Olivers Insight

Five key themes from 2023 Despite lots of angst at the start of the year, 2023 turned out far better than feared. Key big picture themes of relevance for investors were: Stronger than feared growth. Despite fears that recession was inevitable, on the back of multiple rate hikes and a rough reopening in China, it’s…

Introduction At its December meeting the RBA left the cash rate on hold at 4.35%. This was in line with our own view & that of most economists along with money market expectations. It followed a 13th hike at its November meeting which meant a total of 425 basis points over 19 months since May…

Introduction Changes in the value of the Australian dollar are important for Australian investors as they directly impact the value of international investments and indirectly effect the performance of domestic assets like shares via the impact on Australia’s global competitiveness. They also impact the cost of travelling overseas and import prices. But currency movements are…

Introduction There is an ever-present worry list surrounding investment markets – usually involving some combination of concerns about economic activity, inflation, profits, interest rates, politics, natural calamities, wars, etc. It makes it hard for investors to stay focussed and avoid silly mistakes. Uncertainty is magnified by perennial predictions of a crash and then periodically by…

Introduction The big surprise in the Australian housing market last year was how quickly home prices fell with RBA rate hikes. But the big surprise this year is how they rebounded when most including myself were looking for further falls. October CoreLogic data showed another 0.9% rise in national home prices, leaving them just 0.5%…

Introduction Starting in the early 1980s investment returns were spectacularly strong. Sure there were bumps along the way like the 1987 share crash, but Australian balanced growth superannuation funds returned an average 14.1% pa in nominal terms and 9.4% pa in real terms (i.e. after inflation) between 1982 and 1999. And that was after taxes…

– and how do valuations look now? Introduction It’s logical that the cheaper you buy an asset the higher its prospective return might be. However, this is frequently forgotten with investors often tempted to project recent returns into the future regardless of valuations. A valuation measure for an asset is basically a guide to whether…

Introduction For years now there has been much discussion about poor housing affordability in Australia but debate about how immigration contributes to this issue is often lacking. For a country with abundant land, it’s ironic that housing affordability is so poor. Much of the focus has been on grants and other means to make it…

Introduction At its September meeting the RBA left the cash rate on hold for the third meeting in a row at 4.1%. The pause in interest rates over the last three months comes after the biggest interest rate hiking cycle (of 400 basis points over 14 months) since the late 1980s. (While the 1988-89 rate…

Dr Shane Oliver – Head of Investment Strategy and Chief Economist, AMP “More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other to total extinction. Let us pray we have the wisdom to choose.” – Woody Allen Introduction The “news” as presented to us…