The Aussie Dollar to fall further
Interest rates to stay on hold initially then perhaps increase later in the year.
Australian economy to grow by 3 %
China to grow by 6.5%
Europe to grow by 2%
The US to grow by 2%
An international horse to win the Melbourne Cup
Barcelona to win the UEFA Champions League
In relation to the Australian share market I expect a positive year for shares. The reasons for this are as follows:
- There will be a partial recovery in commodity prices, particularly iron ore and coal
- Oil prices should also rise due to ordered cuts in production these will all improve our terms of trade and support income growth
- Interest rates will continue to remain low
- There will be further growth in residential construction and growth in public investment
- A decline in household saving will trigger an increase in consumption
- Downward pressure on the Aussie dollar and upward pressure on the $US will help our exporters and provide growth in international share funds. It will also provide a boost to tourism education and financial services.
All these factors combined suggest a positive year for the country and the share market. Market returns of 7-8% should be achievable of course barring any International disasters.
With interest rates remaining low, you should definitely review your home loan especially if you are paying 4% or above. I have never been in favour of fixing as banks always make a profit from fixed rates, however if there was ever a time to consider it, this is it with a possible rate rise towards the end of next year.
Insurance premiums are coming down with changes in the financial services industry forcing the insurers’ hands. It is crucial to make sure your assets are protected, in particular your most valuable asset….your income. Come in to see if you are over or underinsured and if your premiums are too high.
Have a prosperous & enjoyable 2017