The shakeout in the global financial markets has led to a renewal in conservatism, which will be a positive outcome for markets, according to MLC investment strategist Brian Parker.
"The 20 per cent returns of the past managed to hide... in a multitude of sins. In the future it will not be that easy to hide," Parker said at a conference in Sydney yesterday.
He said the drive for higher debt by both companies and households will cease, including the sale and distribution of structured products.
"There has been too much toxic crap flogged around the market. It is now payback time. Too many people have done too many dim-witted things with money," he said.
Investors will take a closer look at the risks, will focus more cost containment and will demand greater skill from their investment managers, according to Parker.
Globally the developed economies will grow at slower rates, while the gap between Asian exports and the growth of these economies will widen.
"Asian banks did not follow their US and European counterparts when it came to high borrowing levels. Asian economies have been a lot more conservative and are now producing more for their own markets and their own consumers," he said.
Parker said that global equities will offer more value than Australian markets in the future.
"The Australian share market has ended its dream run. There will simply be more opportunities offered offshore," he said.
