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Rotation 2005

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obiwan

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27 December 2004
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ok does anyone have picks for next years hot money flow & sectoral rotation ?

My pick :
US equities, with a resumption to higher peaks, whoa baby ! how's that for a contrarian opinion.

Reasons :
US is behind on the realestate boom, whilst this is happening puts a floor on consumption and market via wealth effect. Also exchange rate effeects will mean growth may surprise on the upside next year. When real estate tops out last move is people pumping sale of IV properties into equity market for the TOP at last (but maybe not for a couple a years and ? until a new jawdropping peak on the S&P/Dow).

Other candidates in australia :

- industrial property - too small a sector to absorb enough flow.
- emerging markets/asia/resources - ran hard last year, may not do so well if US consumption picks up AND USD continues to tank.
- bonds - now this would be a contrarian bit of genious or plain stupid.
 
obiwan said:
US is behind on the realestate boom...
Click to expand...

Im pretty sure the U.S led the boom and the price rises there are as bad as anywhere else.

I think 2005 will be a bad year for investing all round.
 
The US had its property boom as we did and they can and do enjoy 30 yrs fixed at 3%.Have friends who do a lot of property over there.

They wont have the debt problems many here will have as interest rates rise,which they will if Oil decreases to <$40 and their economy heats up and needs to be slowed down.(decrease consumer spending).

Ofcourse Bush or the next government needs to repay its huge debt this will have a huge bearing(the debt) on the future of the US$ and it seems that the current government isnt adverse to letting it slide----creating investment,export and decreasing spending.

In AUST
I agree that Commercial propety will continue to rise it is still possible to positively gear commercial property not so domestic.(I see this as one of the last opportunities in Realestate for the next 2 yrs)
In the 12 mths it has taken me to build a new Office/Warehouse my own property has increased in value 60%----I and the Bank are happy.

As for the Stock market there will remain those which outperform the index the trick will be to be heavy in our portfolios in these stocks.Underperformance should not be accepted and sitting out bad periods is for the wreckless.
Failing a terrorist germ attack(US cant continue spending at the current or definately past rate!) I feel this year index wise maybe Ho Hum.

Our economy is far better placed than the US.
Sectors.
Rescources
Biotech
Infrastructure


tech
 
Howdy,

I'm liking resources at this stage, basically watching China's demand and many reports saying this will remain strong throughout the year - iron ore, copper & coal especially

Also watching gold, simply the traditional inverse relationship between US dollar & Gold price to help the goldies next year.

Anyone interested in omens & numerlogy might like to watch larger industrials too - apparently every year that has ended with 5 has been positive for the Dow.

Good luck,

Mofra
 
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