Stock market volatility is tipped to continue as markets globally come to terms with the effects of rising inflation and the realisation that interest rate rises are imminent, Argo Investments has predicted.
Looking further ahead, the investment company is of the opinion that the share market is unlikely to replicate the strong gains of the past 18 months.
“We remain confident in Australia’s underlying economic recovery, whilst cognisant that the share market’s strong returns recently have been supported by unprecedented stimulus and are not likely to be repeated,” Argo said in a statement on Monday.
So far this year, the ASX 200 index has retreated swiftly, now down over 5 per cent with increasingly volatile moves particular among technology stocks.
But Argo is confident in its future, flagging its “strong balance sheet and no debt” as key to continued growth.
“With cash on hand, we are well positioned to capitalise on opportunities generated by any market volatility in the short term,” the firm said.
Also on Monday, Argo reported an interim profit of $129 million, an increase of 91.5 per cent driven by increased investment income.
Argo explained that most companies in its portfolio raised or returned to paying dividends as the economy recovered. Its larger holdings increased dividends by more than 100 per cent, including Macquarie Group, BHP Group, Rio Tinto and National Australia Bank.
During the half year, Argo purchased $301 million of investments and received $191 million from portfolio sales and takeovers.
