Asset Allocation: Patience Is A Virtue
juillet 04, 2024
By Tony Brennan, Chief Investment Strategist
As some central banks have begun to lower interest rates, the RBA and the Fed are yet to ease their restrictive policies, with the RBA even viewed as potentially raising rates further in coming months. Yet progress in returning to a more sustainable footing, with low inflation and continued growth, has been substantial in both Australia and the US over the past couple of years, and would still seem a good chance of continuing provided patience in lowering inflation is maintained. This might also reduce the risk that policy is set too tight for too long, with a seemingly real prospect of a recession in Australia if the RBA tightens further, and of undue weakness in the US economy if the Fed holds off easing indefinitely. Encouragingly, both central banks seem mindful of the risks and the outlook still seems positive for investment returns at this stage, and we maintain our tactical asset allocation advice to be above benchmark positioning in fixed income, and at benchmark positioning in equities, the latter still being cautious in regard to the downside risks as well.
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