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Is good investing boring?
Peter Esho, Co-Founder at Wealthi, recently caught up with the team at Bloomberg Radio to talk about a range of in-depth business and investment themes impacting the market.
They discussed a range of different outcomes and where he thinks the best opportunities are at the moment. In essence, the best investments are often the most boring.
What many people consider as ‘boring’ investments may find favour and deliver the saving grace as markets continue to grapple with rising inflation.
Peter said “some illiquid assets like residential property and others that don’t have massive fluctuation in price are finding support as investors look for certainty.”
Given the current global market condition where inflation is biting into corporate income and consumer spending power, Esho said people are searching for certainty, more than anything else.
According to Esho, companies and businesses need to deal with rising cost base such as operational costs, material costs and potential wage increase in some sectors.
“Some businesses must be asking ‘where will the revenue come from’ and how do they protect their earnings in the face of inflation,” Esho said. He also pointed out that, “Anecdotes around inflation have turned into reality. Companies now face rising cost base and potential wage increases. Even central banks have gone to extremes of denying the need to increase interest rates to now raising rates in such a short period of time.”
“Based on what we’ve seen over the past few weeks, it looks like central banks – including the US Federal Reserve and the Reserve Bank of Australia (RBA) are confused themselves. People are now watching what central bankers will do, not just what they are saying.”
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