The Australian economy has had the correction most economists saw coming. From the July high there really was only one way to go. The question on everyone’s lips at the moment is whether this is simply a short-term correction or an indication of something much bigger?

Economists are concerned at the continued slow growth in key economies around the world, such as china and Europe. Geopolitical fare-ups, like ISIS in Syria and Iraq and the Ukranian- Russian standoff add to the tension. Such incidents create unease on the markets as interruptions to domestic production reverberate through global markets.

At home there is continued concern over the overvalued dollar and ballooning property market; both of which are creating financial stress for many Australian businesses and households.

If all this wasn’t enough, think about the somber predictions from the International Monetary fund. In September they released their World economic Outlook; global growth forecasts were down 3.3 per cent for 2014, 3.8 per cent for 2015. This gloomy forecast was based on poor performances in the global economy during the first half of 2014.

What needs to be remembered, however, is that Australia has the momentum of 24 continued years of economic growth. Even during the darkest days of the GFC we still posted positive figures. This stability is very attractive to investors. And the federal government has shown that it is prepared to be careful about the amount of foreign investment it allows.

The domestic share market has also been performing well in recent years. Fund managers have led the charge and reported back to investors with healthy returns the last three years.

So while the correction is not something anyone likes, it’s something that’s been expected.

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