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Easter update from Macquarie Private Wealth

March has continued another great month against a backdrop of average data.  Bearish (negative) investors are scratching their collective heads, and wondering how a long grinding cycle (LGC) environment is so supportive of shares and property in the short and medium term?

What we are seeing – Australia:
The recent NSW election result has shown that consultative leadership can shepherd difficult and non-populist agendas, past an increasingly fickle electorate.
There is reduced, short term pressure on falling interest rates. However we believe in lower rates for longer.
Real estate and the domestic share market markets will continue to be well supported – assuming no policy changes by policy makers.
Weak demand for iron ore and commodities and a strengthening USD$.  Minimise commodities, mining and mining services exposure.
We expect the AUD$ to continue to fall toward USD$0.70.

International outlook:
Global focused investors have performed very well.  The “bull market” is intact, whilst sentiment readings are still saying it is still “uncool to be bullish equities”.
Japanese and European equities continue to quietly make gains, with comparable valuations still well below domestic and US peers.
We believe that the USD$ rally will be sustained in the medium term. This is a supportive tailwind for international investors.
When 90% of the world’s GDP (gross domestic product index) are 0%, interest rates are 0% to negative, and government debt (bond yields) are 2% or less, share markets are one of the best performing asset classes.

Portfolio strategy:
We are targeting international investment exposures – particularly in Japan and Europe.
Focus on dividend paying investments, and growth profile companies that have growing, yet defensive earnings.
Our portfolio strategies are concentrated on minimising volatility, and maximise long term, risk adjusted portfolio returns.

Thank you. Wishing you and your family a safe and Happy Easter.


Russell, Carl, Geoff, Alice and the Team

Russell Jones l Senior Wealth Adviser l CFP® Dip FS (FP)
Macquarie Private Wealth l Representative of Macquarie Equities Limited

Posted on April 2, 2015

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