With 2013 now underway we thought we'd share our views for the year ahead.

We expect the global economy to remain challenging in 2013. The developed world faces continuing slow economic growth and ongoing government debt issues. Raising taxes and cutting spending are unpopular, so instead we see governments using other measures to get themselves out of their debt problems.

Central banks across the developed world are maintaining very low interest rates. These low rates will be with us for some time, with further reductions in the Australian cash rate likely in the coming 12 months. While this is good news for people with debt, for many retirees that have been relying on term deposits to fund retirement income needs, it may be a worrying time.

Our view is that investors will increasingly search for investments that provide them with yield but also provide some protection against inflation. The good news is that there are still opportunities in this regard. The bad news is that some opportunities have already passed us by. For example, we would caution against taking large positions in listed property, traditionally a higher yielding asset class.

We continue to recommend holding Australian and international shares. Whilst the dividends on these asset classes have fallen in recent times, they remain relatively high. Opportunities are there to invest in companies with strong balance sheets, cash flows and dividends. We are also optimistic that improved confidence will bring additional inflows to share markets, thereby supporting positive returns for investors.

In terms of fixed interest investments, good quality corporate bonds appear to be significantly more attractive than government bonds at present. That said, diversification remains crucial and we advocate a broad mix of fixed interest investments.

We appreciate how difficult you will have found the economic and investment climate over recent years. However although we could see a short-term pullback in share prices after a strong run in recent months, we believe markets will continue to move ahead during 2013.

Should you require further information please contact our office to speak to your adviser.