In this episode, David is joined once again by Chris Joye, Chief Investment Officer at Coolabah Capital. They discuss the current state and future of various asset classes, including residential property prices, cash, and bonds. David and Chris also delve into the basis for the RBA’s 2-3% inflation target and its significance in forming their cash rate decisions.
Chris emphasizes the importance of liquidity, optionality, and risk management for investors, favouring cash and high-grade floating rate bonds issued by governments, banks, or too big to fail companies. He warns of potential disaster in commercial real estate and retains his prediction for a peak to trough correction of 15-25% in Australian residential house prices. Chris argues that booming asset prices over past years have been driven by cheap borrowing costs, which are now reversing, leading to a significant change in financial market dynamics. He also touches upon the Reserve Bank of Australia’s interest rate decisions, suggesting there may be a few more hikes to come.
With his contrarian views and successful track record, Chris provides valuable insights on navigating the market.
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