The marathon election is finally over with Julia Gillard becoming the first elected female Prime Minister for Australia.  However it remains to be seen if the Labor-Green-Independent coalition can function effectively as a government. Although it is very early days the varied competing interests and concerns of the people and parties forming this minority government will make it difficult to govern effectively. Although the PM has committed to a full term of government the probability is that we will see another election some time in the next 18 months. In the meantime investors have no choice but to proceed under the assumption that government initiatives around the implementation of the resources tax reforms and shake up of the superannuation and investments industry will proceed. However it is questionable given the political situation whether any reform legislation will be passed.

Concerns about the broader global economy and particularly concerns about US economic growth continue to worry investors. Expectations for global economic growth have been downgraded in recent months driven by a slower than expected recovery in the US and concerns about the possibility of a double dip recession. The growth remains slower than expected and the US housing market remains under pressure. China overtook Japan as the world’s second largest economy...

...For my money I continue to steadily acquire quality shares and I am constantly on the lookout for investments that can further enhance the diversification of my portfolio.









Michael Lannon
Managing Director