Investor Education Articles

After a challenging period, the outlook for Australia's interest rate-battered property funds is improving. Stabilising borrowing costs and the prospect of a rate cut next year are paving the way for a market recovery. With attractive valuations and strong income growth, listed property funds invest in portfolios of Australian Real Estate Investment Trusts (or A-REITs) are poised for solid gains, especially as early signs of recovery are emerging across the retail, industrial and office sectors.

There are countless stories of investors who’ve made their fortunes only to lose them just as fast. Masayoshi Son’s story is one of the more extreme wealth rollercoaster rides. After making billions during the dot-com bubble through his investment in Softbank, the company he founded, he lost almost all of it when Softbank crashed 99%. As a result, he earnt himself the dubious accolade of being the larger loser of net worth in human history. Masayoshi is once again riding high, but you don’t want to have to lose a similarly large portion of your net worth to learn how to hang onto your investment gains.

It’s fair to say the S&P 500 has led global markets up a wall of worry over the past couple of years. But the S&P 500’s gradual grind higher evolved into full on market euphoria when Trump won the US election so convincingly. We all know that market euphoria tends to end in tears. The dot-com bubble was a memorable example. With those memories in mind, it’s worth asking the question: are US/global markets too bullish?

Most investment portfolios have limited exposure to agriculture, but this under-represented sector is as an attractive asset class, driven by rising global food demand, shrinking arable land, and resource scarcity. While the global trends of population growth and a rising Asian middle class have long supported agricultural demand, supply constraints—exacerbated by the pandemic and geopolitical tensions—have created powerful tailwinds for agricultural investments.

Less-young investors may remember the days when asset allocation was as simple as translating your age into a percentage which represented the amount of your portfolio that should be invested in lower risk, fixed income opportunities with the balance to be invested into higher risk assets like equities. How the investment world has changed since those simpler days! Asset allocation has evolved into a more nuanced and complex decision-making process which needs to address a much larger universe of available asset classes, as well as some profound market shifts.

With interest rates remaining elevated, commercial real estate debt (CRED) funds have emerged as an increasingly attractive option for investors. Offering stable, income-generating opportunities and attractive, risk-adjusted returns, these funds are gaining ground as one of the fastest-growing segments of the private debt market. Despite challenges in the broader real estate sector, including declining office valuations, structural tailwinds like housing undersupply in key markets, population growth, and the rise of e-commerce and data centres are driving long-term demand for CRED.

Trump talked a big game on tariffs during his journey back to the White House. ‘If I’m going to be president of this country, I’m going to put a 100, 200, 2,000 per cent tariff,’ on cars from Mexico he forewarned. He went so far as to describe tariffs ‘as the most beautiful word in the dictionary.’ Investors should prepare for two uglier words...

The rise of private market investing is continuing unabated with more and more individual investors allocating up to 20-25%+ of their portfolios to the asset class. This trend appears set to continue with a growing number of investors who don’t currently have private markets exposure actively considering whether it’s aligned with their investment plan and goals.

Many investors still see alternatives as complex, illiquid, and opaque—an asset class best avoided. Yet with the equity-bond mix delivering less consistent results, alternatives are becoming essential for those aiming for stronger portfolio resilience, higher returns, and alpha generation.

It’s a popular pastime for professional and individual investors to bemoan the impacts the rise of passive funds is having on markets. However, recent Goldman Sachs research questions the validity of this argument. We use that research as we embark on a myth-debunking journey.

With the S&P 500 rallying an historic 40% over the past twelve months, you’d be forgiven for thinking all is well with the US Government’s finances. After all, the state of the world’s largest economy is inextricably connected with the US Treasury’s financial health. Sorry to shatter that illusion, but the truth is very different. Do not read what follows if you prefer to believe in the US fairy tale…

With global equity markets partying like its 1999 despite some major risks lurking in the background like the potential unwinding of the yen carry trade and the US Treasury’s precarious financial position, now may well be a good time to hold some cash.