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Key Points Starting point valuations – like yields and price to earnings ratios – are key drivers of medium-term investment returns. Valuation starting points for term deposits and bonds have improved. For shares they suggest constrained return potential, particularly from US shares but Australian, European...
Key Points Many of the mistakes investors make are based on common sense rules of thumb that turn out to be wrong. As a result, it’s often wise for investors to turn common sense logic on its head. The easiest way to avoid many of...
Key Points A move towards more aggressive fiscal policy stimulus and property support measures should help drive a mild cyclical upswing in China’s economy. However, it’s doubtful it will be enough to reverse longer term structural problems facing China – around excess saving, demographics and...
Key Points The US election has significant potential to impact markets. A Harris victory would mean more of the same, but a Trump victory could lead to uncertainty particularly around trade. Australia would be vulnerable to a rapid intensification of trade wars which is looking...
Key Points Recession risks, the escalating Israel conflict, the US election along with still stretched valuations mean a high risk of another share market correction and continued volatility. The expansion of the war around Israel and Iran attacking Israel with more missiles is very concerning...
Key Points Predictions of an Australian house price crash create lots of interest but have been a dime a dozen over the last 20 yrs. However, there is more to the surge in property prices than easy money with a supply shortfall being the main...
Key Points While growth assets like shares go through bouts of short term underperformance versus bonds and cash, they provide superior long-term returns. So, it makes sense that superannuation has a high exposure to them. The best approach is to simply recognise that occasional sharp...
Key Points Shares have hit a rough patch since recent highs with concerns about the growth outlook. We remain upbeat on a 12-month view as falling inflation allows rate cuts and hopefully recession is avoided or is mild. But the risk of a further correction...
Key Points The risk of recession is high. The falls in shares and commodity prices reflect this. Lower growth and recession would mean a high risk of the inflation rate undershooting the RBA’s inflation target. The RBA should be considering cutting interest rates. Share market...
Key Points The continuing rise of populism globally – as evident in recent European elections and in the US with Trump and the Republican party – is signalling an ongoing shift away from economic rationalist policies in favour of greater government involvement in economies and...