Investors should consider the two-speed economy, how to benefit from it and what are the risks involved
Gold Coast, Queensland (PRWEB) June 01, 2011
Last month, the Australian Federal Budget was released, and much of the commentary surrounding it focused on the country’s two-speed economy - the resources boom versus the retail lag. ASIGroup Analyst, Mark Madden, says it is important for investors to take this into account when making investment decisions.
According to Madden, investors have made money this year – the market performance for the financial year to date is 7.49% (As published on 24/05/11 in The ASIGroup Blog – Market Talk). But, Madden makes it clear that this is not the case for everyone – the miners are doing very nicely, while retailers are doing it tough. So, “just like the Australian budget, investors should consider the two-speed economy, how to benefit from it and what are the risks involved,” he says.
An important factor to take into account is that setting interest rates in this environment is extremely challenging (Mark Madden, 24/05/2011). The RBA is in a difficult position – if they raise rates too soon, they could cause a collapse in the economy, but if they hold on, inflation could spiral well out of the Bank’s comfort levels and disable the broader economy. Madden, and The ASIGroup, believe that with the RBA leaning towards a tightening bias, our two-speed economy will continue, and that for now “it would seem that investors should maintain overweight positions in the resource sector.”
The ASIGroup is an Australian owned company that provides information and research for some of Australia's leading Stock Brokerage Firms, financial information providers and general trading advisors. These companies are located throughout Australia's capital cities and are widely considered the best services available in Australia today. The ASIGroup provides information on all types of Stock Market Trading including Shares, CFD’s, Futures, Futures and Options.
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