- Switzer Report - https://switzersuperreport.com.au -

Plan not to panic

Key points

  • The Reserve Bank still has some worries about property market.
  • Any fallout in the property market won’t mimic the US.
  • Best way to minimise losses is to diversify across asset classes.

 

Investors may have to resign themselves to continue to invest under a cloud of uncertainty, whether in shares or property. Even though pressures may remain to keep interest rates low and supportive, investors continue to get warnings from authorities and thought bubbles from market commentators – whether the markets are rising or falling. The important thing is to plan not to panic.

Clearly, the Reserve Bank of Australia still has some worries about risks posed by the rise in housing borrowings. In the latest warning, deputy governor Philip Lowe said “these events [a slowing in the growth of rents and a high ratio of housing prices to income] . . . are leading to some increase in overall risk.”