Economic growth indicators across much of the world remain strong, he said, which is a positive sign.

“Although it softened a little earlier this year, the JP Morgan-Markit Global Composite Index edged higher in April, and still remains at fairly healthy levels. While European and Japanese growth have slowed somewhat so far in 2018, this is coming off the back of what seemed unsustainably strong growth in late 2017.  Meanwhile, US economic growth has remained firm, with consumer spending especially picking up in recent months after a slow start to the year,” he explained.

Europe and Japan may have greater potential for growth than the US, he said, and their central banks are likely to retain expansionary monetary policies for longer.

“As for Australia, the overall market may well continue to lag global peers given the rising regulatory risk and slowing credit growth now facing our all-important financial sector,” he warned.

Resource stocks in Australia, he added, remain at the mercy of iron-ore prices, which appear to be trending gradually downward as China moves to wind back excess steel-production. 

“Interestingly, outside of the top-20 stocks in the market, the smaller to mid-cap parts of the market, have been posting reasonable performance,” he said.

“Given rising tourism, strong growth in construction and health-related services, it may pay Australian investors to seek growth opportunities in this more dynamic part of the market.”