Investors Voice Category: Economics

One nasty economic side effect of the COVID-19 driven lockdowns is a fall in prices for many goods and services and a drop in wages and other income.

Our assessment of the economic and investment implications of COVID-19 depends on three fundamental issues - The length of the output gap, the policy responses to mitigate the output gap, and if the crisis results in fundamental and lasting changes in consumer behaviour.

With the stock market again reaching dizzying heights, at the same time that corporate earnings and global economies are slowing, it’s worth asking whether equity investors have had it too good for too long.

Emerging market equities also bring diversification benefits, with a significantly below-average correlation to other equity markets.

Research by UBS shows that online purchases in the US will grow to around 20 per cent of all purchases by 2022. This upward trend should also occur in Australia.

It seems like markets are getting increasingly nervous and as usual, at these times the financial media is rolling out the perennial bears because the only story they ever tell just happens to match what is occurring right now.