The past month has been challenging for investors, here and abroad. For those who call Australia home, our social fabric has been challenged by a bruising referendum campaign and heightened geopolitical tensions following Hamas’ attack on Israel.
Some key drivers sit behind this, and other forecasts, pointing to Australia’s continued economic outperformance.Not surprisingly, one of these is population growth. Overseas migration should continue to be a source of economic dynamism for Australia, supporting demand and providing a strong supply of skilled and unskilled workers that can help ease our labour shortages.
This argues for greater efficiency in our infrastructure and a reinvigoration of flexibility in the industrial relations sphere. Finally, the peak in policy tightening may not yet be in given still sticky inflation, and our fortunes are always somewhat tied to an uncertain global outlook.For investors, it feels like the balance for Australia still leans glass-half-full compared to other regions of the world – something that we should try to reflect in our portfolio positioning.
While the traditional tactical asset allocation approach remains important, the question is whether we live in a world that also supports more creative opportunism. The great disinflation of the past 30 years – where markets had a tendency to trend higher – has passed. Volatility is now heightened by a range of factors, from geopolitics, nationalism to inequality, that together with shifting demographics feed into inflation volatility. This, in turn, parries into interest rate volatility.
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Source: FinancialReview - 🏆 2. / 90 Read more »