Share market wobbles – what are the negatives and positives?

In its latest “Oliver’s Insights” report, AMP’s head economist Dr. Shane Oliver says that to navigate share market wobbles, AI bubble worries and uncertainty about central bank rate cuts he recommends investors focus on assets that generate consistent income and resist reacting to short-term noise by remaining focused on long-term goals.

Oliver points to several risk factors: geopolitical uncertainty, tariff tensions (especially given U.S. trade policy), and stretched share valuations. These headwinds, he warns, could drive higher volatility — and possibly a 15% or more correction in share markets.

Oliver believes that long-term investors should remain committed to their strategies. He argues that share pullbacks are a normal and healthy part of the market cycle — and that selling after a fall may lock in losses.

On returns, his medium-term forecasts are tempered: future growth for a diversified portfolio is now projected to be lower than historic norms. The constrained outlook reflects a “megatrend” mix: ageing demographics, geopolitical risk, less globalisation and subdued capital growth.

To navigate the risks ahead, Oliver recommends that investors focus on assets that generate consistent income, such as dividend-paying equities. He also stresses the importance of managing emotion: investors should resist reacting to short-term noise and remain focused on long-term goals.

Read his full insights here.