Written by Michal Lancemore
What Have I Learned This Year?
I have been a financial planner for the best part of 20 years and now, more than ever, I am very comfortable explaining to new and existing clients that my role has never been to predict asset returns or economic outcomes. My role is ensuring my clients have solid strategies and robust asset allocations to withstand the inevitable global challenges and economic rises and falls we will witness over our lifetimes.
Last Year’s Predictions
- Consumer confidence will continue to be sluggish on the back of rising rates, inflation and stagnant wages. Australia will not be able to avoid a recession in the new year, but the RBA will be quick to act by reducing interest rates to try and stimulate growth – and ensure a recession will be short and sharp.
Result: Wrong. Though a Recession was highly likely in the early months of 2023, by mid year the pundits were 50/50 and an even lower 1 in 3 chance in September. However, now that we’ve seen inflation continue to be stubborn and interest rates rise again in November, recession is a real threat in 2024 – signs of which are already happening in the US and Europe.
- Reducing interest rates will mean property values will experience a resurgence.
Result: Half right! Interest rates have done the opposite of reduce BUT property prices have risen and may continue to do so if investors flock to tangible assets amid persistent global uncertainty and share market volatility
- Sharemarkets could potentially find direction (the right direction) when a recession is known and interest rates drop.
Result: I may have jumped the gun by 12 months, but I still attest to this in 2024.
Prediction for Next Year
Recession will hit. Google the outlook for 2024 and you will be flooded by negative reports around tighter monetary policy, slower global growth, increased unemployment, and dwindling cash buffers. Where there is smoke, there is fire.
Trump will be re-elected. He’s polarising but has a lot of support.
More destructive climate events. A no brainer really with continued global warming and unsustainable practices.
Cure for some cancers. Now this is not exactly my own prediction, but the prediction of dead Bulgarian soothsayer “Baba Vanga” who died 26 years ago. I’d like to think this one comes true in 2024 to give us all some much needed good news.
Final Word for 2023
I’d like to thank all of my wonderful clients for spending another year with me – for giving me their trust and for allowing me to pry into their personal lives. With all of us aging and some on the cusp of retirement, I continue to learn so much about life, love and what really matters. So my final word for 2023 is to leave you with my top three nuggets of wisdom, sourced from said clients and my personal experience:
- invest in one’s health,
- say yes to opportunities, and
- celebrate the small things! (my favourite – can you hear the champagne popping?)