The current economic climate does offer opportunities for good returns, but investors need to be more selective in their pickings, a capital markets specialist said.
"As the bear market proceeds, more and more assets start to offer good longer-term value... to exploit this emerging potential you need active stock selection," MLC capital markets head Susan Gosling said yesterday.
Assets are impacted by the global economic downturn in different ways and at different times, creating a situation where some companies look cheap when taking a long-term perspective, Gosling said.
"To follow an index [now], is not applying the information that is progressively becoming available," she said.
"This environment throws up a lot of opportunities for outperforming a benchmark."
As the global economy is digesting the fallout of the US sub-prime crisis, second round effects are starting to impact emerging markets. As a result, the demand for commodities has weakened.
The Chinese economy is slowing and that has been enough to take the pressure off commodity prices.
"Australia is starting to lose its lustre again as the resources boom begins to fade," Gosling said.
The big question now is whether the China and wider Asia story is big enough to sustain a commodity boom, she said.
