Investors chasing the rally should get ready for an ‘upswing’
Investing over the next six months will be difficult as we go through the final stages of the slowdown, but this is the time when you can also find stocks that are not yet priced for an improving backdrop in the bargain bin.
The Australian sharemarket is at an interesting crossroad. It has risen 2.3 per cent over the first half of the year, supported by myriad tailwinds including better than expected economic growth, falling inflation, expectations for rate cuts and resilient corporate profits.
To say that the market has climbed a wall of worry and gone against consensus expectations is an understatement. For most of the year, the macroeconomic narrative has pushed the view that equities have increasingly diverged from fundamentals.
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Jun Bei Liu is the founder and lead portfolio manager at Ten Cap. She formerly worked for Tribeca Investment Partners.
