Banking and resource stocks set for further volatility
Despite a slight rebound in certain resource and bank stocks last week, SMSF investors should be prepared for further instability in these sectors, UBS has warned.
Speaking to SMSF Adviser, David Sokulsky, the UBS Wealth Management Australia head of investment strategy, said that while ANZ and some of the resource stocks like BHP and Rio Tinto saw rallies last week, these markets have become incredibly volatile recently, therefore investors should be wary.
“Commodities obviously get thrown around with the price of oil, and the price of iron ore, and then you’ve got the banks which are getting caught up in the global banking sell off, which we’ve seen hit Europe in particular very hard,” said Mr Sokulsky.
The banks, he said, have also been hit hard by concerns about the housing market in Australia.
“Every time we’ve seen some of those big events offshore, and then the talk of Australian housing here, we’ve seen a lot of volatility in banking stocks and resource stocks,” he said.
“I wouldn’t say it’s a negative outlook for them, but investors need to realise they are increasingly volatile, and if they do invest in those sectors, they’ve got to be comfortable with that volatility.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.