Simon Shields from Monash Investors says there continue to be reasons to be positive on the outlook for equities. He says a strong property market, decent jobs figures and the recent interest rate cut are all positive for the current environment. “If housing is ok, generally retail is ok, because there’s a wealth effect. Property prices have been strong, and even though people have been fretting about a little bit of weakness early this year, it’s been pretty marginal.” Shields says the recent rate cut and the likelihood of another cut will continue to support higher asset prices. However, he cautions that with elevated valuations investors should be prepared for greater volatility. “On balance I’m bullish not bearish, but you can’t be calm about it because prices will rise but they are going to be more volatile.” Watch the video for more detail and why Shields believes profit margins are likely to keep getting squeezed:
Monash was established in 2012 by Simon Shields and Shane Fitzgerald. The Monash strategy is benchmark unaware, style and stock size agnostic, and is both long and short.