Market peak brings glad tidings for superannuation investors
LONG-suffering superannuation investors finally have something to smile about after a five-year drought.
The Australian stock market reached its highest level since pre-GFC 2008 last week after good news from China and despite some disappointing jobs news in Australia.
Touching on 5250 points last week was enough for the Australian stock market to reach that five-year high, after an amazing rise of more than 13% since June of this year.
This means for equities-based superannuation fund holders, significant increases in their fund will occur for both the year just completed and the current year if the increases hold, after generally receiving statements showing drops or holding steady for the past five years.
Funds that are not equity-based are generally either based on property or interest-yielding investments, both of which have been sluggish for some time.
Generally the first of these three markets to improve after economic slumps is the equities market, followed by property, and then interest rates. The strength in the equities market is a good sign for nearing economic improvement, as is the improving property market data, including that in Ipswich.
One major reason given for the increase in the equities market last week was the further sign of economic improvement in China - a major market for Australian product including of course that from the mining sector.
There was some disappointing jobs news on the home front as the ABS last week announced a decline in employed people across Australia of 10,000. This could be affected by numbers leaving the workforce so is perhaps not a true indication of the overall employment position.
In all, the strength in the equities market is highly positive news for the economic outlook. From an Ipswich point of view, add the overall equities increase to the increasing population and the ongoing and planned future development to promise an exciting future for the region.