Invest
Market risks on the map this week, but investors told to weather the challenge
Invest
Market risks on the map this week, but investors told to weather the challenge
Australian investors have been urged to remain positive and avoid reactionary responses to macro level global events, as market volatility continues to affect the markets.
Market risks on the map this week, but investors told to weather the challenge
Australian investors have been urged to remain positive and avoid reactionary responses to macro level global events, as market volatility continues to affect the markets.

As we begin another drama-filled week on the global stage, a leading Australian investment manager has encouraged investors to stay optimistic as market driving forces will more likely move to avert risk rather than allow for recession.
Jamie Nicol, chief investment officer at DNR Capital, says the market has been too fast to price in a US recession as the Federal Reserve is unlikely to sit on its hands in the face of economic downturn.
“Looking forward, the market has priced a potential slowdown very quickly despite a number of indicators remaining positive, such as manufacturing data and capex expectations. It is not a fait accompli that the US Federal Reserve will sit back while the US market rolls into a recession.”
Macro-events to look to this week

Despite tensions ramping up between the US and China over the detainment of Huawei CFO Meng Wanzhou and the potential of a hard Brexit confronted this Wednesday, he said it was important for investors to consider the range of outcomes as the market forces will likely seek to avoid risk.
“Considering what can break the current cycle of risk aversion, we look at a range of possibilities,” he said.
“Firstly, the US Federal Reserve chief has suggested US interest rates are near neutral, which suggests the pace of change will ease – a pause in interest rate rises would ease fears of further tightening.
“Secondly, the US and China have agreed to a cease fire in the trade wars, which provides some further breathing space for China and emerging markets. Further progress on this agreement would also be helpful.
“Thirdly, while challenging, resolution of Brexit would provide additional certainty.
“And lastly, the RBA deputy governor last week flagged for the first time the potential for rate cuts in Australia.
Market forces will move to avoid risk
“While these only remain possibilities at this stage, it is important, when the market is becoming very risk averse, to avoid seeking out the bad news (which the market is inclined to do in this environment).”
He said that although valuations have been high of late, pullback in the market has somewhat alleviated this risk, while bearish investor sentiment should be taken as a good sign that recession is not on the horizon.
“While we think the market has been quick to price in a recessionary risk despite mixed evidence, valuations have been high this cycle (driven up by low interest rates) and justified a de-rating,” he said.
“Following the pullback, valuations are more reasonable especially when compared to interest rates and bond yields. Earnings growth expectations in Australia appear modest with some small downside risk if housing deteriorates further (an RBA cut would be helpful).”
“Also following the pullback in the market, sentiment seems reasonably bearish or cautious — generally a positive indicator, albeit there has not been outright panic.”

Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more

Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more

Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more

Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more

Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more

Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more

Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more

Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more

Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more

Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more

Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more

Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more

Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more

Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more

Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more

Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more