Isaac Poole from Oreana Financial Services shares his observations on the current macroeconomic trends that impact investment decisions.

Isaac highlights the enduring strength of the services sector, despite noticeable frailties in manufacturing, and explains the differences mainly due to historical economic cycles and sensitivity to interest rates. He explains the present positioning of the U.S economy stating it’s in a good state to avoid a recession. Yet, he doesn’t dismiss the possibility of a recession around the middle of next year should the restrictive monetary policies of the Federal Reserve persist.

Concerning rising oil prices from production cuts and weakening demand, Isaac suggests these strains might exert upward pressure on headline inflation. Isaac also calls attention to market overvaluation, a potential risk for equity investors. He proposes investors may want to secure their equities gains and shift to bonds for a safer option.

He also introduces the idea of incorporating gold into an investment portfolio as a diversifier amid fluctuating real yields.

(Source: Ausbiz)

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