Despite varying global accounts over the summer that seemed to suggest the economic recovery was in full swing, recent months have seen a number of worrying signs from economies all over the world.
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Impacts Of Economic Slow Down: Should You Invest?
Despite varying global accounts over the summer that seemed to suggest the economic recovery was in full swing, recent months have seen a number of worrying signs from economies all over the world. Japan has re-entered recession, and the UK’s economy is slowing once again. The Australian economy is also doing much worse that experts predicted, with private investment in particular slowing to a crawl. This has certainly had a knock on effect, and the danger is that many will once again be facing difficult decisions regarding their investments, homes, and mortgages if things don’t pick up.
One of the major reasons for economic slow down is the fact that the resource boom in China is essentially over. This has meant that massive re-balancing is needed from the Australian economy if it wants to avoid a serious crash. Previously, the huge demand for metals from mining has seen a huge amount of investment and growth in the mining industry, which how has drawn to a close. This in itself has of course, had a huge impact on the economy as a whole. With around a quarter of all exports going to China, it is clear why this has had such an impact. The knock on effect of course is that many other areas have begun to slow as a result. Private investment is one of them, and it is estimated that private investment has fallen significantly over the last few months. While this may sound concerning though, it is important to remember that these changes were expected to some extent. Many were aware that the mining Chinese boom was not going to last forever for example, and as a result there have been measures taken to ensure that the economy has as soft a landing as possible. Australia is no stranger to mining booms, and this time important factors such as inflation and allocation of capital have been kept within acceptable and sensible levels, which means the economy is much more likely to land gently. This is good news for everyone of course, but especially investors and those considering trusts and property. The current climate is likely to mean that investments will initially drop in value, so while not ideal for existing investors, the climate is actually very favourable to potential investors looking to make their first moves into the market. Trusts can be a solid choice for a new investor, as while rates are currently likely to be lower, they will start to grow in the coming months and years to provide a good return. Property and other assets are also likely to be available much cheaper than normal for a short period of time, so striking while the iron is hot could create a potentially beneficial situation for those looking to invest.
As mentioned, property and trusts can be a solid choice for the new investor, and there are a number of professional firms that are there to guide and aid investors looking for solid returns. Interestingly, while the current economic news is somewhat mixed, there are a number of investment industry sources that predict a good year for investors in 2015, further reinforcing the notion that now is a good time to get on board. In terms of choices, it’s usually best to seek professional advice when it comes to finding the very best investments, but some start-up companies, property, or popular and in demand markets are generally a good choice provided you are thorough with research. Even if you plan on investing yourself without too much professional help, it can still be worthwhile to get a few consultations to make sure you have covered all angles and haven’t missed anything important that could end up costing you money. Overall though, while initial signs may appear to be telling us the opposite, Australia is ripe for investment, especially as next year draws closer, when a number of great returns are likely to be made for those that understand the current economic slow down is only temporary, and has been accounted for on many levels in terms of damage limitation. Of course, there is no such thing as a sure thing, but the current investment climate is certainly not as bad as it may first seem.
This is a freelance article from Gemma Hopper.
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The review "Impacts Of Economic Slow Down: Should You Invest?" was last updated on 17/04/2015.