Rebalance. Refocus. Prepare with Morgans Noosa
The world may be feeling unsettled at the moment. John Caruso learns what that means for your money and why now is the perfect time for a mid-year review.
Digest the news and it’s not exactly a gentle experience. Wars, rising prices, interest rate hikes, and financial markets moving in ways that would make your head spin. Whether you watch Alan Kohler deliver the numbers with his trademark calm, or skim the headlines over a morning coffee, it can feel like the ground is shifting underfoot. Which is exactly when you want someone steady in your corner.
Andrew Stafford and his team at Morgans Noosa are the go-to for local investors. They can translate the chaos of global markets into plain English. He’s the kind of bloke that knows what he’s talking about and the one you want at the table for a Sunday lunch when the conversation heads that way. I rang Andrew recently with a “please explain” and this is what he had to say.
“We’re in a complex phase of uncertainty,” he says. “We have the conflict in the Middle East which is causing global economic disruption, and that’s feeding through to Australia more than other countries because of our heavy reliance on imported fuel. The next six months will be very challenging for us regardless of an outcome to the Iran conflict.”
Not exactly the kind of thing you want to hear, but Andrew is not in the business of sugar-coating. He’d rather you understood what was coming so you could prepare for it. At the heart of the problem is the Strait of Hormuz, the critical shipping lane through which a significant portion of the world’s oil and gas flows. The conflict has disrupted those flows badly, pushing energy prices sharply higher.
For Australia, a nation that imports around 90 per cent of its refined fuel despite being a net energy exporter, that’s a real squeeze. It flows through to the price of transport, food, building materials and just about everything else. Add higher interest rates on top, and household budgets are feeling it from both ends.
So, what does that mean for your mortgage, your superannuation, and your investments? Quite a lot, it seems. On interest rates, Andrew points to something that many people may not have noticed. Australia is one of the few countries in the world currently raising rates, while the US Federal Reserve is holding steady. That divergence has consequences.
“As interest rates go up, that generally supports a higher local currency, so the Aussie dollar has been pushed higher, partly from the weakening US dollar, but also because we’re looking at going even higher with our rates,” he says. “You may see it push towards the mid-70USD range.
For investors, a stronger Australian dollar cuts both ways. It can reduce the value of returns on overseas investments when converted back to Australian dollars, but it also helps importers keep
a lid on costs. None of this is cause for panic, but it is cause for a close look at where your money is working, and where it isn’t.
Andrew is upbeat about certain sectors despite the headwinds. Commodities top his list. The rebuild required in Ukraine and the Middle East will demand enormous quantities of raw materials. Defence spending across the globe is rising fast and the worldwide boom in data centres to power the growth of artificial intelligence is creating enormous demand for copper, energy, and the infrastructure to support it all.
“We certainly see an upside for commodities, from multi-year investments in energy transition, the big data centre build-out around the world on this AI phenomenon, and major rebuilding in Ukraine and the Middle East, that alone should see significant demand coming through for resources,” Andrew explains. “Commodities is a place to be strategically focused.”
Gold, the traditional safe haven in times of uncertainty, remains on Andrew’s radar too. It has pulled back a little recently on central bank selling, but the broader case, inflation, geopolitical risk, a weaker US dollar, still supports it. Energy is another focal point. Higher oil and LNG prices benefit Australia’s producers directly and uranium is a conversation Andrew thinks will become increasingly important as the world scrambles for clean, reliable power to fuel the data centre boom.
Then there’s the AI story itself, which is more nuanced than most people realise. I’ll admit it took a previous conversation with Morgans Noosa to shift my own thinking on this. The assumption that AI is a single, homogenous threat to the technology sector is too simple. Some tech companies will lose ground to it. Others will benefit enormously from it. The recent broad sell-off in the sector has, in Andrew’s view, been indiscriminate, punishing winners and losers alike, and in doing so, creating some genuine buying opportunities for patient investors.
“Positioning your investments to benefit from the AI boom is super important. There’s a generational, once-in-a-lifetime build-out of AI infrastructure happening,” he says. “That’s something that over the next few years will continue to be a very big theme, and there are ways to invest in it to your advantage.”
The word Andrew keeps coming back to is ‘rebalance’. Not a dramatic overhaul, not a panicked retreat to cash, but a considered, timely look at what you hold, how it’s positioned, and whether it reflects the world as it is right now, rather than the world as it was twelve or eighteen months ago.
“It’s a critical time for clients to come in for a review. These factors have a major impact on asset values, and it’s important to address your current financial situation and prepare for the near term,” he explains.
Mid-year is a natural moment for that kind of stocktake. Think of it as a health check. You don’t wait until something goes wrong; you go in regularly to make sure everything’s tracking as it should. Your investment portfolio deserves the same discipline.
The team at Morgans Noosa are across all of it. Local, experienced, and as embedded in this community as anyone. If the news has been making you uneasy about your financial position, that’s not a bad instinct. It’s a good reason to pick up the phone.
Disclaimer: The information in this article is of a general nature. Please seek professional advice tailored to your specific circumstances before making any investment decisions.
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