Cash is king in this months update from Morgans September Investment Watch.
The stockmarket moved through the August reporting season despite downgrades to FY15 earnings expectations and a cautious outlook from corporate Australia. This seems counter-intuitive, but the waves of dividends returning to shareholders is an amazing motivator for yield-hungry investors in a low interest rate environment.
The market was cautious heading into reporting season. It was trading about 10% ahead of the long term PE average multiples while expectations for FY14 earnings had been flat over the course of the year. This suggested that expectations were already low and that any misses would be treated harshly.
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