The world market gyrates today into the negative, given the headline that economic growth is projected to be slower than anticipated. But for the equity investor, the last two years have been dismal. Especially when one looks at the leading indices in inflation adjusted terms.
Central banks in the developed world are in a race to the bottom, devaluing their currencies, in an effort to stave off the deflationary effects of a recession, and to regain some industrial competitiveness in the world economy. But not Australia, somehow we are proud of our strong dollar. Commodities have been where all this newly minted hot money has found a temporary home. Billions of investment dollars have landed on these shores to secure untapped coal, gas and iron ore in Queensland and Western Australia.
So why then has the All Ords gone nowhere. Even with a strong Aussie dollar, and core inflation at a record low, the ASX All Ords can't keep its nose above 5000 for anything more than a day or two
Because its impossible to find a good industrial, retail or financial that is thriving on the international stage. Simply put, the Aussie dollar is killing everything EXCEPT mining.
Retailers are hurting, because the strong Aussie buys more on Amazon then it does here. Any business who exports, is looking to offshore their operations. And banks are the first to show the cracks, with some negative price figures in our housing market.
Investing on the ASX is a risky business now, speculative punts, while hedging on safe utilities, may be your gain on what is a turbulent era for the investor.
No comments:
Post a Comment