The Australian Share Market eked out a positive annual return for 2016 Financial Year. The All Ordinaries Index finishing up only + 2.0%, largely due to the income contribution from dividends. Our share market is currently trading at a forward looking price to earnings ratio of 15.8x (relative to long term averages of 14.2x) with an average trailing dividend yield of 4.6%.

Brexit uncertainty and seasonal September quarter weakness could see more volatility in global share markets in the short term. The messy Australian election outcome is also likely to weigh on Australian shares in the coming weeks. However, beyond near term uncertainties, we still see shares trending higher this year helped by poor returns in cash and bank deposits, relatively attractive equity valuations, very easy global monetary conditions and continuing moderate global economic growth.

The following article by Shane Oliver, Chief Economist at AMP, takes a look at the Federal election result and implications for investors.

Please click here to read the full article.

As always please feel free to contact us if you would like to discuss how current events may impact you in greater detail.