05 Dec Goldilocks stayed for 2024, but what’s in store for investors in 2025?
Key Points
- The key themes for 2024 were: better than feared growth; global divergence; more disinflation; falling interest rates but with Australia lagging; and more geopolitical threats but not as bad as feared. As in 2023, returns were strong.
- 2025 is likely to see positive returns, but after the surprising calm of 2024, it’s likely to be far more volatile (expect a 15% or so correction along the way) and more constrained.
- Expect the RBA cash rate to fall to 3.6%, the ASX 200 to rise to 8800 and balanced super funds to return around 6%.
- Australian home prices will likely see further softness ahead of rate cuts providing a boost in the second half of 2025.
- Key things to keep an eye on are: interest rates; recession risk; a potential trade war; and the Australian consumer.