Australian Equities: 2018 review

2018 was a challenging year for global sharemarkets, including Australia’s where the ASX 200 declined -6.8% over the calendar year.

The gains made in the first eight months were given up as the sharemarket fell from late August over a growing list of concerns, including, disappointing 2019 growth projections, the impact of higher US rates, the continued US-China trade war and the uncertainty caused by Brexit.

Anton Tagliaferro is the founder and investment director of Investors Mutual Ltd, a boutique, value style Australian equities fund manager. Drawing on his extensive experience with over 30 years in the finance industry, Tagliaferro observes that “in the initial stages of a sharemarket correction, it is not uncommon for almost every stock to fall as many investors rush to reduce their exposure to sharemarkets. However, when the panic subsides, and sanity prevails – which inevitably happens – good quality companies with strong underlying businesses, and with real earnings always recover well.”

Tagliaferro expects to see a period of consolidation in markets following the heavy falls of the December quarter.  He recently shared his outlook for Australian Equities:

“At the end of December, we started to see the emergence of very good value amongst many quality Industrial stocks, which our Funds are heavily skewed towards and we expect the quality of these stocks to show resilience should the sharemarket correct further.”

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Trumponomics and investment markets – Oliver’s Insights

There is plenty of debate regarding whether Donald Trump’s presidency is a positive or negative for share markets.  In his recent article, Dr. Shane Oliver looks at the risks for investors from President Trump’s approach and policies.  The key points are:

  • So far President Trump has been positive for share markets but this year the focus is increasingly shifting to populist policies with greater risk for investors.
  • The key risks to keep an eye on in this regard relate to trade conflict and the expanding US budget deficit, although the latter is more a risk for when the US economy next turns down.
  • However, the best approach for investors in relation to Trump is it to turn down the noise given the often contradictory and confusing news flow he generates.

You can read the full article here: Oliver’s Insights – Trumponomics and investment markets

Dr. Shane Oliver is Head of Investment Strategy and Economics and Chief Economist at AMP Capital.