Back at the start of the year when the Chinese stock market suffered a series of violent falls, one analyst told clients it was time to “sell everything”, except high quality bonds.
Australian economist Stephen Koukoulas offered the analyst, Andrew Roberts from RBS, a $10,000 bet that a diverse portfolio of assets would actually be higher by the end of the year.
Roberts never responded, but Koukoulas was right. Every asset class he picked – ranging from iron ore to global stocks and Sydney house prices – is now higher than it was back in January. After a year of surprises, global stocks are at record highs and it is bond prices that are getting crushed.
This is one of many topics we talk about on this week’s episode of Devils and Details, our markets and economics podcast. Also on the agenda:
- Australia’s surprise negative GDP number
- The outlook for the federal budget
- Risks in the housing market and the outlook for interest rates
“The Kouk” is one of Australia’s most forthright economists and looking back at the chaos of the year led to an insightful chat.
You can find the show on iTunes or listen in below. And we’ll be back next week with our Christmas special, reviewing the best (and worst) calls of 2016. Enjoy!