Economic updates

Geopolitical issues create much interest, but as we saw over the last year starting with Brexit this doesn’t mean they’ll have a big negative impact on financial markets.

Due to the GFC and solid bond returns as bond yields fell to record lows, share returns have struggled at times versus bonds over the last decade. 

The increasing noise around global economies and investment markets since the global financial crisis highlights the need for investors to have a disciplined approach to investing.

The political scandal around President Trump is likely to speed up rather than stop his pro-business reforms.

The downtrend in the $A will likely resume as commodity prices remain subdued, the interest rate differential in favour of the $A narrows to zero and goes negative and as now-long speculative positions reverse.

The 2017-18 Budget has a welcome focus on housing affordability and infrastructure.  

Due to the GFC and solid bond returns as bond yields fell to record lows, share returns have struggled at times versus bonds over the last decade. 

The RBA has left interest rates on hold. The arguments to cut or hike rates are evenly balanced and we can’t see an official rate hike until second half 2018.

The RBA has left interest rates on hold. The arguments to cut or hike rates are evenly balanced and we can’t see an official rate hike until second half 2018.

The basics of successful investing are timeless and some investors (often the best) have a knack of encapsulating these into a sentence or two that brings them to life in a way that’s easy to understand.  

Global debt levels have reached new records both in dollar terms and in relation to GDP.

The Sydney and Melbourne property markets have hotted up again and high house prices and household debt leave Australia vulnerable. But a property crash remains unlikely.  

Elections in the Netherlands, France, Germany, possibly Italy and another Catalonian referendum will keep Eurozone break up risks in the headlines this year.

A rebound in the economy in the December quarter confirms that Australia is continuing to avoid recession.

Chinese economic growth stabilised in 2016. Expect Chinese growth this year of 6.5% and inflation of 3%. Key risks regarding China relate to policy tightening, the property cycle, rapid debt growth and a trade war with the US. 

We are still a long way from the peak in the investment cycle. There is little sign of economic excess globally: underlying inflation is low; spare capacity remains; there is no sign of overinvestment; credit growth is modest; monetary conditions are not tight; share market valuations are okay; and investors are not euphoric

Donald Trump’s presidency comes with greater than normal risks. But his policy announcements should improve in quality over time and pragmatic pro-growth policies are likely to ultimately dominate populist policies.

2017 is likely to provide reasonable investment returns.  

After a year since the first Fed rate hike in this cycle, the Fed has finally moved the Fed Funds rate up again from a range of 0.25-0.5% to 0.5-0.75%. The move reflects confidence in the ongoing recovery in the US economy.

2016 started badly for investors with worries about global growth and deflation. But global growth turned out okay &, despite political events, rising bond yields & disappointing Australian growth, the end result has been a constrained but okay year for diversified investors.

Various events – starting with the upcoming Italian referendum on its Senate and elections in the Netherlands, France and Germany next year – will no doubt keep Eurozone break-up fears alive.

Many of the mistakes investors make are based on common sense rules of thumb that turn out to be wrong. As investment markets are forward looking its often wise for investors to turn common sense logic on its head.

Receding deflation fears, signs of stronger growth and increasing signs of a policy rotation away from relying on monetary policy towards fiscal stimulus (supported by Donald Trump’s election as US President) add to evidence that the 35 year rally in bonds is likely over.

Donald Trump’s election as President of the United States risks ushering in a period of policy uncertainty which could cause further share market weakness in the short term.

The smoothest outcome for investors from next Tuesday’s US election would be a Clinton victory but with the Republicans continuing to control the House of Representatives, ie, “more of the same”. However, news of the FBI’s renewed examination of Clinton’s emails means the election outcome is back to being close. 

The combination of a massive ramp up in financial information combined with our natural inclination to zoom in on negative news is making us worse investors: more fearful, more jittery, more short term. 

Expensive housing and high household debt leave Australian housing vulnerable. But without a recession or much higher interest rates a property crash is unlikely. However, the surging supply of apartments and the continuing strength of the Sydney and Melbourne property markets pose an increasing risk. 

The 8 November US Presidential election is looming as a significant event for investors (and the world) given the “policies” of Republican candidate Donald Trump. The smoothest outcome for investors would be a Clinton victory but Republicans continuing to control the House of Representatives, ie, more of the same. But the election outcome is now close.

After decent gains in shares and other growth assets since February (& Brexit) we look to have hit another rough patch on the back of concerns around the Fed, global bond yields and event risk in the months ahead. However, with most share markets offering reasonable value, global monetary conditions remaining easy and no sign of the much feared recession this is more likely to be a correction than the resumption of a bear market. 

The mostly gloomy debate around the Australian economy often gives the impression we are in a constant state of crisis.  But economic growth is pretty good, the economy has rebalanced without the (“inevitable”) recession, the worst of the mining bust looks to be behind us, public infrastructure spending is ramping up, consumer and business confidence are around long term averages, share market profits have likely bottomed and Australia stacks up well on social considerations. These are all reasons to be reasonably optimistic about the Australian economy and Australian assets.

A combination of the limitations of monetary policy, a fall in the natural rate of interest and rising inequality are contributing to a debate about how best to do monetary policy and a shift to a greater reliance on fiscal policy. For investors, this is likely to mean that the best has been seen for bond yields but that higher nominal growth could help growth assets.

Low and falling investment yields from most major asset classes point to a constrained medium term return outlook. For a diversified mix of assets, this has now fallen to around 6.9% on our projections.
For investors the key is to: have realistic return expectations; allow that inflation is also low so real returns aren’t down as much; focus on asset allocation; and focus on assets with decent & sustainable income.

Infrastructure offers attractive yield and inflation based returns, providing a relatively low correlation to shares and bonds. With ultra low bond yields and equities limited by constrained growth prospects, infrastructure, particularly on an unlisted basis, is attractive for investors looking to diversify their portfolios.

Recent developments – including the rise of populism, developments in the South China Sea and around commodity prices along with relentless technological innovation – have relevance for longer term trends likely to affect investors. So this note updates our analysis on longer term themes that will likely impact investment markets over the medium term, say the next 5-10 years. Being aware of such megatrends is critical given the short term noise that surrounds markets.

The past financial year has been rather messy for investors with another long worry list, a bear market in most share markets and record low bond yields. However, returns for diversified investors were not disastrous and followed several strong years. More importantly there are nine reasons for optimism: okay growth, easier for longer monetary policy, rising prospects for easier fiscal policy globally, we may have seen the worst of the commodity bear market, deflation risks are likely receding, the global profit slump may be close to over, share valuations are okay, investors seem to be getting used to a falling Chinese Renminbi and there is still a lot of bearishness around. So expect investment returns to remain constrained and volatile but they are likely to be reasonable.

This note takes a look at the implications of Australia’s Federal election. The Australian Federal election has delivered a messy result suggesting an even more difficult Senate for the Coalition if it is able to form government and the risk of return to minority government. The risk is that we will see a further slippage in the budget outlook – with a downgrade in Australia’s AAA sovereign rating looking increasingly likely – and that significant economic reform will remain off the agenda. This is dampener for long term economic growth and share market returns. That said, it’s not a disaster as the period of true minority government over 2010-13 saw the economy continue to grow and it’s not unusual for Australian governments to face a difficult Senate.

In a shock for financial markets which had been increasingly confident that Britain would vote to Remain in the European Union, a victory for the Leave outcome by 52% to 48% triggered an abrupt bout of “risk off” in financial markets late last week. I suspect it was probably also a shock to many Brits themselves some of whom seem to be going through a bit of Bregret (thinking they were just delivering a protest vote against the establishment and assumed that Remain would win anyway). Of course, it wasn’t a good week for Europe either. This note tries to put it all in perspective.

Y2K, Bird Flu, Peak Oil, Swine Flu, the end of the Mayan Calendar, Grexit, the fiscal cliff, US debt default, ghost cities, Ebola, Grexit again, imminent property crashes, etc…the world seems full of key events and phenomena upon which its whole existence - well at least the financial realm - supposedly hinges. Brexit seems to be the latest. In the last few weeks interest in Brexit has skyrocketed as indicated by searches on Google for the term. With this has come a surge in financial market volatility in the last two weeks. 

What do the success of Donald Trump and Bernie Sanders in the US Presidential campaign, the close Brexit vote on Britain’s membership of the European Union and the Australian election have in common? They all signal some shift towards populism and support for more left wing policies in the electorate. If this trend flows through to actual policy making it’s another reason to expect constrained medium term investment returns.

Recently I was asked where we are in the cycle of investor emotion between the extremes of “euphoria” and “depression”. This is a good question, as knowing where the investment crowd is at and being wary of it is essential to successful investing. The late 1980s Japanese bubble, the Asian miracle of the mid-1990s, US tech stocks in the late 1990s, US housing and dodgy credit in the mid 2000s and arguably the commodity boom early this decade all had one thing in common: investors had jumped on a bandwagon, resulting in assets that became overvalued, over loved and ripe for a crash. But how do crowds get into such a muddle and what are they telling us now?

Since the global growth panic in January/February share markets and commodity prices have seen a decent rebound. and the stress in credit markets has receded. This has been helped by a combination of Fed assurances that it will not be reckless and ignore global risks in determining US interest rates, somewhat better economic data in the US and China, more monetary easing in Europe and a rebalancing in the global oil market that has allowed oil prices to stabilise which has helped reduce the risk of default by energy producers. However, the big question is whether it is sustainable or just a bounce. This note looks at the main issues.

This year has seen a growing concern that central banks are out of ammo when it comes to reinvigorating global growth and preventing deflation. And the Reserve Bank of Australia’s latest rate cut has some fearing that it’s going down the same “failed path” as other major central banks. But is it really that bad? Have central banks really failed? Are they really out of ammo? 

Historically election campaigns result in a period of uncertainty which have seen weak gains on average for the Australian share market followed by a bounce once the election is out of the way. The starker choice at this election between smaller government, lower taxes and mild economic reform under the Coalition, and larger government, higher taxes and more intervention in the economy under Labor suggest greater uncertainty this time around. To maintain decent growth in living standards Australia needs to see a return to a productivity enhancing reform agenda. It’s unclear this election will deliver that.

While the iron ore price has improved, the budget deficit is now projected to be $39.9bn in 2016-17 (up from $35bn in last year’s budget). Return to surplus is still not expected until 2020-21.  Modest personal and corporate income tax cuts are largely offset by superannuation reforms & higher tobacco excise. There is insignificant fiscal stimulus. The Budget may provide a small boost to confidence. Expect minimal impact on the share market, but maybe a small boost to discretionary retail shares. 

The underperformance of Australian versus global shares since 2009 reflects a combination of tighter monetary policy, the strong $A into 2011, the slump in commodity prices, property crash phobia and classic mean reversion.  High dividend payouts are not to blame. In fact, Australia’s performance is not quite as bad once dividends are allowed for. It’s too early to say the underperformance by Australian shares is over, but some of the drivers may be waning.

The past year has seen volatility in investment markets spike higher. While fundamental drivers of volatility have fallen over time, investor sentiment has become a bigger driver. Volatility may remain elevated for a bit yet, but the key for investors is to recognise that volatility is not necessarily the same as risk and to adopt strategies to avoid being sucked into emotional responses.

A more dovish Fed, better Australian economic data, higher commodity prices and the reversal of high levels of shorts have seen the $A gain 12% from its January low. It could hit $US0.80 in the short term. However, the bounce is unlikely to be sustained with a continuation of the secular downtrend in commodity prices and a narrowing in the interest rate differential in favour of the $A likely to see the $A resume its downtrend in the months ahead. Expect a fall towards $US0.60 on a 12 month horizon.  The downtrend in the $A will help the Australian economy, but highlights the ongoing case for global investments denominated in foreign currencies.   

China’s economy is seeing an ongoing transition from manufacturing & investment to services & consumption at the same time that it is continuing to deregulate. This transition will entail slower growth than seen last decade and bouts of uncertainty. However, there is still no sign of the much feared hard landing in China. Meanwhile, the plunge in Chinese shares, particularly those listed in Hong Kong, has left them very cheap. 

Very expensive housing and high household debt leave Australian housing vulnerable. However, in the absence of either a recession or much higher interest rates a property crash looks unlikely. The Sydney and Melbourne property markets are likely to slow further this year and have another cyclical 5-10% price downswing around 2017-18. The combination of high house prices, the strong gains of the last few years in Sydney and Melbourne, low rental yields and possible changes to tax concessions around property mean investors need to be careful.

The Australian economy grew a surprisingly strong 3% through 2015, as non-mining activity and export volumes helped offset the slump in mining investment. Growth is likely to slip back to around 2.5% this year, so a further RBA rate cut is still likely, albeit it’s a close call.  Low interest rates, low petrol prices, the boost from the low $A, the improved performance of “low mining” states like NSW and Victoria and the likelihood that the slump in mining investment is getting close to the bottom are reasons not to get too gloomy on Australia and Australian assets. 

There is a seemingly long list of global political issues that could affect investors this year: the US presidential election, a vote on Brexit, the rise of populism in Europe, tensions in the South China Sea, tensions between Saudi Arabia and Iran, and an election in Australia. The bulk of these issues should turn out okay for investors, but it’s worth keeping a close eye on them.

Historically, bear markets in Australian shares have seen an average fall of 33% over 18 months. However, this masks a huge range. 65% of bear markets have seen gains over the 12 months following an initial 20% decline in share prices. Factors involved in whether bear markets are mild or deep include whether there is a recession, whether earnings slump and whether the market was overvalued or not prior to the start of the bear market. Our view remains that a recession is unlikely, that earnings growth will be soft but is not about to implode and valuations are not stretched.

The malaise in financial markets is continuing with Australian shares now joining Europe, Japan and emerging markets in a bear market. Global growth worries could drive more short term weakness. But in the absence of a US/global recession it’s hard to see a deep and long bear market. The key for investors is to recognise that periodic declines in share markets are normal, that selling after big declines just locks in a loss, that dividend income from a well-diversified portfolio is little affected by share market volatility and that income flow from Australian shares is now very high relative to bank deposits.

Assets with decent and sustainable yields are attractive in an environment of return volatility as they provide greater return certainty.Bank term deposit rates have collapsed, so it makes sense to continue to look elsewhere for income.Dividends tend to grow and be more stable than term deposits over time. The key for an investor is to work out what matters most: stability in the value of their investment or a higher/more stable income flow. 

Oil prices are down more than 70% from their levels two years ago driven by a combination of  a surge in supply relative to demand and a rise in the value of the $US. Further weakness down to $US20/barrel is possible, but we are getting closer to the point where supply slows. So far the negative impact on oil producers has predominated but ultimately it will be positive for growth.The fall in petrol prices is saving the average Australian household around $14 a week versus two years ago.

2016 should end much better than it has started off for investors, ultimately providing ok investment returns, but expect a continued volatile ride. Watch the Fed, the $US, global business conditions indicators, China and business confidence in Australia. The investment cycle still favours growth assets over cash and bonds – despite all the volatility. 

Financial markets have started the year on a rough note as last year’s worries about China and global growth in the face of US monetary tightening continue. This could drive more short term weakness. However, in the absence of US/global recession, which still seems unlikely, it’s hard to see a GFC style bear market. The key for investors is to recognise that shares offer a higher return potential after sharp falls, selling after big declines just locks in a loss and that dividend income from a well-diversified portfolio is little affected by share market volatility.

After much delay and much warning the Fed has finally raised the Fed Funds rate from a range of 0-0.25% to 0.25-0.5%. The move signals confidence in the ongoing recovery in the US economy after the GFC. Given ongoing deflationary risks and slow global growth future Fed hikes are likely to be cautious and gradual. With the Fed decision out of the way, global shares are likely to resume their rising trend but with US shares as a relative underperformer. Bond yields are likely to remain low which should be positive for real assets. Rising US interest rates will help maintain downwards pressure on the value of the $A through 2016.

 

2015 has been a messy year for investors as worries about China, emerging countries and the Fed caused volatility and uneven returns across asset classes. Australian shares continued to underperform. 2016 is likely to see continued okay but uneven global growth, low inflation & easy monetary conditions. While the US is likely to raise rates gradually, other countries including Australia remain biased to further easing.

Worries about the Fed’s first interest rate hike, which is now likely to be in December, may cause more volatility in share markets in the near term. However, there are several reasons not to be too concerned about the Fed: rate hikes will be conditional on the US economy continuing to improve and the process is likely to be gradual; history tells us it is only when monetary policy becomes tight that it becomes a major problem; other major countries are still easing; the strength of the $US will constrain the Fed; and shares outside the US are cheap indicating there are still plenty of opportunities for investors.

The more we are exposed to information about how our investments are performing, the greater the risk that we will be disappointed and at risk of making poor short term investment decisions. The greater access to information around short term investment performance and the ever present worry list around investing via traditional media and increasingly from apps on our phones is likely accentuating this risk. The key is to turn down the volume on financial news and find ways to filter it such that it doesn’t distort investment decisions.

Australian unlisted commercial property returns have been strong at 9.5-10% pa over the last six years. Soft space demand and rising supply in some areas are a constraint, but overall new office supply looks like peaking this year. More broadly, the attractive yields on offer from unlisted commercial property compared to other assets continue to point to solid returns from commercial property in the years ahead.

Global growth has been sub-par and is likely to remain so for a while yet. The same applies in Australia. This means low inflation, low interest rates, periodic growth scares and potentially a longer economic cycle. For investors, it means ongoing low returns on bank interest and constrained returns. But it’s not all bad - if growth were stronger we would return to worrying about high inflation and much higher interest rates.

Australian housing remains overvalued and this has gone hand in hand with high household debt. Against this, supply has been constrained and there has not been a deterioration in lending standards. The hot Sydney and Melbourne property markets are showing signs of cooling as APRA measures bite. Expect price falls of around 5-10% around 2017. Property investors need to be careful.

Risks regarding China and the Fed may be receding a bit for now but there remains plenty to keep an eye on including the risk of an “accident” flowing from slower emerging market growth and the plunge in commodities.  However, our broad assessment remains that the cyclical bull market in shares is likely to reassert itself in the seasonally strong months into year end. 

Investing during times of market stress and volatility can be difficult. For this reason it’s useful for investors to keep a key set of things – call them rules – in mind. The key rules, in my view, are: make the most of the power of compound interest; be aware that there is always a cycle; invest for the long term; diversify; turn down the noise; buy low and sell high; beware of the crowd at extremes; focus on investments offering a sustainable cash flow; and seek advice.

Uncertainties regarding the emerging world and specifically China and the US Federal Reserve’s much talked about first interest rate hike have continued to result in volatile share markets over the last few weeks even though most have not made new lows for this downturn.

Whenever there are sharp falls in share markets like recently, there is a temptation to wonder whether we are seeing a re-run of the last major crisis.

The Australian economy remains in a difficult period as the mining boom unwinds. Non-mining activity has bounced back but is far from strong enough to offset the headwinds coming from the mining downturn.

The turmoil in global investment markets has continued into this week, although the last few days have seen a bit of stabilisation and improvement in several markets.

Uncertainties regarding China, commodity prices, emerging countries and the Fed could see the correction in shares go further in the short term. A disappointing start to the Australian profit reporting season is also not helping Australian shares.

Through the secular bull market in shares that went from 1982 through to 2000 (or up to 2007 in Australia) most asset classes did well and so getting the asset mix right – ie the relative exposure to each of the major asset classes like shares, bonds and cash – was seen as less important and many thought that actively managing it was too hard.

As widely expected the RBA left interest rates on hold at their August Board meeting. While it appears to retain an easing bias with its assessment that growth is “below longer-term averages” and that the economy is likely to have “a degree of spare capacity for some time yet”, it appeared to soften this bias by removing its previous reference to a further fall in the $A seeming “both likely and necessary”.

Since its 2011 high, the Australian dollar has fallen 34% in value against the US dollar. For some time our view has been that it will fall to $US0.70 by year end with probably an overshoot into the $US0.60s. However, as we all know forecasting precise currency levels is a mug’s game. The key is that the direction remains down and we are likely to see a classic overshoot. This note looks at why and what it means for investors.

Despite the usual turmoil along the way and ending on a weak note with Greek and Chinese-related turmoil, 2014-15 provided another year of solid returns for investors who were prepared to move beyond cash.

It seems western commentators can always find something to worry about regarding China. Last year it was shadow banking and the property market. Lately it’s been the sharp rise and pullback in its share market. The latter has indeed been severe – with a 32% fall over 3 and a half weeks. There have been many headlines regarding the share market volatility and efforts to stabilise the market. This note looks at the key issues.

Two weeks ago it looked like Greece was heading for a deal with its creditors. Then at the last minute Greece’s Prime Minister, Alexis Tsipras, decided he didn’t like what was on offer from the Eurozone, the IMF and the ECB and called a referendum on it. This has seen Greece miss a June 30 €1.5bn payment to the IMF (which the IMF so far has called being in “arrears” albeit a declaration of “default” is likely by the end of July) and its banks shut with limits on ATM withdrawals (as Greeks have naturally been taking their money out for fear their deposits will be redenominated into a less valuable currency than the Euro) and on the verge of insolvency if something is not resolved soon.

The referendum has now been held and the No vote has won, with roughly a 60% of the vote. This note provides an update on what it means and the key things to focus on regarding Greece.
 

It’s now coming up to six years since Greece first revealed that it had understated its true level of public debt. And this is the fourth year in which it has seemingly held global financial markets to ransom as a result of its excessive public debt level.

Tax reform is a hot topic in Australia with lots of strongly-held views. There are three main reasons. First, despite the tax reforms of the 1980s, 1990s and 2000s the Australian tax system is still far from ideal. This is highlighted by the Government's Tax Discussion Paper. Second, some see tax reform as a way to plug the budget deficit; in other words tax reform is actually a euphemism for boosting the tax take. Third...

It’s part of human nature to give more weight to the short term rather than the long term. The desire for instant gratification is being accentuated by the immediacy provided by modern technology. This in turn is making it even harder to turn down the noise surrounding investment markets...

Ever since the mining boom ended around 2011/2012 there have been constant predictions of doom for Australia. Foreign commentators and investors seem to have been particularly bearish on this front. This note looks at the latest growth figures and seven reasons not to be too gloomy.

The past few weeks have seen banks tighten up lending conditions for property investors – either charging higher interest rates or imposing lower loan to valuation ratios or both. There is even talk of lenders managing their exposure by focussing on postcodes. This is all in response to increasing pressure from the banking regulator APRA (the Australian Prudential Regulation Authority) demanding that the 10% cap on property investor lending growth that it announced last December be adhered to.
 

Way back in the early 1980s it was pretty obvious that the medium term (five year) return potential from investing was pretty solid. The RBA's "cash rate" was averaging around 14%, 3 year bank term deposit rates were around 12%, 10 year bond yields were around 13.5%, property yields were running around 8-9% (both commercial and residential) and dividend yields on shares were around 6.5% in Australia and 5% globally.

After the political and economic failure of last year’s budget, this year’s Budget represents a significant change in focus for the Government. Not only was it relatively ‘boring’ with no major surprises, but the focus on dealing with a ‘budget emergency’ has been replaced with a new focus on ‘boosting jobs, growth and opportunity’ and ‘progressing budget repair in a responsible, measured and fair way’ (as if the Government now recognises that it wasn’t last year!). As a result, we are unlikely to see the big blow to confidence that last year’s fairness debate and Senate debacle caused. The danger is that the return to surplus is looking more distant than ever.
 

The last few weeks have seen the investment scene hit another rough patch: US shares have had a fall of less than 2%, but for Japanese shares it was 4%, Australian shares 6%, Eurozone shares 7% and Chinese shares 9%. This note takes a look at the key drivers, whether it’s a correction or something more serious and some of the key threats and risks investors should keep an eye on.

As widely expected, the Reserve Bank of Australia has cut the official cash rate to 2% from 2.25%. This has taken the official cash rate to its lowest level ever and will push mortgage rates down to levels not seen since the mid-1950s. 

It is now six years since the global financial crisis ended. From their 2009 lows US shares are up 212%, global shares are up 159% and Australian shares are up 91% (held back by higher interest rates, the commodity collapse & the high $A). Despite this, there seem to be constant predictions of a new disaster. This note looks at where we are in the investment cycle.

The case for the RBA resuming interest rate cuts this year has been fairly clear: commodity prices have fallen more than expected; the $A has remained relatively high; while residential construction and consumer spending are okay the outlook for business investment has deteriorated pointing to overall growth remaining sub-par; and inflation is low.

What is risk? Surely that is a stupid question as everyone knows what risk is when it comes to investing. Investopedia (www.investopedia.com) defines risk as “the chance that an investment’s actual return will be different than expected”. It’s actually quite a complex concept because it could mean different things to different people depending on their circumstances and tolerance to it. 

In some ways I find analysing China amusing. First, as long as I can recall numerous commentators have been calling for a Chinese hard landing. And for as long as I can recall they have been wrong.

Despite all the doom laden commentary regarding the Eurozone, it has not only hung together since the Eurozone crisis first erupted in 2010 but expanded from 17 members to 19. Countries want to get in not out!

Through 2013-14 it seemed the Australian economy was starting to transition away from a reliance on mining investment to more broad based growth. Unfortunately this transition has wavered a bit recently and growth has remained below trend.

Investing can be profitable as well as fun, but it can also be unnerving and unprofitable if you don’t understand markets and don’t have the right mindset. The basics of successful investing are timeless and some experts have a knack of encapsulating these in a way that’s insightful. A year ago I wrote on 21 investment quotes I find useful, here are some more.

When I started my career over thirty years ago, Australian ten year Government bonds offered a yield of around 14% and global bond yields were similarly high. The big question then was why they were so high? Now, it is why are they so low?