Think Acceleration

What a great start to the year. Prosperity abounds and it is not hyperbole. I am speaking of the US and global economy generally.

The US still matters as a sentiment leader to be sure on a daily basis, Be it the Australian stock market or the property market, investors are guided by what is happening in the US economy and what the US stock market is doing.

It shouldn’t be this way of course. Certainly not to the extent that it is. China is far more influential on Australia conditions, but old habits die hard and the US is nonetheless a significant real factor too.
This is why I am, I have to say, so excited about this year and many years to come. US economic data is simply booming.

The media headlines are full of comments about recent stock falls, but these are truly at the margin in what remains a very strong bull market. In fact, I suggest we may well see an almost immediate recovery to fresh record highs for the Dow Jones and the technology stocks too. The big global technology stocks could well be leaders this year as they continue to mature as corporate cultures, and the global prosperity surge feeds their coffers.

Speaking of headlines, when you look at the Australia property market they are actually reasonably upbeat. There are still the odd bubble forecasters and such what, but they have no real fundamental basis and are either about selling newsletters that are a great fictional read and that’s about all, or maybe selling a few newspapers too. When it comes to the real fundamentals, the US tax cuts are set to further and significantly accelerate the US economy long term. Which will feed in both a very real sense, and certainly in terms of sentiment, into the global and Australian economies.

I hope you noted my warnings last year about Bitcoin. If something looks to be easy to be true, that’s usually the case. Hard work and wise investment in goods and services that make the world a better place, rather than pure self-indulgence, is by far the superior way to be successful long-term and in every way. Not only is property a stand out in this regard, but it looks very good on the ground in a very real sense for the next few years to few decades.

Remember, we are at the bottom of the future range. My personal view is that there is a very real likelihood of acceleration in Australian property values this year.

Clifford Bennett