Oliver's Insights – Just how worrying is the 'worry list' for investors?
This note looks at the list of worries being thrown up by commentators and investors in relation to the outlook for shares and other growth assets.
The key points are as follows:
- There is a long ‘worry list’ being thrown up in regards to the outlook for shares and other growth oriented assets including indebted consumers and weak credit availability, the blow out in budget deficits, an inflation blow out on the back of central banks pumping money into their economies, a double dip recession, a US$ crash, worrying demographic trends and fears that shares are now expensive after their recent rally.
- While most of these issues cannot be ignored, and some will likely constrain returns over the medium term in mainstream global equity markets such as the US, they are not as worrying as they appear. They are not enough to prevent solid gains in shares over they year ahead.