Sorry Australia does not have a diversified economy...

Discussion in 'Investment Strategy' started by Ummm, 9th Oct, 2019.

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  1. Ummm

    Ummm Well-Known Member

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    Worthwhile consideration for how you structure your investment portfolio. Too many times I hear people justify the Australian economy as robust and diversified. Unfortunately this is wishful thinking at best, and in most of the conversations I have delusional. Consider what options you have available to diversify and protect yourself from an all eggs in one basket situation!

    Australia is rich, dumb and getting dumber

    Australia doesn't even make the list of diversified economies
    List of countries by economic complexity - Wikipedia
     
  2. Sackie

    Sackie Well-known cafe bum of the East Premium Member

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    At least unlike the USA, Australia doesn't have daily mass shootings, super high crime rates, a health system that will see you dead in no time and inner racial killings among our own people.

    Australia is quite stable, peaceful and many ppl from other nations wish to immigrate here.


    I think investments in Australia will do just fine.
     
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  3. PandS

    PandS Well-Known Member

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    What sort of diversification do you need if you got a few millions bucks, there are more than amble opportunities in Australia.

    This stuff get promoted by fund managers and money managers who wants to pocket fees and delivered very little return, I said there is absolutely no advantage investing outside Australia if you got less than 10 millions.

    I been investing all my life I don't see I missed out on anything, I wish I have more cash to invest in Australia
     
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  4. Trainee

    Trainee Well-Known Member

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    The list seems to be based on exports? So minerals etc would dominate. But australia is also a very small country by population with very concentrated cities. Even a small bit of diversification has outsized effects. California does nothing for michigan.

    According to that list the most diversified export country is japan. Do you want the japanese economy?
     
  5. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    I think it is probably a reasonable call about complexity. In Australia, we do banking, mining, real estate, agriculture and tourism - and we do them really well. A lack of diversification does not mean we can't exploit our comparative advantages and have a high standard of living. So I think the article is a but of an intellectual cul-de-sac.

    The United States and European economies are far more complex and diversified, true.
     
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  6. Ummm

    Ummm Well-Known Member

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    I've lived in the USA, yes those factors above exist, it is also a huge country with many great, and cheap, areas to live. I lived in what was supposedly a dodgy area and found it quite safe (although I wasn't walking in the dodgy areas late at night!). The US does a lot of things wrong, but also a lot of things right!

    It is important to understand where your investment risks lie, all I highlighted is that Australia isn't as diversified and robust as many people imagine. Always smart to look around for other opportunities!
     
  7. Ummm

    Ummm Well-Known Member

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    You don't need any diversification (out of Australia) if you have a few million dollars, provided everyone else is diversified. Unfortunately if everyone else dumps all their money in unproductive assets (housing) then the Australian economy becomes uncompetitive and you still have your couple of mil but it is worth less globally, which means because we aren't diversified we have to import products meaning everything costs your more and your millions can't purchase as much as it used to.
     
  8. willair

    willair Well-Known Member Premium Member

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    That's what you are going to see in the media for a while now an increasing number of bearish forecasts ..
    I only read a small amount of the dumb and dumber part,much the same as riding a roller--coaster everything seems good on the ride up until your poised at the top ,then think about that steep ride to the bottom again and the EWI in between..
    Beef exports to China run red hot
     
  9. jins13

    jins13 Well-Known Member

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    With all due respect, you are relying on pretty unreliable sources ie Wikipedia and for someone living outside of Australia.....
     
  10. Ummm

    Ummm Well-Known Member

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    The problem I see is at the moment we don't add enough value. Real estate, banking, mining a tourism is just ticket clipping on our natural resources, or lending money to bid up the value of what is already there..land. Agriculture does make improvements on the land, however it is quite cyclical and is really struggling at the moment with the drought.
     
  11. Ummm

    Ummm Well-Known Member

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  12. Ummm

    Ummm Well-Known Member

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  13. PandS

    PandS Well-Known Member

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    We are an export economy just like China in a different ways, we export agriculture, resource, education and energy and everything goes in cycle doesn't mater what economy you are in
    look at the US they have a recession once every 15 years.

    We are coming on to a 30 years boom so correction will come at some stage when and how who knows until then enjoy each day as it comes so our economy has done well for the last 30 years and it will continue to do so for many more with the odd down turn here and there.
     
  14. Trainee

    Trainee Well-Known Member

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    So its not good because its all in unproductive assets like property.

    But to those who have millions in net assets from this.....

    Smart preaching to the stupid. Again.
     
    Last edited: 9th Oct, 2019
  15. AndyPandy

    AndyPandy Well-Known Member

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    Food (agriculture), Housing, Entertainment (world-class tourism, wine), Education, Energy (mining and endless potential for solar)...list goes on.

    I don't see the problem.

    Please enjoy America.
     
  16. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    I hear you, but we are a very efficient economy. It is common to demean resource rich countries as unsophisticated in terms of value add.

    But if you compare two resource rich economies, say Brazil vs Australia. We have similar economic drivers, but Australia is wealthy and Brazil isn't, and it is due to the way we coordinate the economy around the resource extraction: our labour laws are better, our ports work better, our contract laws are better, our roads are better, our banking system is more efficient and allocates capital to the projects better. etc. You get the point.

    This is why is doesn't necessarily matter that the economy is uncomplicated, because we do what we do extremely well. Room for improvement of course.
     
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  17. Ummm

    Ummm Well-Known Member

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    I'm not in America, but I have taken the opportunity to live overseas. Australia is an ok place to live. So are many other places. I live in Australia at the moment. Gee lots of people too quick to jump on the US comment. How about some ability to critically analyse...that's how we as a country can highlight our weaknesses and look at how we can improve!
     
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  18. Gen-Y

    Gen-Y Well-Known Member

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    Is that you Heise ? @Ummm
     
  19. Gen-Y

    Gen-Y Well-Known Member

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    Don't kid yourself.
    We are just the lucky country that is just at the door step of Asia - The centuries of Asia is developing and we should take every opportunity to get the most out of it.
     
  20. Ummm

    Ummm Well-Known Member

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    There are a lot of people that fail to understand the structural changes that have enabled wealth in property and their millions. I caution the term smart and hope your comment is trolling rather than arrogance.