Positive news for super fund investors
Investment conditions start to improve
The past 12 months or so were one of the most challenging on record for super fund investors. While no one can say we’re out of the woods just yet, there’s signs things could be turning around.
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Our new look 2008-2009 Annual Report now available
You’ll notice a big difference to this year’s Annual Report.
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What’s in store for the economy and investments...
A view from the expert
Dr Shane Oliver is AMP Capital’s Chief Economist and Head of Investment Strategy. He is one of Australia’s leading economists. With the economy showing signs of a turnaround, Shane gives his view on the future for the economy and investments…
Q. Are we starting to see signs of recovery?
Dr Shane Oliver Yes we are. The economic stimulus late last year and early this year started things rolling, with governments and central banks around the world stepping in to cut interest rates and taxes and hand money to households.
The result is that businesses are now more confident, people are investing in houses and spending money, and the economies of many countries are starting to grow again.
So the bottom line is we are moving into an economic recovery.
Q. What are the main factors driving the recovery?
Dr Shane Oliver Obviously lower interest rates and the government stimulus packages got things moving, but underneath that are other important things helping drive the recovery forward.
- People are starting to spend again. Whenever you have an economic downturn people delay buying things, such as a new car or TV. But they soon find they’ve put off their spending for as long as they can. They start to feel more confident, maybe the government gives them some money, and they go out and spend. And that’s what we’re starting to see. Car sales are up around the world and people are starting to buy houses again.
- Strength in Asia. The financial crisis had a big impact on Asia. But we’re now starting to see a rebound, led by China. This is particularly good news for Australia as China is one of our biggest customers for raw materials.
- Exports are growing. During the global financial crisis importers and exporters found it hard to borrow money to buy goods to trade. This ‘trade finance’ is starting to flow again and we’re seeing a big rebound in exports right around the world.
Q. What’s your general outlook for the economy and investments?
Dr Shane Oliver My view is that the recovery is well underway, but has a bit further to go. Normally recoveries end when inflation rises and interest rates rise to onerous levels to quash it. At the moment there’s no sign of inflation and it’s likely to be a long time before it’s a problem.
A combination of shares still well down from their highs and improving company profits, along with low interest rates and low inflation is, in my view, positive for shares and investing generally. To put this in context, the average ‘bull’ or rising market for Australian shares runs about four years and sees the market rise about 130%. So far shares are only up 45%-50% or so and we’ve only had five to six months of gains.
That said, after such strong gains, a short term ‘correction’ or fall in share prices is a risk. However, shares are not overvalued and the environment is favourable, which suggests the broader trend for shares remains up.
AMP Capital is one of the investment managers we’ve appointed to manage your super money. They manage some of the Fund’s money invested in the property and alternatives asset classes.
Want more information on the managers we’ve appointed to manage your super money?… visit our website www.auscoalsuper.com.au and click on Investment managers under the investments tab. You’ll also find investment commentary, market updates, latest crediting rates and investment returns.
Dr Shane Oliver’s story was based on information prepared by AMP Capital Investors Limited (ABN 59 001 777 591) (AFSL 232497).
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Important super news...
1. Thinking of cashing in your super early? – get advice first; 2. Do you have insurance with AUSCOAL Super?; 3. Fraud and identity theft – it’s a growing problem
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Are you invested in our Cash investment option?
There’s an important change to tell you about… and it’s for the better
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Another gong for your super fund!
The Fund’s just received the ‘Most Successful Private Business in Regional Australia’ award at the ANZ BRW Private Business Awards.
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Our 2010 Regional Visits Calendar now available on our website
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