History indicates that Australian house prices are more likely to flatline than collapse. The main problem is likely to be in high-rise construction, with banks exposed to highly-leveraged buyers and developers.
Author Archive | Ashley Owen
Investors celebrated when the Dow broke through the 20,000 mark last month, but in real terms, it’s a more sobering picture. Australian stocks in particular are struggling to reach their previous heights.
Investors are receiving the repetitive message about how low returns are the new normal, yet all asset classes have done well for a record stretch of time. Amid the chatter, the data proves the point.
President-elect Donald Trump divides opinion, and there is no way of knowing whether the rhetoric that won him the top job will translate into action. Here’s a quick look at some implications.
Most commentators believe there is a positive correlation between economic growth and share market performance. The data disproves this, at a world and country level and over time.
Since the 1900s, share market returns for US and Australian investors have been similar over the long run, but lately, US shares have outperformed with the current tech boom. How about +66% versus -2% since 2007.
Increases in Australian house prices are slowing but there are many reasons for an underlying support, but some locations for apartments will not do as well. Housing recovery continues in the US.
Britain is less important to Australia as an export market than it has ever been, reducing the impact here of any short-term Brexit disruption. It’s possible that Britain will benefit from Brexit as a new sense of independence encourages spending and employment with less external interference.
The close relationship between the Japanese share market, Japanese yen and the Australian share market shows that Japanese economic policy and a further boost from ‘Abe-nomics’ may have implications here.
Understanding how credit spreads relate to share prices and what they can reveal about where we are in the stock market cycle can be useful information for the long-term investor.
The fiduciary duty of banks, while not legislated, is implied by their central role in the economy. Bank deposits are accepted as ‘money’, and public confidence in banks is fundamental to a functioning economy.
Listed property trusts have outperformed shares for four of the last five years but after property price increases driven by foreign buyers, what might the future bring?
With the broad Australian stock index down 8% since the start of 2015, it looks like a poor period for equity markets. But if investors managed to avoid banks and miners, there’s every chance their portfolio performed well.