Market Update 22 July 2022 Investment markets and key developments over the past week Global sharemarkets have rallied again this week with US up 3.5%, Australia 2.9%, Europe 3.4%, Japan 3.8% while Chinese stocks are down by 0.3%. Positive gains in most sharemarkets recently after weeks of declines is leading to questions about whether we have seen the low in markets. Our view has not changed – we think the risk is of more downside …
Inflation in the 70s – baby boomer fantasy or nightmare? Why central banks must focus on getting inflation back down Key points The high inflation of the 1970s was bad for economies and bad for investment returns. The long-term downtrend in inflation and interest rates is likely over removing a tailwind for investment returns. But a return to sustained 1970’s levels of inflation appears unlikely. Introduction I grew up in the 1970s and it …
National property prices fall for the first time since the pandemic – expect a 10-15% top to bottom fall Key points Australian home prices fell 0.1% in May, their first decline since the pandemic. The main drivers behind the downturn are: poor affordability with prices up nearly 29% over 21 months; rising mortgage rates; a rotation in spending away from housing; and a decline in home buyer confidence. We continue to expect a 10-15% fall …
Five reasons to expect a cooling in the Australian property market and falling prices in 2023 Key Points After a 22% rise in Australian home prices this year, they are expected to slow to 5% growth in 2022 with prices likely to fall 5-10% in 2023. The main drivers behind the slowdown are: worsening affordability; rising supply; rising rates; macro prudential tightening; & a rotation in spending away from housing. The main risks on …
Econosights: How will households respond to higher interest rates? Key points We think that the Reserve Bank of Australia will start to tighten interest rates at the end of 2022 (the RBA themselves think a rate hike will come in 2024 or possibly 2023). The last time the central bank hiked the cash rate was more than a decade ago. Falling interest rates over the past 20 years has led to a large decline …
Compound interest is like magic – and it’s an investor’s best friend Key Points Compound interest is an investor’s best friend. The higher the return, the greater the investment contribution and the longer the period the more it works. To make the most of it, ensure an adequate exposure to growth assets, contribute early and often to your investment portfolio and find a way to avoid being thrown off by the investment cycle. Introduction If …
12 things I’ve learned from renovating AMP’s Sandy Maxwell tries to create his dream home Thinking of renovating? You’re not alone. Sometimes it can feel as though the whole country is busy demolishing, sawing, painting, tiling, bricklaying… While new builds attract the bulk of our dollar spend, renovations are increasingly popular, perhaps reflecting a desire to fortify our castle defences from all the COVID craziness out there. In the March 2021 quarter, Australians spent $16.2bn …
Econosights: Should we be worried about an inflation breakout? Key points Current inflation concerns reflect a rise in consumer goods prices and a spike in energy costs. Most of the factors driving higher inflation reflect COVID related disruptions and should be temporary. But the inflation data is still likely to remain elevated over coming months. While a few central banks are starting to remove some monetary policy accommodation in response to inflation concerns, we don’t …
Original Author: Produced by AMP and published on 26/10/2021 Source
Great investment quotes for topsy turvy times Introduction The current environment seems to be one of extreme uncertainty. We have seen a strong economic recovery from last year’s global and Australian recessions – but there are worries about the resurgence of coronavirus driven by the Delta variant, peak growth, peak monetary and fiscal stimulus, high inflation, and high debt levels. And ‘get rich quick’ trading around crypto currencies and “meme” stocks like GameStop on …
