November market & economy update: what it means for your money

Hello and welcome to your Novermber Market Update!

November was a shaky month for sharemarkets. After strong gains in October, US shares fell just over 3% and Australian shares dropped about 5%. The Australian market is now slightly below where it was three months ago. Global markets, however, are still higher than

they were a year ago. Large US tech companies continue to drive much of the growth, but there are concerns that some of the excitement around AI may be overdone. Markets were more volatile, and risky assets like Bitcoin also saw ups and downs.

There are several reasons for these market moves. In the US, share prices are high compared with company earnings, making some investors cautious. There is also uncertainty around how quickly central banks will cut interest rates. Other worries include tariffs, government debt and ongoing global tensions. On the positive side, many companies, especially in the US, are still reporting strong profits, and sectors like technology and infrastructure continue to grow.

In Australia, the economy is mixed but not worrying. Inflation came in higher than expected earlier in the year, which lifted the Australian dollar and pushed back expectations of rate cuts. The Reserve Bank has kept interest rates steady and signalled that any cuts may come later than hoped. Wages are growing at around 3–3.5% per year, and both business and consumer confidence have improved. In both Australia and the US, unemployment is still low by historical standards.

Housing remains a major topic. Australian home prices have hit new highs, and affordability is now the worst it has ever been. House prices compared to wages have more than doubled since 2000. Saving a 20% deposit now takes around 11 years for the average earner, twice as long as it did 30 years ago. Government schemes can help some buyers, but they can also lead to high levels of debt. The bigger issue is the long-term shortage of homes, especially in major cities. Fixing affordability will require better matching of immigration and housing supply, more building, and broader tax and planning reforms.

What to expect in the months ahead

Putting all this together, the picture for investors in the near term looks like this:

• Shares: Markets may stay choppy. High prices, concerns about an AI bubble and uncertainty around interest rate cuts could lead to more short-term drops. But if company profits continue to grow and economies avoid recession, shares can still trend upward over time.

• Interest rates and the economy: Central banks in Australia and the US are likely at the end of their rate-hike cycle. Rate cuts are still expected but may come more slowly. Business surveys and job data suggest slower but still positive economic growth.

• Property and housing: With prices already high compared to incomes and a significant housing shortage, affordability is likely to remain stretched. With no major efforts in place to boost housing supply, many investors continue to view property as a solid long-term investment.

For most long-term investors, the key message is simple: don’t stress about short-term market swings. Trying to time the market often leads to missing out on the recoveries. Staying diversified across shares, property, bonds and cash, and keeping your long-term goals in mind, generally leads to better outcomes.

As always, this summary is general in nature and doesn’t take your personal situation into account. If you’d like to talk about how these trends affect your own plan, just let me know and we can walk through it together.

If you have any questions or concerns, please feel free to reach out at any time.

Warmest regards, Josh