From Italy To The FED To Your Property!
  • 17 December 2016

From Italy To The FED To Your Property!

So far. So amazing! Here we are at all time record highs in the Dow Jones Index just as we forecast all year, and remember how I have been saying that this kind of stock market prosperity and atmosphere will definitely flow quickly over into Australian property prices.

No one else was forecasting this, may I mention. It is nice to get it right, but also I have to thank you for your patience and belief when we are saying things that just are not mainstream at the time.

We are writing tomorrow’s news today.

Sure, there is today’s newspaper to read, but always be mindful today’s newspaper is already yesterday’s news.

So be cautious about incorporating the sentiment of any news story from the big financial and media organisations into your outlook for future property prices. The world is changing. It is different every day and at an accelerating pace. This means the future looks less like the past, than it ever has. This is our opportunity however. While the big players do their data crunching we can seize the opportunity right in front of us.

We are about human economics. Which is why we always need to “look out the window” to get a handle on what the real world is actually doing. In doing so, we were bullish China, the USA and even Europe this year, as well as calling the start of a likely 11 year rally in commodities and the Dow Jones Index to hit 19,000 by year end. As I like to say, it's not rocket science, it's common sense!This is an approach which is non-existent in the mainstream media. How could it be? It is their job to report the news, as fearfully as possible, and they do do that so incredibly well. The media in the main, is simply not well equipped to deal with considering a future which looks nothing like what has yet been seen before.

Perhaps, this is why the Financial Rearview says that it is "always on the money". We like to think of ourselves as ahead of the money…

Oh! I’m sorry… did I say “REARView”? Of course, I meant “REView” of course. They review what has happened in financial matters.

To be successful you do have to out-think the biggest players in the market, and this includes the biggest media organisations. Look for good journalism for sure, it does exist, but not always where you first thought you might find it. As independent investors, it is all about speed of action, with an abundance of consideration and true expert help.

But, you have to have the courage and the recognition of yourself as being able to do this. You do.

Speaking of which, we have a few fundamental issues which sentiment is focussing on at the moment. We got the Italian referendum right, forecasting a no-vote would see stronger stock prices and that the Euro was a great buying opportunity. We got Trump right, his election, some immediate volatility and a resumption of the bull market. We have even been getting Sterling right. As Brexit, even if it happens, and I still don’t think it will, is not a big deal or problem for the UK economy to deal with in any case.

The Federal Reserve Bank have left interest rates on hold. So a great many investors will be inclined to step back and wait. May I suggest you don’t. The dominant risk remains runaway markets to the upside, and that includes the hot spots in Australian property. Once markets clear the hurdle of the federal Reserve raising interest rates this week to just 0.75%, they will all be ever more desperately competing to own quality assets in the most prosperous period in history.

Hence despite there being plenty of evidence to support our always held view, since 2009, that when the Fed eventually raised rates, that stocks would only further explode to the upside, and so too will property, the majority will, if they can, stand aside for this next week.

As I said, this is the opportunity. It is a closing window situation to some extent, though for soon everyone will finally realise the world is actually in great shape. It is as if the many panicking type property commentators and economists, really cannot at all see the abundant prosperity that is all around them. Maybe their windows are simply too high. Too far away from the real world, where the real work gets done, to see it. They are indeed like the Gold Fish that cannot see the water in which it swims.

The inescapable reality is that we live in the midst of the most prosperous period in history. So no reason to fear the Federal reserve raising interest rates. Embrace it as a stamp of confirmation of the good times ahead.

Clifford Bennett

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