Ignore political rhetoric, says AUI



Investors have been urged to drown out pre-election market speculation that puts logical, long-term investment choices at risk.
Less than two weeks out from the Federal Election, the market is cluttered by politicians and commentators focused on short-term economic uncertainties, Australian Unity Investments (AUI) head of portfolio management Edward Smith believes. “Unfortunately, such commentary can get in the way of investors making sensible decisions about their long-term needs,” he added.
Smith said getting caught up in the excitement of rhetoric and promises could lead to poor decision-making.
“Investors need to learn not to be distracted or influenced by the sort of short-term issues that politicians usually focus on, such as economic predictions for next year or the year after, or even short-term regional issues,” he said.
“What pundits believe could happen in the next few years is typically already priced in financial markets. The rule of thumb is that if a statement or policy seems certain, then it has already been taken into account in the price of an investment.”
Smith said a more sensible approach would be to encourage investor optimism and diversified portfolios.
“Long-term investors need to ignore such actions and reactions, and shouldn’t feel any pressure to make quick market judgements themselves.”
Recommended for you
Magellan has closed out the financial year with funds under management approaching $40 billion and outlined its estimated performance fees.
First Sentier Investors chief executive, Mark Steinberg, is set to depart the asset manager after seven years.
Metrics Credit Partners has completed the acquisition of Taurus Finance Group and BC Investment Group as it looks to launch consumer lending arm Navalo.
AMP has announced to the ASX that it is being sued by property fund manager Dexus regarding the sale of its real estate and domestic infrastructure equity business.