The investing life looks set to become a little more difficult. Schroders’ Martin Conlon feels that it might be time for investors to take a lead from Steve Jobs and ‘Think Different’.

Expectations for 2022 are difficult to pin down as volatility continues due to uncertainty from COVID as well as high valuations. We take a look at the year ahead for Australian equities.

Along with Nick Kirrage, co-head of the Global Value team, Schroders Head of Australian Equities Martin Conlon discusses 5 notable investment themes for equities in 2022.

If the past decade in equity markets has taught us anything, mispriced money has resulted in some deeply ingrained beliefs and behaviours that are now unsustainable.

As central banks continue to justify market interventions that are covering up some outrageous valuations, Schroders are positioning their portfolio based on economic rather than market value.

Investors’ ongoing love affair with capital-light businesses continues unabated in a giant game of pass the parcel with highly inflated assets – but it’s hard to see when the music will stop.

While assuming markets will revert to the mean is not always a sensible strategy, investing on the assumption that supply/demand imbalances will continue indefinitely makes no sense either.

Australian companies have reported generally solid results as JobKeeper flows through to revenues, while central banks continue to pour fuel on the fire underneath asset prices.

Reasonable financial market returns masked a tumultuous year as investors continue to search for patterns in the market’s erratic behaviour. More surprises rolled in over December, with share prices oscillating wildly, commodity prices remaining depressed and cheap valuations overtaking business fundamentals.