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Market Metrics: ASX200

• Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner

On Tuesday this week, the RBA (Reserve Bank of Australia) cut the official Cash Rate to 4.10% effective from Wednesday, 19th February 2025.

Interest rates cuts are good news for almost all assets because they increase the present discounted value of future income but this can also lead to asset price bubbles if the interest rate cuts end up being too big.

The attached is a historical reminder of the impact of impact of cutting interest rates on Australia listed companies and it is all positive with the exception the 1990 recession and the 2008 GFC.

Click for table.

Investing can be confusing but as Benjamin Graham taught, all we need to do is remain invested according to our appetite for volatility and when the next panic takes hold, react by buying more quality assets at discounted prices.

Our business is based on referrals, so if you have family, friends or colleagues that want advice please ask them to contact us.

At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.