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SMSFs warned on short-term dip for US equities

SMSFs warned on short-term dip for US equities

Miranda Brownlee
04 May 2017 — 1 minute read

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.

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“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.”

SMSFs warned on short-term dip for US equities
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