The 2024 year has provided a 10% gain in the ASX 200, gold was up 28% and ten-year bonds were up. Is this the end of a two-year long bull market. If so, is it the start of a Goldilocks scenario?
A Goldilocks environment is described as an ideal state for the economy, in which the economy is growing, and inflationary pressures are declining. Equity markets tend to love the Goldilocks scenario. However, that does not mean it will always be a smooth ride.
First, Trump will be back with tariffs. This will increase volatility which may lead to higher bond yields in the USA. We expect to see the Chinese government re-stimulate their economy. China property investing is down 20% from last year.
We expect to see sluggish growth in the US and Australia in the coming year. It is hard to see a big rebound, nor do we expect to see a recession currently. The Australian government has the issue of having the highest level of government debt in Australia ever. We also have property values at a high due to the large amount of immigration into the country.
Between, government spending and high interest rates Australia is in, or very close to, a recession. However, I would expect that any recession would be shallow.
The government cannot put any more stimulation into the economy, nor can they cut interest rates. The last 12 months has been good for Australian investors however I expect that returns over 2025 year will be lower.
I would not be surprised to see the market pull back in 2025, which will be an opportunity to deploy some cash holdings and pick up companies trading at a discount.
In the short term I expect the government will look to maintain the Goldilocks environment, until at least the election in 2025.
We continue to be overweight fixed interest for now. We expect that there will be opportunities to deploy these funds as opportunities arise.
I expect that the main sector moving into 2025 will be technology. AI is the fastest moving sector, the cost benefits from this technology will change everything. For investors we need to be patient until we have a winner as there will be many losses in this sector.
Over the past year we have seen an increase in scams focused on investors. Below is a list of the more common scams. If you receive a suspicious email or phone call, contact us straight away so we check it for you.
5 scams to watch out for.
- Ponzi and Pyramid Schemes: High returns, low risk? It’s probably too good to be true. These schemes rely on these empty promises and thrive by paying their existing investors with new investors’ money, not returns from genuine investment.
- Fake Crypto Investments: Beware of social media “gurus” pushing investment opportunities in cryptocurrencies or “next big thing” technologies. Scammers take advantage of crypto’s complexity, promising guaranteed returns or insider tips.
- Unlicensed Investment Brokers: These scammers pose as legitimate brokers but lack regulatory approvals, encouraging customers to invest in fake shares or managed funds. Always check credentials. Real pros are licensed.
- Superannuation Scams: Fraudsters offer to “manage” or “release” your super early, but instead, they steal your personal and financial information. Your super is sacred. Don’t let anyone “manage” it without thorough vetting.
- Phishing and Spoofing: Scammers impersonate financial institutions, asking for account details or encouraging customers to invest through fake websites. We’ll never ask for your details via email, text, or unsolicited phone calls.
If you have any questions, please contact our office.
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Jason Fittler: [email protected]
Jane Fittler: [email protected]
