BARGAIN BUYS

ASSET MARKETS MAY HAVE TAKEN A HIT, BUT THAT CAN SPELL OPPORTUNITY FOR INVESTORS | INCLUDES SHAREMARKET • FIXED INTEREST • PROPERTY • CRYPTOCURRENCY

- NICOLA FIELD

Australians are sitting on a mountain of cash. Collectively we have close to $1500 billion stashed away in deposits, and while interest rates are rising inflation is at multi-year highs.

So, while money in the bank can earn around 3% at present, inflation of 5.1% means the purchasing power of your savings is falling by 2% annually. It means now could be the time to put your money to work elsewhere – and potentially snare some bargains along the way.

Glen Hare, co-founder and financial adviser at Fox & Hare, says many Australians face the dilemma of where to invest. “People know they should be doing something with their savings, but that can be overwhelming,” he says. “Or people become so concerned about making the ‘wrong’ decision they make no decision at all. And that just means extra money ends up sitting in the bank.”

With this in mind, let’s take a look where investors can find value.

Sharemarket

It’s been a tough year for equities. The leading Australian sharemarket index, the S&P/ASX 200, is down 8%. In the US, stocks have lost 10% of their value since July 2021 and, more broadly, close to 14% has been wiped off global equities since mid-2021.

The upside is the potential for bargain buying. Mark McShane, financial adviser and director of Chrysalis Lifestyle Planning, likens the current situation to a department store sale. “Dips in sharemarkets can be viewed as a chance to pocket a generous discount.”

There are undoubtedly big savings up for grabs, even on the share prices of corporate titans. At the time of writing, Commonwealth Bank shares were trading at $97, down from $110 in late 2021. CSL is down to $286 compared with $319 late last year, and Atlassian is trading at $38, down from $48 in August.