The past several months have seen a slew of political, market events and economic data, but not much has really changed in the world.
The uncertainty created by the Federal Budget (and exacerbated by the two month election campaign) looks set to continue for a further three years.
That would make it about nine years in limbo! With a double dissolution that was designed to dilute the power of minority parties and allow the Government to “get on with business”, it has, in fact, backfired and we now have what can be seen as a hung parliament and fractious Senate.
This creates the situation of the ruling Government having to horse trade with cross benchers and minority senators to get any form of policy through the parliament and will dilute the agenda they may have set for the country.
In and of itself, such a situation is neither bad nor good.
It means all Australians get a fair representation in how this country is managed.
What it does create though is a vacuum of policy and this makes it very hard for us as individuals or businesses to make decisions about our futures with any degree of certainty.
This is what stops an economy in its tracks.
When we have no clarity around tax policy, superannuation policy, trade or growth policies, we do nothing and growth can stop.
It does not matter how low interest rates go, momentum will not kick into gear until we have a clear direction that puts us on the path of sustainable long-term prosperity that benefits the whole country.
Add to this a British exit and an election in the U.S and it is no wonder people are confused. It is important to note though that the political landscape around the democratic world is short-term thinking at its best.
It is a system of political leaders wanting to get into power and staying there.
Underneath though we need to get on with life and deal with real world dynamics that are playing out, such as an ageing population and the rise of technology.
It is a time of excitement and opportunity as people around the world are becoming increasingly connected.
Information is shared instantaneously and we are moving very rapidly to a truly globalised marketplace.
For investors that means we have far more investment opportunities available to us than any time previously and wealth will be grown in strategies that use dynamic asset allocation and positions in markets that require highly specialised knowledge and technology.
We are very fortunate to get to work with some of the world’s smartest and most technologically advanced investment managers in this process, which we know will be the platform for success in the future.
As for the direction of markets, we can probably expect more of the same – volatility in returns but an upward trend over a long run timeframe.
It is difficult to be patient in today’s fast-paced world, however this is one aspect of investing that should not change if we wish to see meaningful results and change in our wealth.