Standard & Poor’s (S&P), the world’s largest credit reporting agency, last week cut their outlook for Australia’s credit rating to ‘negative.’ According to S&P, there is a one-in-three chance that they will cut Australia’s rating within two years. Should Australian investors be concerned? The investors Livewire asked responded with a resounding ‘no’, but with caveats. Jonathan Rochford from Narrow Road Capital said that a downgrade “isn’t significant… In a world where government debt is assumed to be risk free.” However, he points that we cannot continue to run deficits each year “with no real prospect of balancing the budget on the horizon.” Damien Wood from Spectrum Asset Management says given the global hunt for yield there has never been a better time to lose a ’AAA’ rating. However, after 24 years without recession he says the picture would look a quite different should the Australian economy fall on tougher times.