Barefoot Investor Scott Pape warns every Aussie to do one thing now trends now
Barefoot Investor Scott Pape has issued an urgent warning that Australia is heading into financially 'treacherous waters'.
Writing for his recent column, Mr Pape pointed to a comment from Oaktree Capital Management co-founder Howard Marks, who is also a well-known finance writer.
'He's so influential that Warren Buffett says that whenever Marks writes anything he stops what he's doing and reads it immediately,' Mr Pape said.
Scott Pape noted a well respected financial figure has forecast a major economic 'sea change' is on the way
He noted that late last year, Mr Marks wrote about an economic shift that could massively change the financial landscape.
Mr Marks wrote that: 'In my 53 years in the investment world, I've seen a number of economic cycles, pendulum swings, manias and panics, bubbles and crashes, but I remember only two real sea changes. I think we may be in the midst of a third one today.'
Mr Pape said the 'sea change' he is referring to is sustained higher interest rates.
Australia has seen a prolonged period of falling and low interest rates since their record high of 17.5 per cent in 1990.
'As a consequence, many people still believe that interest rates of 2 per cent are normal. They are not,' Mr Pape said.
He said inflation has put an end to Australia's economic 'smooth sailing'.
The Reserve Bank has delivered 11 consecutive cash rate hikes in a little over a year, with economists divided on whether another will follow later today.
'Inflation in Australia has passed its peak, but at 7 per cent is still too high and it will be some time yet before it is back in the target range,' RBA governor Philip Lowe said of the last hike.
Mr Pape said the rocky financial outlook could be set in.
'We'll soon be moving into much more treacherous waters... You need to understand
