A very quick market update:
- Inflation seems to be coming under control, although we have some way to go. The cost of living is likely to continue to increase at above average levels in 2024 before hopefully stabilising in 2025.
- The Australian share market continues to track sideways this year. However, most large Australian shares pay dividends, which means there’s always a 4-5% return on offer even when markets go sideways.
- US markets have rallied strongly in November and appear to be very optimistic about the future and inflation. These markets are trading at near all-time highs. This is a little concerning and limits potential future returns.
- Residential property markets have returned to their peak levels after declining in 2022. I think the future of property prices is an interesting debate, given we have long term supply issues combined with very stretched affordability. 2024 should provide a better indication of where property prices are headed.
- Defensive investments like high quality bonds (debt) look attractive right now with interest rates appearing close to their peak.
The Fear and Greed Index
The fear and greed index measures the ‘mood’ of share market investors in the world’s largest market, the USA. Share markets are volatile and moods change quickly. If you look at the index you can see investment markets currently appear to be quite optimistic (Greed) with US markets up an impressive 8% in November alone. Yet just one month ago the index was in the ‘fear zone’. You can view the index on the link below:
https://edition.cnn.com/markets/fear-and-greed
