Russell Investment Summit – Melbourne 19 Jul 2012

Benchmark Consultants principal financial planner, Mr Peter Stewart, was lucky enough to attend the Russell Investment Summit in Melbourne today (Thu 19 Jul. 12).  The summit featured some notable international experts who spoke about the current investment climate.

Chris Corneil – CEO Australasia Russell Investment, says a retirement tsunami is coming to Australia with 5.5Million baby-boomers set to retire.  In the next 10 to 15 years it is expected that 40% of all retirement investments will need to be transferring from accumulation phase, to income phase.

Mr Alan DuPont, another key speaker at the Russell Investment Summit covered the topic: “Transitioning to a new world order. More turbulence ahead”

DuPont said, Geopolitical conditions are shaping the current economic conditions and volatility is the new normal. We are currently transitioning to a new world order.  Old templates will no longer work.  Pax Americans is unravelling. IMF, World Bank, USA.  Emerging economies and states have their own views on how the world should be ordered which is different to the Western Nations.  It is estimated that it will take more than 5 years to turn the economy around. It will be running $1Trillion annual deficits for next 8 years with a significantly large debt.

Japan is in bigger trouble with more debt and no GDP growth in the past 20 years.  Population is now in decline from 126m to 50m by end of century.

China and emerging nations will be 78% of world GDP in 25 years. The Financial Crisis is forcing major political change. There is a major risk of heightened strategic competition between the major powers, particularly the US and China.

It is estimated 40% of trade in world and 60% of energy is found in the Western Pacific thus creating an area of greater risk of potential conflict including key strategic islands.  China’s perception is that near these strategic islands are huge reserves of oil and gas with these islands being claimed by other Asian nations. There is a strong possibility that the US and China Navy’s may attempt to face-off each other over these strategic islands. USA is responding to this strategic risk by repositioning its military. Economic in-connectivity will be the potential peacemaker in Western Pacific as conflict would be a lose lose for all nations.

With Iran and other Middle East countries acquiring nuclear weapons, we expect the fallout will play out and come to a head in the next 18 months.

Andrew Pease – Global Head of Investment Strategist for Russell Investments said “Doubt is not a pleasant condition” the risk in risk of world will be around for a while, so we need strong investment processes.

The Share market is good value. Composite value Ind Undervalue USA 7%, emerging Markets 16%, Euro Markets 19% Australia and Japan 25%. The longer view rolling 5 to 10 years returns forecasts in Australia shares 8.5% pa and Fixed Interest 3.0% pa.

Finally, in today’s news: the Aussie Sharemarket SPI was up 35 points at opening today. The US housing market rebounds.  Corporate profits are continuing and the $AUD still remains strong.

If you want more information about personal financial advice, we urge you to speak to your local financial planner.  Call Benchmark on 08 92932922 to make an appointment with a Certified Financial Planner.

Benchmark Consultants is a corporate representative #289570 of Australian Financial Services Ltd AFSL #297239 AFS ABN #50116900362. Peter Stewart, is a CERTIFIED FINANCIAL PLANNER® professional, and a member of the Association of Financial Advisors Ltd and Financial Planning Association of Australia Ltd.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s