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Oliver's Insights - Review of 2010 and outlook for 2011

This note provides a review of 2010 and our outlook for 2011, both in terms of underlying macroeconomic conditions and investment markets.

The key points are as follows:

  • 2010 has been a somewhat disappointing year for investors, with a continuing economic recovery but various global macro scares resulting in a constrained and volatile ride for share markets and other related investments.
  • 2011 is likely to see global growth continue and this, combined with attractive valuations and easy money, is likely to underpin a renewed acceleration in the recovery in shares and other growth-oriented investments. This should see a return to solid investment returns for superannuation investors in 2011.
Key risks relate to the US housing market, sovereign debt in advanced countries and emerging market inflation. However, with shares cheap and so much liquidity around it's also possible that returns surprise on the upside after the consolidation of 2010.