Your complete 2025 investment outlook

what everyone else is thinking. It's what everyone else is thinking is what moves markets, right. It's not what you think is going to happen to a certain share price, it's what everyone else thinks. So that's why you need to know the contentus even if it's wrong, and trust me, they're often wrong, but it's a major part of understanding the context in which you invest, and you need to know basically how to reset in any given years. So that's why we had a look at share markets and

shares and property so far in this series. And I hope you enjoyed those shows. I certainly enjoyed them. They were really good and we had really good people, I must say talking about the share markets, market individual shares. On the ASX we had June Bailleu and she of the ten group was very good on opportunities and risks, perhaps in our own market. Stuart William's covered off on property.

So you say, well, what's left. Whether we need to talk about cash, we need to talk about gold, we need to talk about bitcoin, we need to talk about alternatives, and I think, more than any thinks, we need to put it all together. What have we found out now, now now that we starting into the new twenty twenty five years, what do we know about the markets, what do we know about the consensus outlook? And what should

investors be expecting. To help me put all that together, I've got James Girard of Financial Advisor dot com dot you.

I'm sure you weren't working either, listener. The finally cut, if you like, of the AX was we did about eleven percent eleven and a half for the year, which is good. Okay, the long term average is tenth. That's pretty good. Of that, you know, four percent or sober dividends.

That was our outcome for the ASEX. And on the S and P five hundred being the sort of core US market, the representative Bellweather market, if you like, for the US, they did twenty three percent, which was extremely good, and they didn't fall off to the same degree that we did, which tells you perhaps once again that the US market, whatever is, if things are good, it tends to be twice as good as the ASEX. And that actually segues into the forecast that was offered by Mark Jokuns.

He said that US chairs should do twice as well in twenty twenty five as ASEX chares, and he meant that US chairs could do eight percent and we might only do four total return. That is, on both markets. It remains to be seen if that's ever going to come to pass. But James Girard, I imagine your most of the people on your books were pretty happy this year.

share markets are then come back. And also through some of Donald Trump's recent comments around Greenland, Canada, Panama, Camanal that sort of scared share markets a little bit around He's pending inauguration and coming into his presidency and depending on when you listen to this podcast in a week or so, which will be a testing time for share markets because everybody is looking at this as a weight and see type moment almost and I don't think I'm

overplaying this that the fate of almost everybody's pension fund depends on this one man and what he does once he becomes president in a week's time.

pro deregulation president. That's good for markets. That's why we had a great final quarter at the end of last year. Certain things I think we can safely say. ESG style investing is not just it's not just a less fashionable. It is in trouble because you have someone who is actively anti ESG, and there are anti ESG elements in the US state legislators, of course, been environmental, social, and governance issues. In other words, that's sort of investing ethical

investing for want of a better word, as defined. And share markets at least is in trouble, and that is very obvious now and they are rushing out of their responsibilities. In the US, A black rock is turntail on ESG having you know, bard us all silly with their ESG stuff for years. Facebook obviously been a spectacular example of a company that's just like in an extremely unimpressive way trying to curry favor with Trump by dropping the mediated content that it had promised for so long. You know,

really bad behavior there. But we're looking at it as investors, and the outcome of that is that shares US shares particularly have a win behind them, except for ESG shares. What about Because we've covered shares, so I want to ask you about a couple of other things, and the obvious one is gold. James, where do you sit on gold?

bit of a safe haven. So we're not sure what's going to happen with these geopolitical tensions that are happening around the world, and gold's used for injury and that's increased in demand as well over the past twelve months.

cost of living pressures that are going up. So let's sell half of it. So we sold half of it, which was great. We deployed it into bond style investments, picked up seven eight percent income there, and then the other half of the gold has gone up. So now we face this second point, which I'm saying this story because maybe some investors wire holding gold in similar positions, thinking what do I do now my goal. Do I continue to hold it hoping that the price goes up,

or do I sell it? And my suggestion would be to start to in a gradual way decreased the exposure. So every time it goes up another five or ten percent, sell a little bit of it if you can, so that you're averaging it.

etf we buy gold mining companies. But if just go for the simple approach of buying some physical gold, you also need to think about where you're going to store it and whether where you're storing it has insurance attached to it, or whether you need to go get your separate insurance policy to protect that that gold bar that you've just bought.

some physical gold. But the client just wanted to be dead certain that if everything went to crumbs, that they have a chunk of gold that can hack a little bit of way of to barter to survive, that they'd have those gold bars there.

How about the vault? Would they get into the vault on the day if they need to, etc. You could kind of go on forever with that. So that's something everybody has to figure out for themselves. But it's pretty interesting, and it's also interesting, James, you mentioned that it might be time to take profits on gold. That's an interesting point of view. I would tend to be fully bullish on gold again this year, as I have been last year and the year before, and I have it in

my own SMSF. I have it in the form of vtfs, and I see it at a hedge against Trump, basically a hedge against Trump's, a hedge against Trump's whims tendency towards chaos, and the fact that all elected officials have a honeymoon period and then it ends, and the Trump honeymoon period when it ends. I think gold could be a very useful acid in death context. That's very much a personal view. Okay, we'll take a break. We'll be back in a moment. Hello, Well, welcome back to The

Australian's Money Puzzle podcast. I'm James Kirby, Well, the editor at The Australian, talking to James Girard. This is the final episode of our outlook for the year. So if you recall in the first segment I laid out how the consensus is for the year ahead, pretty ordinary on Australian chairs, pretty good on American chairs, US shares. The consensus for property, such an important asset to our listeners, is also it's fairly mild, a national average of three percent.

That could move either way if you think about it. This year the national average that is twenty twenty four of the national average was four point nine. Which they're all key figures, James, But they're modest enough, really, aren't they. For property, it's certainly a period of it's a pretty mixed out look on every level, not just regionally but generally for property. What are you saying to people on their property holdings? What's your sort of default position at the moment on that?

But broadly, what I'm saying to clients is that I feel that what I'm seeing is my clients, particularly the ones in Sydney and Melbourne, with these one million two million dollar mortgages, they're starting to struggle. They're eating up into their officed accounts, their savings because a fair chunk of these people have gone from two percent interest rates to six to six and a half percent interest rates, and that's stopping them from upgrading their home, from in

buying investment properties. And so I just feel that we just once these rate cuts happened from the Reserve Bank, it will be this confidence boost because property markets run on sentiment, Mum and Dad sentiment in terms of buying and selling, and I think that once we just get that first twenty five basis points rate cut that the floodgates will open and the property markets will will go

back up. And I was really interested to hear she will talk about Melbourne in particular and all these property taxes and the tough time you guys have had over the past five to ten years with your market compared to Sydney ten property taxes, two new ones. Yeah, yeah, I hope you had lots of facilities and resources and things afforded for all these taxes that you've been slugged with.

and the property taxes are mounting. So there is indisputable evidence. Actually, Ria the Proper Track Group have provided evidence to me which I wrote about, that investors have been moving out of the state on the basis of those taxes, and very simply on the average year, on the average city or state in Australia, something like six percent of investors sell and in Melbourne it's running at nine percent, so basically a third higher than you would expect it to be.

So I thought between the line Stewart was saying that looking at the national market, he thought Melbourne, you know, had potential course as if you believe in cycles, but she does, then Melbourne. Is you your dollar invested in a metament might be better awarded than anywhere else, just now and properly, what do you think of that?

bad time with properties. But if I look more broadly around the country, my personal opinion is that it's a pretty hard time to buy investment property at the moment because we've had Perth go up a lot and although professionals like Stuart believe it will keep going up, my opinion is that we're not getting on the ground floor. We've already had a lot of growth in Perth. Some properties have gone up fifty percent, some have gone up

one hundred percent over the past five years. So you know, the question is how much more growth will there be before the market peaks? And Adelaide's a similar thing. Although it may continue to grow, we're not on the ground floor. And places like Hobart in Tasmania that had already peaked and started to fell. Places in Queensland you go to Brisbane and North and South, they've had fifty to seventy

percent growth over the past three years. Sydney's at record highs and so you have to sort of look further and broader. Do you go regionally? Do you go to Darwin, do you go to you know, I'd hate to say this, but Melbourne. Do we buy in Melbourne as well? We have to go to places that we wouldn't usually go to buy investment property these days.

of cash. It's all borrowed money. So where you have that type of typical situation and you're having to pay six and a half percent interest on the mortgage. Average rents in capital cities, the rental yields there are like three three and a half percent, so already you're a good three percent behind. Then you add your outgoings on top, which is typically another one percent of the property value.

So in short, the property's costing people around seven seven and a half percent, but they're only getting three three and a half percent income. So that difference of that circle four percent they need to pay out of their own pocket, so it's a good saving grace that we have the negative gearing system here in Australia, which has been useful in the past three years after the thirteen interest rate rises we've had.

for rates to fall. The market is challenging enough in that the figures sound good on average, but there is soft spots, particularly in the larger cities, particularly in the inner city apartment markets and the outer suburban regions of

those larger cities. So if you are considering this year, folks getting into property or extending property that you own, the bias towards home standalone houses remains strong and remains advisable I think in many ways because I can we can see that the property the inner city apartment markets particularly are the weakest spot. We'll have a look at this in this closing segment. In a couple of moments, we'll take a break and we'll talk about opportunities and

threats for you in the year ahead. Hello, welcome back to The Australian's Money Puzzlive podcast. James Kirby here with James Girard. So, James Girard, when we look ahead this year, it's not easy, but have a goal. Tell our listeners what do you think. Let's talk first of all about where the danger points are there, but what might be the obvious danger points in a divers portfolio that most of our listeners have.

but that's because people are just hanging on. But another couple of months and I think that we could start to see things turn bad. So we really need to see those rate drops. That's a key thing in Australia, and then that will mean that everything will be fine, I feel for the Australian economy.

come off in any way. The other sort of scenario, which perhaps is more likely, is Trump being, if nothing else, a clearly pro business politician will seek to prolong the power, if you like, of US markets and the US exceptionalism, as they say. But the manner of doing that, he may well stoke inflation way very well. I think it's likely he will stoke inflation. I think it's likely that

they will not be able to cut rates. It was a big call anyway that the US could be cutting rates while they had a president that was basically lighting fires under the engines of US business. And so the likely outcome perhaps is that the US market overheats and that inflation re peers as a real problem in the US.

And there's the signals of that already just now these weeks on the markets, as we see that these expected US fed rates that James mentioned at the start of the show, that you know, they were seen us to be they were seen us for sure at the end of last year, and now they are not for sure at all, and they may never come, and that would change the whole nature of global markets. So keep that in mind.

the US markets. And all these markets are interlinked. That's the thing I think that's so important these days to keep in mind, folks. Markets are so interlinked with over the LA bushfires on radio this morning, and you know there was a time where the l bushfires would have

been a distant matter. These days, with reinsurance scale and scope of the LA bushfires will play straight into the Australian market because of the reinsurance costs, because they lay their risk off here and we lay our risk off there. So everything is interconnected, and the US is this sort of locomotive of old market. So that's why James is saying to keep an eye on it. Okay, they are

some of the more obvious threats. Just to drill down a little bit deeper on that, James on the local shares and as jun Bee Lu made this point more than once in her segment on the show, that the banks can't possibly do that again. You can't expect Comwell Bank to go forty five percent again next year, and

you can't expect them to carry the whole market. So it's pretty obvious then that the financial stocks in our market would seem to be not a threat, but you couldn't possibly expect them to do as well this twenty five as they did in twenty twenty four.

I think that will start to see investors take profits from the banks move into the resource sector. But overall, I think that the AX will have a pretty stable twelve month period, which is in line with what the others have been saying, and.

Not just that banks carried everything, but banks carried everything despite the fact that all institutional investors said that they would not do that, and that there was sell notes.

recovery in good industrial shares, even health care shares. There is some possibility and that they were off the boy last year it stocks of course went very strong along with banks. Not as important on a market cap basis, but important nonetheless, and so you can't expect them to do quite so well next year, you would think history would suggest. But in terms of opportunities, you have those industrials,

you have industrials, you have resource stocks. What about rets games you mentioned in passing there in the first part of the show you mentioned reats Australian property trusts starting to see a few pieces suggesting you know, the worst is over for them. Maybe the worst is over for them.

rates and also the financing of the rates. A lot of them have gearing of anywhere from thirty to fifty percent in their portfolios to acquire these commercials, properties and interest rates are quite high internally in these reats to finance their debt, and that will come down which will improve their yields as well. There's some tail winds there, as I would say for the reads, and so that's

an area that I'm positive on. And just finishing my comments on the resource sector, they're one thing I forgot to mention, which is both a risk and an opportunity is China and that linkage to our Australian market. So there's different interconnecting pieces. You have the US there, what are they going to do with tariffs and trade walls with China? And then what's the Chinese economy going to do with stimulus to sort of get their engine up

and running again. And then how does that impact the Australian market given that iron ore is a big export that we center to China, And so if I look into that, Crystal Board says that China keeps stimulating their economy they get it back underway, which is great for

the resource prices. And then if I just look at a couple of different of the mining companies in Australia, so BHP about fifty percent of their profits comes from iron ore, forty few metals is really heavy iron about ninety percent of their revenue is from iron ore, and then Rio Tinto is about the same as HP fifty sixty percent of their their profits. So if you wanted to go heavy on that China theme resource sector, you

go forward Skew. But if you want to be more diversified, you go for BHP or Rio Tinto.

percent in the calendar year twenty twenty five. So if you want to talk about opportunities, I'm not suggesting you do this, but I'm telling you that the most powerful stockbroker in the world, investment bank, Gorman Sacks, has come out this week with estimation that China stocks will lift by twenty t which would suggest that China obviously is going to turn this year, which would suggest that the idea of resource stocks in the Australian market would be

a good call. So let's see if that turns out to be true. Certainly worth keeping in mind before you go, James Bitcoin, you are among our guests on the show. You have been someone who's always made sure you're in on bitcoin through thick and thin. Where do you stand after an extraordinary year? I think it was the single most successful acid class, and I think we have to call it an acid class these days, whether we like it or not.

it's going up. I don't want to miss out. But then you have to think, well, the people that bought when it was much cheaper than what it is today, they're probably going to start selling out and taking their profits, and you're coming in to buy to sort of cash them out and let them have that five six hundred percent gain. So I would say it's a high risk, high lost, high potential gain type investment, and it's probably

where a small dabble in there. The way that you can do it is you can either just set up an exchange account with one of the exchanges. You just need to be careful because they're not really regulated. Regulation is coming in from the Australian government on this on exchanges, sort of like with the places where you go to buy cryptocurrency, but still emerging, so be careful who you use to set up with. And then you can buy a bit of bitcoin, which is the big staple, and

then you can spread money. And one thing which I suggested recently in the Australian last weekend in the Wealth section was that you can look at this averaging situation where you go, all right, what are the biggest twenty cryptocurrency coins. I don't really know the difference between Stellar versus ripple and what they do, why they go up and while they go down, but I want a piece

of the action. So it might be to spread five or ten thousand dollars and put five hundred dollars in ten or one thousand dollars in twenty or something like that, just to get a bit of a spread exposure because it's just so hard to figure out why they go up and down, even though I follow them quite closely. You need to really understand a lot of technical stuff, which I don't do, and I don't think most people do either. I think they're really just following crowds and forums.

for the best. Yeah, Well, buying everything and help for the best, hopefully for the best is probably a very good, probably a very good disposition to have an investing It's one thing A very clever person who I worked with one time and who had a PhD in the treatment of time in Shakespeare please, was also stockbroker at one stage, very very Eridivepresson said to me one time, and I've never forgotten it, and it's probably a good thing for

looking ahead for the year. About being an investor, he said, the main thing is to be the same. If you're going to be bullish, always be bullish. If you're going to be bearish, always be verish, just don't.