As has been the case for the past 4 years, market volatility makes decisions around asset allocation extremely difficult. For the short term it is difficult to imagine strong growth from share markets despite attractive valuations and higher than average dividend yields.
Macro economic news, particularly from Europe and China, is dominating investor’s psyche and as a result attitudes to risk are changing on a daily basis.
In a falling interest rate and uncertain economic environment we believe that Australian government and semi government bonds will continue to perform well in the near term. We access these investments via the Australian Fixed Interest fund.
With a slightly longer view lower interest rates create investment capacity and will eventually coerce investors to once again seek returns through growth assets such as shares and property which will prove supportive for these asset classes. Our view is that this scenario will begin to play out over the next 6-12 months and we are well positioned to take advantage of these opportunities as they arise.
As always it is a pleasure to provide you with our insight and should any issues require further clarity please feel free to contact the office.
