Markets

While several weeks ago now, the threat of 75 basis point hikes is no longer in the future, it has and will likely happen more than once in 2022.

After months of fretting about soaring inflation, markets are now fully in recession-fear mode.

New research from BCA Consulting predicts Australian equities will outperform global equities over the next 10 to 15 years.

With inflation embedding itself back into the economy, the days of easy money have quickly become a thing of the past.

With both equity and traditional fixed-income investments having exhibited significantly more volatility than most expected, and unfortunately at the same time, understanding and redefining what constitutes a defensive asset is central to managing portfolios in the “new normal” of higher inflation and interest rates.

After years of benign levels of inflation, the “beast” as it is known, reared its ugly head once again in April 2021, just as the world was emerging from the pandemic.

Charlie Jamieson, co-founder and chief investment officer at Jamieson Coote Bonds (JCB)spoke recently at Praemium’s  Key Market Drivers event, blaming much of the market under-performance of 2022 on fixed-interest markets.

As quickly as the world came out of the pandemic, it was faced with yet another black swan event that caused markets to capitulate, and left supply chains in disarray.

As quickly as the world came out of the pandemic, it was faced with yet another black swan event that caused markets to capitulate, and left supply chains in disarray.

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.