Invest
Will the federal election hit your investment portfolio?
One week out from the polls, with two major parties peddling two very different agendas that can have a profound effect on the Australian markets.
Will the federal election hit your investment portfolio?
One week out from the polls, with two major parties peddling two very different agendas that can have a profound effect on the Australian markets.
Share market
While the short-term volatility being caused by different political ideology could dampen growth, AMP believes that in the long term, it is unlikely to lead any major disruptions to the Australian economy.
AMP’s chief economist, Shane Oliver, believes that overall the election won’t have a huge swing on the markets, given the extremes of policies are not matched to those overseas.
“Historically, if you look at election campaigns, there is a tendency for the sharemarket to track sideways due to the uncertainty, and once the election is out of the way, you tend to see a bit of a rally.
“That’s not always been the case, and it has not always gone the way you’d expect. This time around, it has been a little bit different, with the Australian sharemarket pushing higher on the back of global developments,” Mr Oliver said.
The Aussie dollar
While investors’ share portfolio continues to rise, the Australian dollar has fallen throughout the campaign.
Mr Oliver believes this fall is also due to global developments and uncertainty around the Australian cash rate.
“Likewise, for the Aussie dollar, it has actually weakened through the election campaign again mainly on the back of global developments also interest rates in Australia,” Mr Oliver said.
The long game
The main difference depends on who wins next week’s federal election.
Mr Oliver believes if the Coalition wins, it will be back to business as usual, with the economy continuing on its previous course before the election was called.
If Labor wins, Mr Oliver believes it will all depend on what changes are made and how they spend new monies.
“If Labor won, I think you’ll see a bit of uncertainty particularly around taxation because Labor has policies to increase the top margin tax rate. They want to wind back capital gains, negative gearing and remove franking credits and crack down a bit on income paid by trusts and some changes around superannuation,” Mr Oliver said.
At the end of the day, it comes down to how Labor spends that money. If they spend it wisely, it could have a positive impact. There’s also a tendency for Labor to act quickly during a crisis. We saw that at the time of the GFC and through the 1980s,” Mr Oliver said.
This email address is being protected from spambots. You need JavaScript enabled to view it.
About the author
About the author
Stock market
Beware the reversal of the sharemarket rally, expert says
The companies that offer the greatest risk for investors in 2021 are somewhat ironically many of the same companies that have provided the greatest return to investors in 2020, an expert has warned. ...Read more
Stock market
Is climate change the next big investment theme?
Investors looking to outperform the market are being urged to look at structural growth, with climate change likely to create the biggest investment opportunity since the internet, an industry expert ...Read more
Stock market
All Ords set for new record by February, analyst predicts
The Australian market is likely to reach a new record in the early months of the year, with a win on the health front likely to offset geopolitical issues, an analyst has stated. ...Read more
Stock market
Aussies flock to fixed interest and ETP products for stable returns
Investors seeking stability during the COVID-19 pandemic have turned to fixed interest and cash exchange-traded products, new research has revealed. ...Read more
Stock market
Emerging market equities gain traction in post-pandemic world
Emerging market equities are making a comeback as technology-savvy consumers flock to capitalise on new opportunities that the 2020 pandemic may have made too attractive to ignore. ...Read more
Stock market
Is it too late to start investing in market index ETFs?
With the Australian market recovering its losses since the pandemic began, nestegg asked an industry expert if it was too late for investors to begin their investing journey. ...Read more
Stock market
Is it time to buy reopening stocks?
Investors are being advised to look into stocks that could benefit from markets reopening, an analyst has stated. ...Read more
Stock market
Stocks to watch in 2021
Easing political uncertainty, new vaccine hopes, central bank’s willingness to do all it takes and more, and new stimulus packages are likely to act as tailwinds for investors, an analyst has said. ...Read more
Stock market
Beware the reversal of the sharemarket rally, expert says
The companies that offer the greatest risk for investors in 2021 are somewhat ironically many of the same companies that have provided the greatest return to investors in 2020, an expert has warned. ...Read more
Stock market
Is climate change the next big investment theme?
Investors looking to outperform the market are being urged to look at structural growth, with climate change likely to create the biggest investment opportunity since the internet, an industry expert ...Read more
Stock market
All Ords set for new record by February, analyst predicts
The Australian market is likely to reach a new record in the early months of the year, with a win on the health front likely to offset geopolitical issues, an analyst has stated. ...Read more
Stock market
Aussies flock to fixed interest and ETP products for stable returns
Investors seeking stability during the COVID-19 pandemic have turned to fixed interest and cash exchange-traded products, new research has revealed. ...Read more
Stock market
Emerging market equities gain traction in post-pandemic world
Emerging market equities are making a comeback as technology-savvy consumers flock to capitalise on new opportunities that the 2020 pandemic may have made too attractive to ignore. ...Read more
Stock market
Is it too late to start investing in market index ETFs?
With the Australian market recovering its losses since the pandemic began, nestegg asked an industry expert if it was too late for investors to begin their investing journey. ...Read more
Stock market
Is it time to buy reopening stocks?
Investors are being advised to look into stocks that could benefit from markets reopening, an analyst has stated. ...Read more
Stock market
Stocks to watch in 2021
Easing political uncertainty, new vaccine hopes, central bank’s willingness to do all it takes and more, and new stimulus packages are likely to act as tailwinds for investors, an analyst has said. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
