Australians, individually and collectively, have bet everything on housing. And every year, we double down on that bet. There’s no certainty that 2018 will be the year our housing gamble goes bust. But it would be madness to be certain that it can’t. Aussie property investors in Australia could be in for a rough year.
Just because rates have been at records lows doesn’t mean they can’t go any lower. For one, there’s the Aussie property market to think about. However, by looking at what the big banks are doing, we can glean what the RBA is likely to do in the future.
Over the past three years, we’ve seen brand after brand crumble — without even mentioning retailers in receivership. 2018 may be the year that Aussie retail finally falls flat on its face. But there’s enough evidence to suggest that it tripped over a long time ago.
The Aussie dollar is getting a boost from stronger commodity prices. Recent price rises have helped push the dollar higher. The Aussie dollar has had a strong start to the year. However, it may be more cyclical than anything to do with the underlying strength in the Aussie dollar.
I’m all for tax cuts, but personal tax cuts are what needs to be on the table. And the issue of fairness needs to be addressed too. Society can’t function when the only people paying tax are honest middle-class workers.
While I was bullish at the start of 2017, I’m not as bullish now based on fundamental factors. But I want to stress that I’m not expecting a market collapse. I think you’ll see stocks fluctuate a lot more in 2018 than they did in 2017.
In today’s piece, from 16 November, Ryan explains what ancient Chinese proverbs have to teach the modern investor. He looks at why interest rates are inevitably headed up in 2018, and both the good and bad things that could mean for your investments.
As long as the big four can comfortably maintain their positions at the heart of Australian finance, it’s unlikely to change. There’s little competition for the big four, outside one another. But that comfortable position may not be as secure as they think.
Shares of listed café and bakery company, Retail Food Group Ltd [ASX:RFG], have fallen more than 20% today, as negative media attention is influencing customers and store owners to move towards other companies.
The difference between US and Aussie companies and investors can be broken down as simple as this. The US is more strategic, whereas the Aussie market has a much greater focus on value. I do think US stocks are stretched and vulnerable to a short term correction. And as I said yesterday, that correction could come about as soon as the US tax cut rumour becomes fact.