It has been a long and warm summer in Perth. The summer sports are drawing to a close and the winter sports are about to begin.
As we prepare for the change of seasons, there has been no change for the share markets which have continued on their hot streak path from last year. The attached Economic update from MLC Investment Management highlights the strong performance of global and Australian shares in February. The Australian dollar also firmed to 90 US cents. This positive sentiment is in contrast to the mixed signals for the global and domestic economy which are affected by ongoing uncertainties.
The risk of volatility for the short-term has increased as share prices are now at or exceeding underlying valuations. There is also a risk for longer-term investment prices if growth in the global economy falls short of expectations. This optimism is not only contained to the share markets and is evident in residential property prices which are increasing due to demand from local and international investors.
In this environment it pays to be fearful when others are greedy. You should now be taking an active approach to your investment strategy to preserve your capital. The investment strategy should include the potential impact of the following:
- Slow down of growth in China
- Increase in inflation
- Decline in the Australian dollar
- Increase in interest rates
Disclaimers & Disclosures
Geoff Ivanac is Sub-Authorised Representative No. 000309751 of GPS Wealth Ltd (GPS) ABN 17 005 482 726 Australian Financial Services Licence (No 254 544) and can provide the following services financial planning, risk management, managed investments, superannuation and retirement planning, margin lending and self-managed superannuation funds.
The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your GPS Wealth Ltd (GPS) Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither GPS nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.