At a panel discussion held at yesterday’s launch of the Livewire social investment platform, Geoff Wilson, chairman and portfolio manager at Wilson Asset Management, said while he was bullish for the short term, he was nervous over the medium-term outlook.
He said his positive short-term outlook was due to the high level of market participation.
“If you want to raise money, the amount of equity that’ll be raised over the next two or three months before the December cut off is significant because there’s a really strong underlying demand there,” said Mr Wilson.
However, he said the information he has collected around the market and people in the real world has made him cautious about the medium term.
Peter Morgan, founder and CIO of boutique investment house 452 Capital, held a similar view, saying he was reluctant to move from cash to other assets at this point.
The main reasons for his concerns were record-low interest rates and the proportion of money Australia has invested in China.
“You’ve got interest rates at record lows, manipulated lower by the central banks for the last five years, and it’s a matter of when that stops; it could end tomorrow,” said Mr Morgan.
“It scares me,” he added.
Steve Johnson, chief investment officer, Intelligent Investor Funds, was less concerned, however.
He said while many people were worried about a significant rise in inflation, there were few signs of it actually occurring.
“If anything, deflation is more of a risk than inflation at the moment,” said Mr Johnson. He did, however, agree with Mr Morgan that the forecast for China was concerning.
