Household savings, complements of the fiscal largesse of 2020-21, gave plenty of scope for spending to continue, along with wages growth and employment gains. An RBA paper last year pointed to a host of reasons that mortgagees could cope with higher rates for quite a while. Household spending growth raced ahead post COVID-19 but more recently it is softer – with a precipitous drop in consumer sentiment.
Last, the incremental contribution for fiscal spending has run its course. Committed infrastructure spending remains, but the employment growth in the public service is likely to level off or even decline.Equity generally reacts poorly to discouraging news on the economy and investors would do well to consider what to do with their portfolio construction early on.
There are two common suggestions. First, trim back equity weight, which is likely to have risen given strong markets. Second, ensure there is exposure to assets that can hold value or even rise in adverse conditions. Investment-grade credit may be a better option. The default rate in Australia is exceptionally low, and the yield is a step up from bonds. A better performance from this asset segment would be a welcome relief given the recent headwind of rising rates. is very low.There are a multitude of reasons. The loan-to-value ratios are relatively low. Further, many loans are seasoned. That is, the repayment record is established and the lender can repossess the property and realise the proceeds.
Belgique Dernières Nouvelles, Belgique Actualités
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