Oliver's Insights - AMP Capital 18 Jul 2017
2016-17 saw strong returns for diversified investors - here are five reasons why returns are likely to be solid in 2017-18.
Article by Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital.
The following note reviews the investment returns seen over the last financial year and looks at the outlook for the current financial year.
The key points are as follows:
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- 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 and real assets like unlisted commercial property and infrastructure continued to see strong returns.
- Key lessons for investors from the last financial year include: turn down the noise around financial markets, maintain a well-diversified portfolio; be cautious of the crowd; and cash continues to be a poor generator of returns.
- Returns are likely to slow this financial year but remain solid. Global growth is good, this should underpin profit growth, there are minimal signs of broad-based economic excess that point to a peak in the global growth cycle, global monetary policy is likely to remain relatively easy despite a gradual tightening and share valuations are not excessive.