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