Safe game

The Wall Street willies are the major influence on our stock market again after some promising signs of decoupling from the NASDAQ asylum. Every morning bleary-eyed Australian fund managers check the screens, worrying how much effect bad numbers from Cisco might have on Coles Myer or CBA. The answer of course should be none.

According to the Axiss tracking concern, Australian funds under management grew 13 per cent last year to $590 billion. The figure is projected to rise by up to 20 per cent annually over the next 15 years to $2,300 billion. Not all of that will go into the Australian stock market. Indeed it could not. A large slice will go into local and overseas bonds, property and foreign shares. But some very hefty sums must go into domestic shares every year. Managers cannot simply eat the money. That is why long-term investment in Australian equities will remain the best game in town.