SMSFs warned on short-term dip for US equities
While the longer term projection for US equity markets remains strong, one economist has warned SMSF investors there could be a correction over the next few months.
BetaShares chief economist David Bassanese says the US equity markets have had a strong run since Donald Trump became president and valuations are now highly priced.
“I think there’s still a risk of some disappointment in the short run in terms of what Donald Trump can deliver and so equity markets are still at risk of a correction over the next one to three months,” Mr Bassanese said.
“You’ve got the Federal Reserve still looking to raise interest rates so that’s going to put pressure on valuations which are already high.”
In the long-term, however, Mr Bassanese said he expects the US economy to continue to have solid performance with earnings growth still surprising on the upside.
“I think it would only be a relatively short run – a 5 or 10 per cent correction within a bigger picture equity bull market.”
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.