks, and crises that might blow up share markets. What are the big risks that might spook investors in 2025? How share markets power through even the greatest crises the world has ever faced.

Ashley Owen Jan 14, 2025 2

InflationInterest ratesInternational sharesRecessions

Let the US rate cuts begin! Usually good for shares, but it will NOT be plain sailing!

In rate cut cycles, shares have usually posted higher returns, but also higher volatility The big issue is inflation - has it been solved or will it revive like in past cycles? With monetary policy now being eased, can we rely on Trump or Harris for fiscal restraint to contain inflation?

Ashley Owen Sep 18, 2024

RecessionsAustralian economyInterest rates

Company insolvencies up 100%! - 3 reasons not to panic

Yes, company failures are up 100% - but here are three reasons not to panic Insolvency rates tell us about the Business Cycle - Where are we now? Where to next? Which industries are under most pressure? Why the next recession will see fewer company failures than past recessions Why I'm bullish on Aussie companies as a whole, recession or not

Ashley Owen Mar 21, 2024

RecessionsInflationAustralian economySocial & EnvironmentalEconomics

Australia's 'Misery Index': Inflation + Unemployment

Australia's Misery Index: Unemployment + Inflation. Where are we now?

Ashley Owen Feb 16, 2024

Stock market crashesWars & military conflictsInvestment bubbles/busts, cyclesInternational sharesAustralian shares Asset classes, asset class returnsRecessionsRetirement planning

124 Reasons NOT to invest! - This time is different - or is it?

Every year there are ‘End of the world’, or ‘End of life as we know it’ crises and threats that scare investors into waiting and watching from the sidelines, but share markets have always seemed to power through them. Are the current batch of threats and fears different this time?

Ashley Owen Jan 17, 2024

Stock market crashesInvestment bubbles/busts, cyclesRecessionsAustralian economyFinancial MarketsEconomics

Why do share markets crash? – Part B: Update on Australia

The simple answer is that the Australian share market crashes (and rebounds) because, and when, the US market does. The US is the largest and most influential market that affects all global markets, asset classes, and investors. What happens on our local market is almost always driven by what happens on Wall Street (with rare exceptions like 1907 and 1951), regardless of local conditions, events, or pricing.

Ashley Owen Nov 27, 2023

Australian shares RecessionsAustralian economyFinancial MarketsEconomicsStock market crashes

Why do share markets crash? – A: Update on the US

Recessions do NOT cause or trigger share market sell-offs. Nor do share markets crash because, or when, they become expensive. Share markets fall when shareholders en masse suddenly start to expect imminent big cuts to profits and dividends.

Ashley Owen Nov 23, 2023

Stock market crashesInvestment bubbles/busts, cyclesAustralian shares Recessions

ASX reporting season in 4 charts - $40b wiped off profits! - where did it go, and why?

August is the main full-year reporting season for Australian listed companies, as most companies have June reporting years. For ASX100 companies that reported their June full-year results in August, total profits fell by one third from $116b to $76b.

Ashley Owen Sep 01, 2023

InflationInterest ratesRecessions

Last time we had an inflation-busting rate-hike Recession – shares surged! This time is Different –

Nothing scares investors more than news of a ‘recession!’ But why? Recessions have mostly been good for Australian shares! That’s right. Contrary to the popular myth that recessions are bad for share markets, in the vast majority of economic ‘recessions’ in Australia over the past 150 years, the local share market has actually risen!

Ashley Owen Aug 28, 2023

‘For many years, Ashley has been my go-to source of information and analysis on what’s going on in financial markets and why.’

“Ashley has an encyclopaedic knowledge of the markets – I call him Mr Google!”

Noel Whittaker, AM – Australia’s best-known personal finance writer, columnist, and media commentator for the past three decades. He has written more than 20 books on personal finance, his columns appear in almost every major Australian newspaper, and he appears regularly on radio and TV as an expert on finance and investing. Noel Whittaker AM

“Over the past 20 years, Ashley has been an invaluable assistance to me, as a reliable source of unbelievably strong and interesting data, and many good investment ideas.”

"The depth and quality of Ashley’s research and analysis of investment markets is the best in the business.”

Dr Don Stammer - Australia’s most respected economic writer, commentator, and speaker for the past 40 years, with a distinguished career including the Reserve Bank of Australia, Chief Economist at Deutsche Bank Australia for 21 years, chair of nine ASX companies, plus numerous non-listed and not-for-profit boards. Read more

“Ashley is one of the best writers and thinkers on financial markets in Australia. His unique analysis and research is always fact-based and insightful, not the usual uninformed market noise and waffle that infects the mainstream financial media.”

Graham Hand - Editorial Director of Morningstar Australia, including Founder/Managing Editor of FirstLinks, Australia’s leading newsletter and publishing service on wealth management, superannuation, and personal finance.

“What sets Ashley Owen’s analysis apart from investment banks and the financial press is his deep fact-based understanding of long-term financial data, rather than getting caught up on the daily noise over issues that may generate trades or sell newspapers today, but will be irrelevant and misleading two years from now.”

Hugh Dive, CFA. Chief Investment Officer, Atlas Funds Management, and frequent expert commentator quoted in the AFR.

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Chris Cuffe, AO – One of Australia’s best known and most experienced investment managers – former CEO of industry giants Colonial First State, then Challenger Financial; founder and Chair of Australian Philanthropic Services, and Third Link Growth Fund; current/former chair, director and/or investment committee member of numerous funds including UniSuper, Argo Investments, Hearts and Minds Investments, Paul Ramsay Foundation, and many others. Read more.

Recessions

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