It is the time of the year where people look for predictions for the coming year. Here is what Tim Farrelly (member of the Asset Allocation Committee for Implemented Portfolios) is saying:
1. US share markets will go to all-time record highs
2. US interest rates will rise
3. Geopolitical tensions will keep investors on edge
4. The Australian economy will create a new world record for the number of consecutive years
without a recession
5. Equity markets will be more volatile than 2017
6. Australian equities will nonetheless produce positive returns for a remarkable 7th year in a
7. Australian cash rates will not rise above 2%
8. Australian residential property prices will not collapse
9. Australian commercial property will produce solid returns
10. Most active managers will struggle to beat their benchmarks.
Ok, these forecasts are fearless only in the sense that they are not very brave!
However, unlike the majority of predictions we see at this time of year, these forecasts have a very high chance of being largely correct – because they aren’t very brave. They either reflect what is already known, or are expressed so vaguely as to say very little.
Are they useless? To professional investors, yes. However, for lay people, there is some useful information here. Interest rates will go up a little but not enough to worry about, a recession is unlikely, growth assets will have their usual ups and downs but should still outperform cash. Stay the course – for now.
Here’s a little information about Tim Farrelly:
Tim Farrelly brings a unique combination of analytics, understanding of financial markets, knowledge of capital market history and insight into the practical requirements of financial advisers.
Before joining the Asset Allocation Committee of Implemented Portfolios, Tim was an Executive Director of Macquarie Bank Ltd, and Director of Macquarie Investment Management Ltd (MIML). He has an MBA (Distinction) from the Harvard Business School and a Bachelor of Engineering (Met) from the University of Melbourne, where he was awarded the J.Neill Greenwood Medal.