Markets

In a recent blog post, Joseph Koh, portfolio manager of the Schroder’s Australian Equities Long-Short strategy, compared the current market environment to the Four Horsemen of the apocalypse.

According to Morningstar, an Australian recession is possible but highly unlikely. It thinks the Australian economy is “in great shape,” with low unemployment and high real GDP recorded in the March 2022 quarter.

. The confluence of events, which has seen the traditional negative correlation between long duration bonds and equities quickly turn positive, has had a significant impact on investment returns.

There has been no better time to buy Gold than now and that’s due to several reasons.

2022 has been a torrid year for both bond and equity markets, but particularly those outside Australia. Following Friday’s weak close, the S&P500 is now down close to 19 per cent for the calendar year to date and the US government bond index is down around 13 per cent.

“Recession? Who knows? We’re not bearish, especially with our value style of investing. It’s bit of war like scenario. After the war’s over, we get inflation and that’s what we’re in.

Recent market events have shaken us all and, although the long-term investment outlook for emerging market equities remains positive, we thought it pertinent to revise our outlook in the shorter term.

Following the Reserve Bank of Australia’s decision to increase the cash rate by 50 basis point this month, the big banks have quickly raised interest rates on their mortgages, as well as interest rates on some savings accounts.

The Reserve Bank’s decision to hike interest rates by more than 50 basis points, double that predicted by the majority of economists “changes the journey, not the destination,” according to Charlie Jamieson of Jamieson Coote Bonds.

Too much volatility and an uncertain regulatory outlook are the most common reasons for people to avoid Bitcoin, though Australia ranks higher than the UK, Italy, Germany, Canada and France in terms of optimism about the cryptocurrency, according to the 2022 Block Bitcoin Survey.

China is a little ahead of the US in the current re-pricing of global equities. That, coupled with western geopolitical concerns, has presented a new round of opportunities.

The Australian Taxation Office has warned people not to make the mistake of double-dipping their deductions in their tax return this year after identifying this as a common problem, especially in relation to work-related expenses.