2010 Financial Horoscopes

Pulling out the crystal ball is always fraught with danger… So I have closed my eyes and here we go: 

ARIES
Australian Shares
The Australian share market still provides a good medium term investment opportunity. Over the past year, companies have taken the opportunity to cut costs and wind back debt levels, which should support profit growth as the economy recovers.

TAURUS
Emerging Markets
Likely to be the key driver of any global economic recovery. It is anticipated that countries like China, India and Indonesia will record strong economic growth in 2010 and beyond.

GEMINI
Developed Markets
Developed economies like the US, Japan and Europe are likely to record positive growth in 2010 after contracting over the past 18 months. To date these countries’ share markets have underperformed developing or emerging markets, and with a return to growth, the company profit outlook should improve and attract investor inflows.

CANCER
Australian Resources Sector
Strong demand out of China for iron ore, coal, energy and base metals looks set to lead to rising prices in 2010 as miners reach full production. China is now Australia’s largest export destination and with economic growth of around 9% expected next year, the outlook for this sector still looks bright.

LEO
Australian Banking Sector
The top four Australian banks are rated among the safest in the world. With domestic economic growth set to strengthen, bad debts are set to improve and banks should be able to boost profit levels and keep paying out attractive dividends.

VIRGO
Listed Property Trusts
This sector was one of the underperformers during the global financial crisis as it went through a radical rework period reducing debt levels, setting realistic expectations and selling offshore and non-core assets. Now, property trust structures are looking healthier and with the outlook for the Australian economy positive, some growth is expected in this sector.

LIBRA
Global Listed Infrastructure
This sector looks attractive with demand for assets such as airports, ports, toll roads and energy pipelines rising and prices usually guaranteed to rise in line with inflations. With a large amount of infrastructure spending to take place globally, the level of investment opportunities in this sector should increase.

SCORPIO
Australian Residential Housing Exposure
Australia is not building enough houses to match demand due to our rising population. With record house prices in all capital cities (except Perth), a supply response will come eventually and with it higher demand for building materials, land and construction activity.

SAGITTARIUS
Cash
Official cash interest rates are rising in Australia and will continue to do so in 2010, as will mortgage and deposit rates.

CAPRICORN
Inflation Linked Bonds
With Federal Government debt rising, the government has started to issue inflation linked bonds, the first since 2003. These provide investors with a fixed coupon (interest) payment (usually around 3%) and then compensate the investor on top of this for the rate of inflation (currently 1.5%). With the Australian economic outlook positive, inflation is expected to be on the rise over coming years, and inflation linked bonds offer a form of inflation protection.

AQUARIUS
Australian Top 10
The top 10 tips for Australian equities are as follows: BHP Billiton Limited, Telstra Corporation Limited, Woolworths Limited, Prime Infrastructure Group, Tabcorp Holdings Limited, Servcorp Limited, Asciano Group, Geodynamics Limited, Brickworks Limited, and Entek Energy Limited.  From  Financial Review Weekend Edition

PISCES
China
Despite Chinese authorities looking to put the brakes on its economy, we should not forget potential growth for the Chinese economy, given the still relatively low productivity levels; it is thought to be around 8%. China’s share market valuations have been broadly in line with its average level since the mid-1990s. 2010 could be viewed as buying opportunities for risk assets within the larger global market upswing.

SO… there we have it!   There are many opportunities – it is just a matter of getting the right advice for you and being comfortable with it.   Contact us to find out more 

These horoscopes were done with the assistance of:

Colonial First State: “January 2010 Investor Review”
Colin Whitehead: Fat Prophets
Jamie Nemtsas: The Investing Times
Kristian Dibble: Rivkin Report
Elio D’Amato: Lincoln Indicators
Steve Johnston: Intelligent Investor