What’s happening for Aussie Investors

Aussie investors have had a dream run in recent years with both property and stock (shares) markets performing strongly with high returns. Why is this? It’s thanks to low interest rates, easy credit conditions, and solid economic growth.

Aussie’s who have invested in property, as reported in the ASX/Russell Investments 2018 Long Term Investing Report [1] achieved 8% in gross returns (total return on the investment before fees or expenses are deducted) each year from 2007 - 2017 which would have brought a smile to their face.

Things changed in 2018. Banks and lenders have become a lot stricter on how they lend money to Australians. This resulted in a 5% decline in capital city property markets with the largest market, Sydney, down almost 10% from last year’s highs. [2]

And overseas, a rise in interest rates in the US, and increasing costs of trade between China and the US resulted in a drop in international and local stock markets, with falls of around 10% over the past 3 months. [3]

So with the outlook on Australia’s two favourite investments - property and shares, not looking so hot right now, what should investors do? Stay the course, invest more, or run for the hills?

At Wealth Market we think about the long-term when it comes to investing. What's your end goal, and how we can help you grow your money and minimise your risk.

We help you invest your money in a ‘diversified portfolio’ which means spreading your investments over different assets like property, stocks (shares), bonds (fixed income), cash (savings accounts or term deposits) or alternative assets. That way your eggs aren’t all in one basket.

Having a diversified portfolio reduces your risk of losing money as different assets perform differently over time. For example, property and stock (shares) returns have been down in recent months, while bonds have been up. This means that someone who has invested in a diversified portfolio including both of these assets has minimised their risk of losing money, and they can use the returns they received on the bonds to invest elsewhere.

A diversified portfolio also provides the opportunity to use positive returns from assets performing well to buy investments in other assets that have declined, aka ‘buy low and sell high’ to grow your money and build wealth.

Your Wealth Market financial adviser can help you plan your investments matched to your risk comfort level and based on your goals, time frame and life situation.

If you’re interested in investing, get in touch with your financial adviser for more information.

Find out more - investing

[1] 2018 Russell Investments/ASX Long Term Investing Report https://www.asx.com.au/documents/research/russell-asx-long-term-investing-report-2018.pdf
[2] CoreLogic, November 2018, https://www.corelogic.com.au/news/australias-housing-market-records-weakest-conditions-global-financial-crisis
[3] Lonsec, iRate, Investment Outlook Report, November 2018

Disclaimer 2018: This document has been created by Wealth Market Pty Ltd (ABN 56 128 350 112, AFSL No. 482898). It provides an overview or summary only and it should not be considered a comprehensive statement on any matter. This information has been prepared without taking account of your personal objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your specific objectives, financial situation and needs.