Where to invest in 2000?
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Tuesday, 25 January, 2000 - 21:00
WHERE do I invest in 2000?
This question is one that will no doubt take up many of the centimetres of newspaper space allocated to financial journalism in this country.
Analysts in the US and Britain have already undertaken a similar exercise and it is interesting that their views differ from ours.
This is no doubt explained by the different stages of development and growth that we are seeing in the economies.
If we were to identify potential growth areas in our economy these would be the ones we would consider:
• Financial services companies such as Colonial and others are recipients of the phenomenal growth we have seen in the
contributions being made to superannuation over the last ten years.
A lot of the growth has been mandated by government regulations covering superannuation contributions. Nevertheless, it has been a growth that is Malthusian or exponential.
As these monies go to be invested it is companies such as Colonial and AMP that will be the beneficiaries
• The ageing population in Australia will create a captive market for providers of aged residential care developments. Lower mortality figures will ensure we have a longer period in retirement accommodation
• As before, the ageing population and the longer life spans ensure that the industries catering for health care and biotechnology area of the market will have burgeoning demand
• Despite the dire warnings we have issued over the past few months relating to over valuation of the technology and communications sector, it is readily apparent that we have completely changed the way we do business.
The Internet Revolution is the greatest upheaval we have seen since the industrial revolution of the 1700s.
The basic tenets of business as we have known it have changed. No longer is the fax or courier the main means of communication. Email and related technology is now the preferred means. URLs are now common parlance for most of us.
However, while recognising the enormous potential of this sector, we must emphasise the need to exercise caution. The market has finally decided to re-rate some of the stocks in this area in the American market.
The smaller players who do not deserve to be rated as highly as they have been appear to be suffering the consequences of the bubble mentality we seem to have developed. So, whilst
seeing the potential growth to be had in the sector, we emphasise the need to be cautious and choose your stocks well
• The commodity price cycle appeared to be turning recently. As a result, a number of our resource stocks have risen
significantly. Some of the rise is probably not justified. Until world economic growth starts to display a sustained level of growth it is hard to see that the whole of the resource sector deserves to be increasing. As with the technology stocks, selective buying, possibly with a focus on the larger resource companies, will offer potential for some profits to be made.
Irrespective of where you choose to invest in the stockmarket this year, you can rest assured that the ride will be volatile. The potential fallout from a New York correction cannot be underestimated.
This question is one that will no doubt take up many of the centimetres of newspaper space allocated to financial journalism in this country.
Analysts in the US and Britain have already undertaken a similar exercise and it is interesting that their views differ from ours.
This is no doubt explained by the different stages of development and growth that we are seeing in the economies.
If we were to identify potential growth areas in our economy these would be the ones we would consider:
• Financial services companies such as Colonial and others are recipients of the phenomenal growth we have seen in the
contributions being made to superannuation over the last ten years.
A lot of the growth has been mandated by government regulations covering superannuation contributions. Nevertheless, it has been a growth that is Malthusian or exponential.
As these monies go to be invested it is companies such as Colonial and AMP that will be the beneficiaries
• The ageing population in Australia will create a captive market for providers of aged residential care developments. Lower mortality figures will ensure we have a longer period in retirement accommodation
• As before, the ageing population and the longer life spans ensure that the industries catering for health care and biotechnology area of the market will have burgeoning demand
• Despite the dire warnings we have issued over the past few months relating to over valuation of the technology and communications sector, it is readily apparent that we have completely changed the way we do business.
The Internet Revolution is the greatest upheaval we have seen since the industrial revolution of the 1700s.
The basic tenets of business as we have known it have changed. No longer is the fax or courier the main means of communication. Email and related technology is now the preferred means. URLs are now common parlance for most of us.
However, while recognising the enormous potential of this sector, we must emphasise the need to exercise caution. The market has finally decided to re-rate some of the stocks in this area in the American market.
The smaller players who do not deserve to be rated as highly as they have been appear to be suffering the consequences of the bubble mentality we seem to have developed. So, whilst
seeing the potential growth to be had in the sector, we emphasise the need to be cautious and choose your stocks well
• The commodity price cycle appeared to be turning recently. As a result, a number of our resource stocks have risen
significantly. Some of the rise is probably not justified. Until world economic growth starts to display a sustained level of growth it is hard to see that the whole of the resource sector deserves to be increasing. As with the technology stocks, selective buying, possibly with a focus on the larger resource companies, will offer potential for some profits to be made.
Irrespective of where you choose to invest in the stockmarket this year, you can rest assured that the ride will be volatile. The potential fallout from a New York correction cannot be underestimated.