Oliver's insights: Medium term investment returns face five key constraints

The key points are:

  • Five mega trends still point to risks of a more inflation prone/lower growth environment than pre-pandemic.

  • These are: a move away from economic rationalist policies; the reversal of globalisation; rising geopolitical tensions; climate change and decarbonisation; as well as slowing and aging populations. A productivity boost from artificial intelligence should provide some offset though.

  • But taken together and along with rich share market valuations this will likely constrain medium term superannuation returns, potentially to around 5% pa.

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