May 2026 Letter to Investors

John Abernethy’s Expert Insights. Get your FREE download now.

  • Understanding Today’s Macro Turning Points
    John Abernethy explores the forces reshaping global markets, from energy shocks and inflation to shifting bond yields and geopolitical risk.
  • Challenging Assumptions About Growth and Valuations
    Why high equity valuations, rising debt and changing inflation dynamics demand greater caution from investors – particularly in Australia.
  • Investing for Resilience and Income
    Practical perspectives on building portfolios anchored in quality, diversification and sustainable cashflows in an uncertain environment.

 

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    John Abernethy's Key Highlights May 2026

    The Risk-Free Rate Reset

    The traditional concept of a “risk-free” return is being challenged, with bond yields no longer properly reflecting inflation or risk, distorting asset valuations.

    Rising Stagflation Risks

    Global markets are facing a period of low growth and rising inflation, driven by energy shocks, geopolitical conflict, and supply chain disruptions.

    US Dominance Under Pressure

    The US remains the global financial anchor, but rising debt, weakening currency strength, and bond market pressures are creating long-term structural risks.

    Shift to Quality and Sustainable Yield

    With asset prices inflated by excess liquidity, investors must prioritise capital preservation, transparency, and reliable income over speculative growth.

    About the author

    A lifetime of experience

    John Abernethy is the founder of and Director of Investments at Clime Investment Group and has over 40 years funds management experience in Australia.

    He is also a director of WAM Research Limited and Jasco Holdings Limited. John was General Manager of Investments at NRMA.

    John holds a Bachelor of Commerce (Economics)/LLB from the University of New South Wales.

    We help Australians truly understand, manage, and expand their wealth

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    Global Economic Resilience

    Despite challenges, the global economy remains strong, driven by consumer demand and adaptive businesses.

    Emerging Market Opportunities

    Emerging markets offer significant investment potential due to their growth and global integration.

    Monetary Policy Adjustments

    Central banks are carefully balancing inflation control with economic growth, leading to nuanced policy shifts..

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    This week on *The View*, Clime Investment Management Managing Director Michael Baragwanath and founder John Abernethy unpack what they see as a major missed opportunity in Australia's Census. From healthcare waiting lists and skilled worker shortages to telecommunications and infrastructure, could the Census be doing more to identify the problems actually affecting Australians? Michael and John also break down the biggest developments across the Australian and global economy, including interest rates, inflation, Australia's housing market, bank earnings, US government debt, the Japanese yen and the outlook for gold. **In this episode:** • The economic problem with Australia's Census • Healthcare and skills shortages • How Census question design can influence results • Australia's interest-rate outlook • Housing affordability and property prices • CBA and Australian bank earnings • America's enormous government deficit • The Japanese yen and quantitative easing • Why gold matters for Australia • South Australia's AI Royal Commission Subscribe for more weekly analysis of the Australian economy, markets and investing from Clime Investment Management. **General information only. This content does not constitute personal financial advice.** 00:00 Australia's Census Has an Economic Problem 00:44 Is the Census Asking the Wrong Questions? 01:07 Healthcare, Immigration & Australia's Shortages 01:26 The Data Australia Should Be Collecting 01:47 Can Census Questions Influence the Results? 02:04 The Religion Question Experiment 02:47 Should Census Questions Be Randomised? 03:09 The Japanese Yen Keeps Falling 03:45 What Japan Did Differently With QE 05:10 America's Massive Deficit Problem 05:42 Australia's Government Spending Problem 05:59 What Happens Next to Interest Rates? 06:42 Australian Company Earnings 07:04 What's Happening to the Housing Market? 07:26 Australia's Housing Affordability Crisis 07:46 Is CBA Overvalued? 08:04 What's Going On With Telstra? 08:47 Australia's Next Major Company Results 09:08 Could Australian Property Fall 14%? 09:32 Major Changes Coming for Bank Hybrids 09:49 The RBA's Inflation Problem 10:46 Why Gold Matters for Australia 11:23 Should Australia Accumulate Gold? 11:45 South Australia's AI Royal Commission 12:18 Final Thoughts #australia #census2025 #australianeconomy #investing #property #rba #interestrates #inflation #asx #markets #clime
    Australia’s Census Has an Economic Problem..
    In this episode of Baronomics, Michael Baragwanath tackles one of Australia's biggest economic problems: housing affordability. Australian property prices have exploded over recent decades, leaving millions wondering whether younger Australians will ever be able to afford a home. But what if the conventional explanation for the housing crisis is wrong? Michael challenges the argument that Australia's property boom can simply be blamed on John Howard, investors or wealthy Australians. Instead, he explores how decades of cheap credit, low interest rates, dual-income households, population growth, planning restrictions and increasingly expensive housing standards transformed the property market. He also examines New Zealand's property downturn and explains why falling house prices don't necessarily make housing more affordable — especially when borrowing costs and lending standards tighten. Michael argues that Australia needs to focus less on destroying property values and more on making housing cheaper and easier to build — including smaller homes, modular housing, studios and other affordable entry points. In this episode: What really caused Australia's housing boom Why blaming John Howard misses the bigger picture Cheap credit and the property explosion The impact of two-income households Migration and housing demand Australia's planning and development problem What happened to New Zealand property prices Why falling prices don't guarantee affordability Why young Australians are being locked out What Australia could actually do to fix housing Subscribe to Clime Investment Management for more episodes of Baronomics. 00:00 Australia's housing problem 01:02 Why we're focusing on residential property 01:54 Did John Howard cause Australia's housing crisis? 03:00 Why young families can't afford homes 03:38 Houses have fundamentally changed 04:16 Australia's missing housing entry point 05:02 Are wealthy investors really responsible? 05:24 The real impact of globalisation 06:37 Cheap money changed everything 08:19 How two-income households pushed prices higher 09:32 Families are getting smaller 10:49 Migration enters the equation 11:56 Why supply isn't responding 12:41 Regulation and development costs 14:10 How Australia could create cheaper homes 15:17 The social housing problem 16:30 Australia's infrastructure bottleneck 17:31 Have we overregulated housing? 18:11 Why Australian house prices may NOT crash 19:12 Why sellers simply stop selling 21:10 A housing crash doesn't guarantee affordability 21:35 What happened in New Zealand 23:15 Falling prices can actually make affordability worse 24:35 Who benefits from a property downturn? 25:08 How Australia could actually fix housing 27:35 Migration and property demand 29:49 What REALLY caused the housing crisis 31:14 Why taxing property won't fix affordability 33:22 Australia forgot about the family 33:56 The solution to Australia's housing crisis 34:43 What's coming in Part Two #baronomics #australia #housingcrisis #propertymarket #australianproperty #houseprices #costofliving #economics #property #realestate #interestrates #inflation #housingmarket #firsthomebuyer #australianeconomy #migration #investment #clime
    Is Australia’s Property Market Heading for Disaster?
    The Relationship Between Supply and Inflation

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