Staying Flexible
Welcome to the April 2022 edition of our Quarterly Investment Report.
We have included a short video with Daryl Wilson, one of our Advisory Board members. Daryl is the CEO and Portfolio Manager of Affluence Funds Management, with over 25yrs experience across financial markets, including CFO of Cromwell Property Group.
Summary of our latest insights
- The near-term direction of markets has multiple uncertainties – War, Inflation, Interest Rates and China growth.
- Our tug-o-war analogy from the last quarterly report is playing out, growth versus inflation.
- It is reasonable to expect a bumpy road over the coming months as markets recalibrate to the evolving environment, therefore, we have taken a defensive tilt across our asset allocation preferences.
- In such environments, it is a balancing act between defence and offence. Taking profits from Alternatives and increasing Cash provides this balance by increasing liquidity and flexibility.
- The chances of a global recession over the next 12 months are very low (U.S. led) given tight labour market conditions and high household savings. There has never been a U.S. recession without a significant spike in jobless claims.
- We will consider an overweight position to Australian Equities upon sustained weakness in prices. Corporate earnings continue to be resilient to numerous headwinds.
- Australia is well placed to navigate this uncertain period, being a relative beneficiary of higher commodity prices that eventually flow through to the broader economy.
- Leading into 2023, we see the potential for better returns as the uncertainty clears, global growth remains above trend, and resilient earnings swing back into focus.
More detail on our views and latest positioning can be found here.
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