Sharemarket predications abound in December. Rather than be seduced by market noise, look for high-quality companies that are trading below their true value. Think like a company owner, not a sharemarket trader and focus on the trend.
I’m moderately bullish on equities next year. Improving global growth should support a better domestic economy. Higher non-mining investment, government infrastructure spending and resource exports will help offset weaker housing investment and consumption.
I’m not convinced the Reserve Bank will hike interest rates in the second half of 2018 given persistently low wages growth and inflation. Rates on hold next year, an Australian dollar closer to US70 cents and an economy grinding a little faster will please investors.