Investment Opportunity: COVID-19 ‘Sliding Doors’ Moment for Australia

In today’s Money Morning… one of the new realities explored in the exclusive Aussie edition of Jim Rickards’ new book… this altered demographic reality will affect more than you might imagine… the missing… and more…

There’s a fairly average romcom called Sliding Doors.

In it, Gwyneth Paltrow’s character just misses her London Underground train as the doors close.

Then the film rewinds and the scene replays — except she makes it onto the train.

The rest of the movie alternates between the two realities.

COVID-19 has created a ‘Sliding Doors’ moment for Australia.

The consequences of this moment? Enormous.

But creating investment opportunities potentially very profitable for you. If you understand the new course we’ve just been thrown onto. And adjust your investments for it today.

This Sliding Doors moment… and its implications… is just one of the new realities explored in the exclusive Australian edition of Jim Rickards’ fantastic new book, The New Great Depression: Winners and Losers in a Post-Pandemic World.

(This is a pretty big deal. It doesn’t get its official Australian release until 23 March. If you’d like to learn how to access it today, go here.)

The pandemic was a fork in Australia’s road, according to Nick Hubble of Strategic Intelligence Australia. Nick has written the exclusive Bonus Chapter called Long COVID Australia: What happens next, how to prepare’.

In the blink of an eye, he says, the nation is now staring at completely different demographics. And a radically different future to the one we faced just a year ago. A future with a much smaller…much older population than where we were heading pre-COVID.

It might not have been this way.

But the train doors — and Australia’s borders — have slammed shut.

We are in a whole new reality.

And, if you believe this, the time to recalibrate your investments for it is now. That is the primary goal of The New Great Depression: Winners and Losers in a Post-Pandemic World.

The arc of our nation’s history… bending before our very eyes…

This altered demographic reality will affect more than you might imagine.

From the superannuation system to the jobs market. The number of schools we build to the taxes you’re asked to pay.

The arc of our nation’s history is bending before our very eyes — a smaller and older Australia awaits us,’ Deloitte’s Access Economics’ latest quarterly business outlook points out.

That isn’t necessarily bad, but it’s definitely big. It will reshape the nation’s future in a bunch of ways.

What ways?

And what opportunities might this present?

Nick Hubble writes:

Australia only withstood recessions during its 28-year recession-free run because of immigration. This helped goose GDP by growing the economy with more people instead of true growth via productivity. Three recessions since 1991 were masked in this way.

But the pandemic has reversed that immigration. Well, the border policy has. We will have negative net migration for the first time since World War 2 in the current financial year. More people will leave Australia than arrive.

And remember, we can’t reverse this. Not without risking another outbreak and a return to the lockdown cycle.’

The missing

Deloitte now forecasts Australia’s population is going to grow by at least 600,000 fewer than previously forecast for 2022. The Treasury has an even starker estimate of one million fewer people in two years’ time.

According to Nick, this will be our new reality for our Long COVID Decade.

The bottom line we can all agree on by now: this is not going to be a short-term thing.

The sliding doors of history have sent Australia on a new path that we’re going to be on for some time to come. The virus is not going away. And people are, very possibly, putting far too much faith in vaccines returning the world to the old reality.

As you’ll see clearly in The New Great Depression: Winners and Losers in a Post-Pandemic World, that’s just not going to happen.

Australia’s future population make-up has irrevocably altered in the space of just 12 months.

That’s insane when you really think about it.

This, from a Guardian article titled ‘Covid rewrites Australia’s future’:

If demographics is destiny, then our destiny just got a lot more challenging,” Deloitte said.

That loss of migrants will have impacts for many years; it weighs on the pace of recovery, slowing everything from housing construction to the utilities. And, combined with a slumping birthrate, it will change the outlook for school numbers.”

And it’s not just spending. Australia’s existing population includes about five million baby boomers. Younger migrants of working age have traditionally been used to boost the workforce as the older generation retires. Deloitte forecasts the absence of migrants from the labour force will “cut into longer-term growth relatively more than just the overall slowing in growth might suggest”. Deloitte predicts Australia’s net migration arrivals will shrink by 20,000 in the 2020-21 financial year and only increase by 20,000 the next.

And that, the analysts say, is the best-case scenario, based on predictions the rest of the world, not just Australia, will have a handle on the coronavirus sometime in the next year.

While the risk that countries around the world will shut their borders for an extended period of time seems to have eased somewhat, we can’t ignore the risk that further waves of the pandemic here or overseas will slow that process, and that net migration rates could remain suppressed for more than the two or three years that we currently expect,” Deloitte said.

Combined with a slump in the domestic fertility rate (a downward trend Treasury predicts will continue for the next decade), Australia is looking at a substantially older population than was forecast just a year ago. The substantial drop in migration will further compound Australia’s birthrate — fewer migrants also means fewer mothers giving birth.

That’s two-thirds of a million missing Australians,” the analysts said.

‘“The coronavirus will leave behind a huge hangover — we see an Australian economy permanently be more than 3% smaller than our pre-Covid forecasts, mostly as closed borders mean our population will be similarly smaller.”’

What is this new reality for Australia going to look like?

And how should you invest for it, starting now?

Investing can be straightforward — even in times of great uncertainty — if you can foresee the policy response to a crisis.

It also helps to be able to anticipate things that most others can’t.

That’s how you REALLY grow and preserve wealth as an investor.

This is going to be one heck of a wild card decade.

So, the value in getting things right — when others never saw it coming — is magnified.

I urge you to make the special Australian edition of The New Great Depression: Winners and Losers in a Post-Pandemic World required reading.

You can start here with the prologue.

Good investing,

Ryan Dinse Signature

Ryan Dinse,
Editor, Money Morning

Ryan is also editor of Exponential Stock Investor, a stock tipping newsletter that looks for the biggest investment opportunities on the market. For information on how to subscribe and see what Ryan’s telling his subscribers right now, click here.

Ryan Dinse is an Editor at Money Morning.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle.

Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.

Ryan's premium publications include:

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