The outlook for one-year returns in equity markets
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Sovereign Advisors Principal Advisor Zaheer Lalani and Investment Manager Max Riaz reflect on the likely trajectory of markets over the next 12 months, with a focus on the United States and Australia. Max emphasises that markets are often emotional in the short term but rational in the long term, guided ultimately by earnings. Looking at historical presidential cycles as a framework, he notes that first post-election years tend to be positive, even amid policy turbulence. Trump’s extensive use of executive orders is highlighted, but despite uncertainty, investment banks are forecasting around 11% growth in the S&P 500, and Max shares the view that 2025 should be a positive year for US equities.
Turning to Australia, Max points out that growth is closely linked to China’s performance, with commodity giants like BHP and Rio affected by Chinese demand. Domestically, however, he expects momentum to build as the Reserve Bank moves through an easing cycle and governments at both federal and state levels inject significant spending into welfare, health, education, and infrastructure projects. Initiatives such as Sydney’s new airport are cited as stimulatory drivers.
Overall, Max anticipates moderate but steady growth in Australian equities, supported by dividends and domestic consumption. While past trends suggest markets can be softer under Labor governments, he argues that organic drivers such as rate cuts and ongoing fiscal spending should keep returns positive, around 8%.
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Source: Finance News Network
