Invest
The investments to avoid in 2017
As the US sets off on an inflationary path, an economist has predicted that 2017 will see increasing pressure placed on two particular investments, as Australians look to re-enter the equity market.
The investments to avoid in 2017
As the US sets off on an inflationary path, an economist has predicted that 2017 will see increasing pressure placed on two particular investments, as Australians look to re-enter the equity market.
Speaking on the latest Nest Egg podcast, BetaShares chief economist David Bassanese warned investors of the sectors that would likely struggle this year amid rising bond yields
“The general theme [in 2017 will] be rising bond yields, long-term interest rates and a stronger US dollar, so that would suggest the defensive yield areas, like listed property and gold, will be under pressure,” Mr Bassanese said.
“They would be the two to be wary about under [rising rates].”
The US Federal Reserve hiked rates in March and said it anticipated it would increase rates twice more this year, and three more times in 2018, squeezing bond proxies, such as listed property, telecommunications and utilities.
“You’ve got Donald Trump [promising] fiscal stimulus, and you’ve got the US Federal Reserve raising rates so the valuations [of bond proxies] probably need to come back somewhat, so that’s one area that I think is going to maybe not do so well at the moment,” Mr Bassanese said.
“By contrast, the two big sectors of our market are financials and resources, and the good news is that they look pretty well-placed at the moment.”
This was reflected in the market as investors got out of safe defensive bond proxies and bought back into the big four banks at the end of 2016.
“The dividend yields are looking okay and particularly with the banks, who were kind of left behind during the rally over the last year or so because of the concerns about capital raising,” Mr Bassanese said.
“I think those concerns are now priced into financial evaluations with valuations of the banks, for example, less than what they have tended to be in the last few years, so relative valuations look OK there.”
Mr Bassanese said there were a few factors Australian investors should be aware of in 2017.
“In Australia, keep a watchful eye on China because China’s still stimulating its economy, keeping steel demand high, which will keep iron ore prices up and help the resource’s sector,” he said.
“The main three things [are] Trump, China, and the RBA, but bottom line is the economy’s doing OK and earnings growth is still coming through, which is going to support the equity market.”
RELATED ARTICLES
-
Trust, technology and triage: what NSW’s ‘name and shame’ signals for real estate governance
-
Vacancy is rising, demand is resilient: A case study in defending yield as Australia’s rental cycle rebalances
-
Don’t lose the deposit: A case study in stopping real estate payment fraud — and the ROI for doing it
Property
Trust, technology and triage: what NSW’s ‘name and shame’ signals for real estate governance
NSW’s latest enforcement action on real estate trust accounts isn’t a one-off embarrassment; it’s a stress test of sector governance. With licences suspended and penalties applied, the message is ...Read more
Property
Vacancy is rising, demand is resilient: A case study in defending yield as Australia’s rental cycle rebalances
After a blistering run, Australia’s rental market is loosening at the edges. Vacancy is edging up off historic lows, rent inflation is set to moderate into 2026, yet underlying demand remains ...Read more
Property
Don’t lose the deposit: A case study in stopping real estate payment fraud — and the ROI for doing it
Deposit redirection scams are quietly eroding buyer savings and agency reputations in Australia’s property market. This case study unpacks how a mid-tier real estate group redesigned its settlement ...Read more
Property
The $12m threshold: Why portfolio value, not property count, now defines Australia’s investor elite
The old yardstick of six properties as shorthand for investment success has been overtaken by a harsher reality: in today’s market, elite status is defined by balance-sheet strength, not asset countRead more
Property
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
High-stakes consumer purchases are increasingly joint decisions. When one partner is under-served, deals stall. This case study follows an Australian real estate group that rebuilt its sales motion ...Read more
Property
Selling in 2025: How to spot bad agents fast—and build an ROI-first vendor playbook
In Australia’s property market, choosing the wrong listing agent isn’t just inconvenient—it’s a textbook principal–agent failure that can wipe tens of thousands off your sale outcomeRead more
Property
Selling in 2026: How to de‑risk your agent choice and protect tens of thousands at settlement
Choosing the wrong selling agent isn’t just an inconvenience — it’s a balance‑sheet risk. In a market where digital discovery is concentrated and AI is recasting how listings are priced and promoted, ...Read more
Property
Rate resilience in Australian housing: why scarce supply is overpowering monetary tightening
Australia’s housing market is defying higher borrowing costs because the binding constraint isn’t demand—it’s supply. Brokers report persistent buyer competition and investor repositioning, while ...Read more
Property
Trust, technology and triage: what NSW’s ‘name and shame’ signals for real estate governance
NSW’s latest enforcement action on real estate trust accounts isn’t a one-off embarrassment; it’s a stress test of sector governance. With licences suspended and penalties applied, the message is ...Read more
Property
Vacancy is rising, demand is resilient: A case study in defending yield as Australia’s rental cycle rebalances
After a blistering run, Australia’s rental market is loosening at the edges. Vacancy is edging up off historic lows, rent inflation is set to moderate into 2026, yet underlying demand remains ...Read more
Property
Don’t lose the deposit: A case study in stopping real estate payment fraud — and the ROI for doing it
Deposit redirection scams are quietly eroding buyer savings and agency reputations in Australia’s property market. This case study unpacks how a mid-tier real estate group redesigned its settlement ...Read more
Property
The $12m threshold: Why portfolio value, not property count, now defines Australia’s investor elite
The old yardstick of six properties as shorthand for investment success has been overtaken by a harsher reality: in today’s market, elite status is defined by balance-sheet strength, not asset countRead more
Property
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
High-stakes consumer purchases are increasingly joint decisions. When one partner is under-served, deals stall. This case study follows an Australian real estate group that rebuilt its sales motion ...Read more
Property
Selling in 2025: How to spot bad agents fast—and build an ROI-first vendor playbook
In Australia’s property market, choosing the wrong listing agent isn’t just inconvenient—it’s a textbook principal–agent failure that can wipe tens of thousands off your sale outcomeRead more
Property
Selling in 2026: How to de‑risk your agent choice and protect tens of thousands at settlement
Choosing the wrong selling agent isn’t just an inconvenience — it’s a balance‑sheet risk. In a market where digital discovery is concentrated and AI is recasting how listings are priced and promoted, ...Read more
Property
Rate resilience in Australian housing: why scarce supply is overpowering monetary tightening
Australia’s housing market is defying higher borrowing costs because the binding constraint isn’t demand—it’s supply. Brokers report persistent buyer competition and investor repositioning, while ...Read more
