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Shane Oliver
Italy Is A Worry - But 3 Reasons Not To Be Concerned About An Itexit
Added On - 5/25/2018 8:52:16 AM
I must admit that while I wasn't worried about last year's Eurozone elections the risks around Italy are greater. But a break up of the Euro triggered by Italy still looks very unlikely. And in the meantime, Eurozone shares remain attractive. This note looks at the main issues.
An Additional 21 Great Investment Quotes
Added On - 5/18/2018 2:39:52 PM
Investing can be frustrating and depressing at times, particularly if you don't understand how markets work and don't have the right mindset. The good news is that the basics of investing are timeless, and some have a knack of encapsulating these in a sentence or two that is both insightful and easy to understand. In recent years I've written insights highlighting investment quotes that I find particularly useful. Here are some more.
Olivers Insights: The 2018-19 Australian Budget
Added On - 5/11/2018 1:10:12 PM
The 2018-19 contains a small welcome boost to households and keeps the budget on track for a surplus. The main risk is that the revenue boost seen this year is not sustained & the budget continues to have relatively optimistic assumptions regarding revenue growth.
Interest Rates On Hold Until 2020
Added On - 5/3/2018 1:18:41 AM
A rate hike is now unlikely until 2020: as growth is likely to remain weaker than the RBA expects; wages growth and inflation are likely to remain low for longer; bank lending standards are tightening further, and; house prices in Sydney and Melbourne are falling with more downside ahead.
US China Trade War Fears - Q & A
Added On - 4/13/2018 11:32:27 AM
President Trump's actions on trade are mainly aimed at achieving better access for US exports to China and better treatment of US intellectual property by China. They are not primarily aimed at traditional US allies, reducing the risk of a global trade war.
Share Market Volatility - Trump & Trade War Risks
Added On - 3/27/2018 12:49:05 PM
Worries about the Fed, trade wars (the risk of which has been significantly exaggerated) and President Trump generally have increased the risk around the global outlook but are unlikely to drive a major bear market.
Where Are We In The Unlisted Commercial Property Cycle?
Added On - 3/23/2018 1:45:39 PM
Commercial property yields still offer a strong premium relative to bonds suggesting we are a long way from a major cyclical downturn. Key to watch will be how quickly bond yields rise and the state of the economy.
The Australian Economy - Five Reasons Growth Will Continue
Added On - 3/9/2018 10:59:51 AM
We don't expect the RBA to start raising rates until 2019 (we were looking for a hike late this year). Australian shares are likely to move higher by year end, but to continue underperforming global shares.
What Is The Risk Of A US Recession?
Added On - 2/23/2018 11:14:36 AM
With inflationary pressures starting to rise in the US the global investment cycle is starting to get more mature. This is likely to mean a further rise in bond yields and more share market volatility.
Australian's Love Affair With Debt - How Big Is The Risk?
Added On - 2/16/2018 12:28:48 PM
The rise is not as bad as it looks because its been matched by rising wealth and debt servicing problems are low. However, this could change as interest rates rise and if home prices fall sharply.
The Pullback In Shares - Seven Reasons Not To Be Too Concerned
Added On - 2/9/2018 3:03:41 PM
The current pullback in shares has been triggered by worries around US inflation, the Fed and rising bond yields but made worse by an unwinding of bets that volatility would continue to fall.
Correction Time For Shares?
Added On - 2/5/2018 12:55:47 PM
The US share market is long overdue a decent correction. This now appears to be unfolding and may have further to go as higher inflation, a slightly more aggressive Fed and higher bond yields are factored in.
Higher Global Inflation & Higher Bond Yields
Added On - 2/2/2018 1:27:49 PM
Rising global growth and rising commodity prices indicate the risks to inflation are gradually moving to the upside. This is most acute in the US with the Fed likely to raise rates more than the market expects this year.
2018 - A List Of Lists Regarding The Macro Investment Outlook
Added On - 1/25/2018 2:18:20 PM
2018 is likely to remain good for diversified investors. The investment cycle still favours growth assets over cash and bonds. But expect more volatile and constrained returns as US inflation starts to turn up.
The Fed Hikes Again
Added On - 12/19/2017 10:39:53 AM
The Fed has raised interest rates for the fifth time since first raising rates this cycle two years ago, taking the Fed Funds rate from a range of 1.0-1.25% to 1.25-1.5%. This reflects the ongoing strength of the US economy.
Review Of 2017, Outlook For 2018 - Still In The 'Sweet Spot', But Expect More Volatility Ahead
Added On - 12/12/2017 12:27:38 PM
By the standards of recent years, 2017 was relatively quiet. Sure there was the usual 'worry list' - about Trump, elections in Europe, China as always, North Korea and the perennial property crash in Australia.
Why Cautious Optimism Is Better For Your Investment Health Than Perma Pessimism
Added On - 12/4/2017 10:37:37 AM
Getting too hung up in permanent pessimism on the next financial crisis and when it will come and what will on the basis of history inevitably drive the market down in the two or three years out of ten may mean missing out on the years it rises.
Is Australia's Economy "Built On Shaky Foundations" That Are "About To Collapse"?
Added On - 11/27/2017 12:56:54 PM
I don't normally comment directly on articles by others but an article by Matt Barrie with Craig Tindale called "Australia's economy is built on shaky foundations, and it's about to collapse," has been sent to me several times for comment so I thought I would make an exception this time.
Bubbles, Busts, Investor Psychology..& Bitcoin
Added On - 11/22/2017 1:08:08 PM
Investment markets are driven by more than just fundamentals. Investor psychology plays a huge role and along with crowd psychology helps explain why asset prices go through periodic bubbles and busts.
The Medium Term Investment Return Remains Constrained
Added On - 11/9/2017 12:35:39 PM
For investors the key remains 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.
Five Great Charts On Investing For Income
Added On - 10/27/2017 10:39:18 AM
This note looks at five charts I find useful in understanding investing for income or yield.
What's The Risk Of A 1987 Style Crash?
Added On - 10/24/2017 6:13:59 PM
There is still little sign of the sort of excesses that precede major economic downturns and major bear markets suggesting that (although US shares are overdue a decent correction) we are still a fair way from the top in the investment cycle.
House Prices Crash? 5 Reasons Why It's More Complicated Than You Think!
Added On - 10/13/2017 11:51:33 AM
Talk of a property crash is likely to ramp up again with signs that the Sydney and Melbourne property markets are cooling. But the Australian property market is a lot more complicated than the crash calls suggest.
The US Fed Starts Quantitative Tightening
Added On - 10/5/2017 12:03:50 PM
The Fed has confirmed it will start reducing its balance sheet by not reinvesting bonds up to set limits as they mature. This amounts to quantitative tightening as it will start to reverse some of the quantitative easing that occurred during and after the Global Financial Crisis.
Where Are We In The Search For Yield?
Added On - 9/29/2017 10:52:00 AM
It's hard to argue that the search for yield has gone too far given how low bond yields are. A range of assets still provide much better yields than cash and bonds.
Another Five Great Charts On Investing
Added On - 9/12/2017 11:01:09 AM
Here are another five great charts that help illuminate key aspects of investing: the importance of time in the market relative to timing; the case to look at your investments less; the relationship between risk and return; the importance of diversification; and the role of property.
Five Reasons Why Some Further Pick Up Is Likely
Added On - 9/8/2017 11:42:42 AM
There is good reason to expect growth to pick up further going forward: the drag from mining investment is fading, non-mining investment is looking better, public investment is strong, trade is adding to growth and profits are rising again. But growth is likely to be constrained around 2.5-3% and underlying inflation is likely to remain low.
Key Themes From Earnings Season
Added On - 9/4/2017 7:29:10 AM
The June half earnings reporting season in Australia is now done. The good news is that profits and dividends are up with 67% of companies reporting higher profits than a year ago and 64% increasing dividends from a year ago which is a good sign regarding the quality of earnings.
The Global Financial Crisis 10 Years On
Added On - 8/25/2017 10:23:05 AM
The key lessons for investors from the Global Financial Crisis (GFC) are that: high returns come with higher risk; while each boom bust cycle is different, markets are pushed to extremes of valuation and sentiment; be sceptical of financial engineering or hard-to-understand products; avoid too much gearing or gearing of the wrong sort; and monetary and fiscal policy work.
The Threat Of War With North Korea
Added On - 8/16/2017 11:00:55 AM
Historically, shares have been adversely affected initially on the uncertainty of wars (or threatened wars) with a potential significant economic impact, but have tended to rally well before the conflict is over.
Inequality - Is It Increasing? Investor Implications
Added On - 8/11/2017 12:48:06 PM
Inequality is an issue we have looked at before in terms of driving a swing to the left amongst median voters in Anglo countries and contributing to a backlash against economic rationalist policies but this note takes a more detailed look at the economic and investment implications.
Five Great Charts On Investing
Added On - 8/1/2017 12:39:14 PM
These five great charts help illuminate key aspects of investing: the power of compound interest; the investment cycle; the roller coaster of investor emotion; the wall of worry; and time is on your side when investing.
5 Reasons Why Returns Are Likely To Be Solid In 2017-18
Added On - 7/19/2017 1:43:39 PM
Despite a lengthy list of worries including Brexit, Trump and messy Australian growth, the past financial year saw strong returns for diversified investors as shares recovered from a rough time in 2015-16.
Turbulence Hits Markets: 3 Reasons Not To Be Fussed
Added On - 7/7/2017 1:36:47 PM
Central banks beyond the US are edging towards an exit from easy money. This is likely to cause bouts of volatility in shares and a rising trend in bond yields.
A Year On From Brexit - What Have We Learned?
Added On - 6/22/2017 11:27:42 AM
It's now 12 months since the British voted to leave the European Union, an event that some saw as setting off a domino effect of other European countries looking to do the same.
The Australian Economy Hits Another Rough Patch
Added On - 6/16/2017 1:42:15 PM
Despite numerous forecasts for an 'unavoidable' recession following the end of the mining boom early this decade, the Australian economy has continued to defy the doomsters and keep growing. However, recently it seems to have hit a bit of a rough patch.
The Perils Of Forecasting
Added On - 6/2/2017 2:58:15 PM
It is always tempting to believe that you or someone else can perfectly forecast the market. However, as Ringo Starr said 'it don't come easy'!
The Trump Bump & Shares
Added On - 5/25/2017 1:23:34 PM
It's now six months since Donald Trump was elected President of the US and four months since he was inaugurated. In many ways, it has gone better than feared.
3 Reasons Why The Risks For The A$ Are Still On The Downside
Added On - 5/18/2017 12:42:42 PM
Given the downside risks for the $A it makes sense for Australian investors to maintain a decent exposure to foreign currency via unhedged global investments.
Budget 2017 - Pragmatism & Fairness Rule
Added On - 5/12/2017 12:53:26 PM
The 2017-18 Budget has much to make it popular. In fact, the goodies make it almost feel like a pre-election rather than a post-election budget. The transformation from the austerity to end 'the age of entitlement' of the 2014 budget to the 'fairness, security and opportunity' of this Budget has been profound.
Are Shares Offering A Premium Over Bonds?
Added On - 5/5/2017 12:39:20 PM
It is often thought that shares should return more than 5% per annum (pa) over bonds, because this is what their excess return has averaged over much of the post war period, but this likely exaggerates the required excess return for shares.
Global Growth Looking Healthier
Added On - 4/28/2017 1:32:48 PM
Stronger global growth is positive for Australia and supports the case for the RBA to remain on hold. But with underlying inflationary pressures remaining very low and underemployment very high a rate hike is unlikely until second-half next year.
Macron To Face Le Pen In French Run-Off Election
Added On - 4/24/2017 3:08:04 PM
As suggested by opinion polls the centrist pro Euro candidate Emmanuel Macron will face far right anti Euro National Front candidate Marine Le Pen in the May 7 run-off vote for President of France.
Bank Rates, Home Prices & Implications For Investors
Added On - 4/7/2017 3:15:24 PM
For investors: bank term deposits offer poor returns; remain wary of the $A; and shares, commercial property and infrastructure continue to offer attractive yields.
A Further 21 Great Investment Quotes
Added On - 3/30/2017 1:04:41 PM
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.
The $US200 Trillion Global Debt Mountain
Added On - 3/24/2017 3:32:56 PM
History tells us that the next major crisis will involve debt problems of some sort. But just because global debt is at record levels and that global bond yields have moved higher does not mean a crisis is imminent.
Australian Housing - What Are The Key Issues?
Added On - 3/17/2017 12:51:28 PM
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.
Eurozone - Will They Or Won't They Break Up?
Added On - 3/10/2017 1:25:37 PM
Elections in the Netherlands, France, Germany, possibly Italy and another Catalonian referendum will keep Eurozone break up risks in the headlines this year.
The Australian Economy & Profits - 7 Reasons To Be Upbeat
Added On - 3/3/2017 1:14:26 PM
A rebound in the economy in the December quarter confirms that Australia is continuing to avoid recession.
The Chinese Economy Stabilises & Iron Ore Surges
Added On - 2/17/2017 12:55:11 PM
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. All of these should be manageable.
 

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