by Rob Hosking
While those returns are quite respectable, when put next to the 12 month figures – of 13.6%, 20.4% and 33.1% respectively – the trend towards more moderate gains is clear.
Looking back Hayward says: “All asset classes performed well and investor risk was truly rewarded with growth assets delivering a stellar performance.”
Going forward it is likely the US growth will continue to slow this year, Hayward says, as interest rate rises are expected.
“The US consumer didn’t tighten their belts after the slowdown in 2001…but they may be about to experience a slowdown.”
A currency adjustment is also likely, with the US dollar finally falling under pressure from that country’s continuing current account deficit.
The emergence of China is providing some counterbalance for the world economy with its exports rising 40% during the past year.
“The boom in that country is pumping out finished goods – which is keeping inflation low, and at the same time pulling in commodity goods.
“Commodity prices may me lo longer in a long term decline,” he says.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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