Month: December 2023

Introduction There is an ever-present worry list surrounding investment markets – usually involving some combination of concerns about economic activity, inflation, profits, interest rates, politics, natural calamities, wars, etc. It makes it hard for investors to stay focussed and avoid silly mistakes. Uncertainty is magnified by perennial predictions of a crash and then periodically by … Read more

Introduction The big surprise in the Australian housing market last year was how quickly home prices fell with RBA rate hikes. But the big surprise this year is how they rebounded when most including myself were looking for further falls. October CoreLogic data showed another 0.9% rise in national home prices, leaving them just 0.5% … Read more

Introduction Starting in the early 1980s investment returns were spectacularly strong. Sure there were bumps along the way like the 1987 share crash, but Australian balanced growth superannuation funds returned an average 14.1% pa in nominal terms and 9.4% pa in real terms (i.e. after inflation) between 1982 and 1999. And that was after taxes … Read more

Introduction The war in Israel is terrible from a humanitarian perspective. From an economic and investment perspective the concern is that it will lead to a surge in oil prices that will add to inflation, keep interest rates higher for longer and add to the risk of recession. This note looks at the main issues. … Read more

Introduction In the fourth year of my career the share market crashed. In one day, US shares fell 20% and the day after Australian shares fell 25%. From the months just before to the months just after US shares had a total 35% fall and Australian shares had a 50% fall. So, over the space … Read more

– and how do valuations look now? Introduction It’s logical that the cheaper you buy an asset the higher its prospective return might be. However, this is frequently forgotten with investors often tempted to project recent returns into the future regardless of valuations. A valuation measure for an asset is basically a guide to whether … Read more

Introduction For years now there has been much discussion about poor housing affordability in Australia but debate about how immigration contributes to this issue is often lacking. For a country with abundant land, it’s ironic that housing affordability is so poor. Much of the focus has been on grants and other means to make it … Read more

Introduction At its September meeting the RBA left the cash rate on hold for the third meeting in a row at 4.1%. The pause in interest rates over the last three months comes after the biggest interest rate hiking cycle (of 400 basis points over 14 months) since the late 1980s. (While the 1988-89 rate … Read more

Dr Shane Oliver – Head of Investment Strategy and Chief Economist, AMP “More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other to total extinction. Let us pray we have the wisdom to choose.” – Woody Allen Introduction The “news” as presented to us … Read more

Dr Shane Oliver – Head of Investment Strategy and Chief Economist, AMP Introduction Scepticism about China’s economic success has been an issue for years. But it’s intensified lately on the back of slowing growth, property problems, high debt and falling long term growth potential with talk that China is “teetering on the brink” and President … Read more