Economy

Economies in Europe and the US will continue to limp along at best. We’re still concerned that the condition of the PIIGS (Portugal, Italy, Ireland, Greece and Spain) will deteriorate and more will have to be bailed out.

… there will continue to be a great deal of social unrest in Europe as they adjust Government cutbacks to reduce debt.

… official interest rates will keep rising and be 5.5-6 per cent by the end of the year. Although a crack in China or a Europe-led financial crisis will dampen rate rises.

… The economy should maintain a 3-3.5 per cent growth rate, inflation will spike on food and oil price rises, unemployment will stay low and the skills shortage continue.

Shares

Major stocks are trading on pretty high multiples at the moment and will have to produce decent results to maintain these levels.

… If commodity prices start to ease and resource companies begin issuing profit downgrades then we could see the market under increased pressure.

… solid but unspectacular 2011

… the key will be sticking to solid companies with strong cash flows and good management.

… Good dividend yields will be a real bonus.

Property

We think there will be a slight easing in values, without a crash, this year but it will certainly be a buyers market.

… Prices will be under pressure in 2011.

Australian Dollar

Global investors see the Aussie dollar as providing good investment exposure to the commodities boom and to Asia.

… see the currency continuing to appreciate for the next couple of months and then ease in the second half of the year to finish in the low 90 US cents.