Investors urged to look at fabulous five
PROPERTY is under pressure and shares are set to take a breather, analysts say, and returns from cash in the bank are as bad as ever. So is there anywhere you can put your money this year where it might generate a decent yield?
While nothing is guaranteed in the world of finance, and good news stories can quickly turn sour, investment specialists see potential for strength in some markets this year. Here are five investments that just might thrive:
EUROPEAN SHARES
Many overseas share markets surged in value last year and are tipped to do better than the Aussie market again this year, although not in all regions.
AMP Capital forecasts international sharemarket returns for 2018 to be 11 per cent.
“Global shares are due to a decent correction and are likely to see more volatility, but they are likely to trend higher and we favour Europe — which remains very cheap — and Japan,” AMP Capital head of investment strategy Shane Oliver said.
Morgan Stanley Wealth Management said 2018 was Europe’s “time to shine”, boosted by solid European Union growth and investors seeking value for money.
US SHARES
The US sharemarket continually broke records last year and while there are expectations of a correction at some point, more strength has been forecast for this year. Wealth for Life Financial Planning principal Rex Whitford said many people underestimated the potential power of the Trump administration’s income tax cuts and sweeteners to lure US companies back home.
REGIONAL REAL ESTATE
Capital city housing markets are under pressure, with prices falling last month in four cities, including Melbourne and Sydney according to research house CoreLogic.
Property investment experts say regional centres offer growth potential but you should choose carefully.
Suburbanite principal Anna Porter said when it came to Victoria there was still growth potential in Geelong, and for the far reaches of suburbia, in Frankston. Goulburn was the place to in- vest in New South Wales, Ms Porter said, and Tasmania’s booming housing market still offered good rental income yields.
Elsewhere, “we still have eyes on Adelaide — it’s a fantastic opportunity for investors at the moment,” she said.
INFRASTRUCTURE
Investments in infrastructure, such as airports, toll roads and pipelines, have been strong performers for a few years and look set to do well again.
Their relatively high income payments are popular because interest rates are low.
AMP Capital has forecast unlisted infrastructure investments to rise 10 per cent this year.
RESOURCES
Global economic growth is forecast to improve, which is good news for mining and energy companies, and BHP Billiton is among stockbrokers’ favourites. Mr Whitford said a flow-on effect of a strong US economy would be rising demand for products from China, which would increase its demand for Australian resources.