Morning Report Tuesday 15 September 2015
Australians are waking up to Malcom Turnbull as their 5th prime minister in just over 5 years! Frankly a ridiculous situation and certainly not a stable nor professional picture for overseas investors.
As our politicians commence a fresh chapter investors have to decide if they should be considering any changes in investment direction. The balance between equities and property feels like it may have reached another inflexion point.
The Self-Managed Super (SMSF’s) army poured into Australian banking shares earlier this year, chasing yield without thought to capital risks; local banks have since fallen around 25% - see chart 1.
Over recent years SMSF’s have been aggressively buying property, usually on a leveraged basis, and renting them out with the expectation of capital gain and investment yield. BUT rents are now falling!
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