MENU

Will the Reserve Bank’s meeting impact the ASX this week?

Credit: Pixabay

The Board of the Reserve Bank of Australia (RBA) is meeting this week and is expected to announce its monetary policy decision for the month, as it does on the first Tuesday of every month.

While most analysts expect the RBA to keep rates on hold, they will be looking for clues and forward looking statements in relation to the overall state of the economy, GDP growth, inflation, interest rates and the Australian dollar.

With all these different factors at play, you might wonder whether you need to pay more attention to the outcomes of these meetings.

After all, if you are an investor in the big banks Commonwealth Bank of Australia (ASX: CBA)Westpac Banking Corp (ASX: WBC)Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB);  you might be really interested in the interest rate decision.

If you own shares in companies such as CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH) which earn a significant portion of their income from the US, you might be really interested in where the Australian dollar is headed.

So do you need to focus more on the outcomes of RBA meetings?

I think it depends on your investment strategy. Some investors, such as billionaire hedge fund manager Ray Dalio have a strong macro-economic focus and make investment decisions based on their view of where we are in the economic and credit cycles.

Others, such as Warren Buffett are more focused on the underlying fundamentals of the business and its management team. That’s why it’s no surprise when Buffett says he has bought shares in boom times, during recessions and under every single US president in his lifetime. He even bought shares the night Trump got elected!

I prefer this long term and fundamentals based approach. That’s why even though I will read about the RBA decision this week, I won’t make any buy or sell decisions for my portfolio purely based on the outcomes of that meeting.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Kevin Gandiya has no position in any of the stocks mentioned.

You can follow Kevin on Twitter @KevinGandiya. The Motley Fool Australia owns shares of National Australia Bank Limited. The Motley Fool Australia has recommended Cochlear Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.