Get Ready for Returns Below 5% Says Australian Super CEO!

14th July, 2016

The following are direct quotes from an article titled “Australian Super CEO Ian Silk warns double-digit days are over” that appeared on theaustralian.com.au. It typifies why so many people make the wrong decisions at exactly the wrong times.

“Australian investors must get used to several years of lower ­returns on their superannuation funds in the wake of lower inflation and interest rates and turbulence on world markets, Ian Silk, the chief executive of the $100 billion Australian Super warned ­yesterday.”

“…Mr Silk said the double-digit investment returns that investors and superannuation fund members had enjoyed in previous years were not going to be repeated in the near future.”

“… we have told our members that now we are in an environment of low interest rates, low inflation and returns are going to normalise,” he said.

He said with an expected inflation rate of about 1.1 per cent this year, a return of about 4.5 per cent represented a 3 per cent real ­return. “In a low inflation world this is a good return,” he said.”

Those of you who attended our “April Investment Cycle Workshop” will know that we hold a very different view as to our future market expectations.

 

More importantly you would understand the logic as to why we set our expectations where they are. Throughout history we can show you periods of

 

  • Low Inflation, High Growth
  • High Inflation, Low Growth
  • Low Inflation, Low Growth
  • High Inflation, High Growth

 

We prefer to make investment decisions based on immutable economic laws rather than assumptions based on gut reading of a situation.

Reference: http://www.theaustralian.com.au/business/financial-services/australiansuper-ceo-ian-silk-warns-doubledigit-days-are-over/news-story/db04d795681e5920f9c1851b42b62c09

Picture: Australian Super CEO Ian Silk In Melbourne-  Stuart McEvoy

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Disclaimer: Any opinions or recommendations expressed here do not purport to Financial Advice but rather should be considered General Advice and does not take into account your personal needs and objectives or your financial circumstances. You should therefore consider these matters yourself before deciding whether the advice is appropriate to you and whether you should act upon it. Should Financial Advice be sought, we suggest you seek such advice from an appropriately qualified advisor. Any growth rates, yields, rental income, tax rates, interest rates, depreciation rates, inflation rates Dividends per Share (DPS) and Earning Per Share (EPS) etc shown are estimates only and should not be used as a guide to future performance. Past performance is not necessarily a guide to future performance and should not be relied upon for this purpose. Authorised Representative of PGW Financial Services Pty Ltd – AFSL 384713 ABN 15 123 835 441.