Australians urged to invest in 'safe' term deposits
Australian savers and investors have been advised to consider safer options for their cash such as term deposits.
Richard Gibbs, global head of economics at Macquarie, argued that while the commodities boom and rising trade with China had served to protect Australia from the worse effects of the global financial crisis, such economic trends might not last.
Indeed, he warned investors that China will increasingly look to Africa and Latin America as alternative sources of crucial commodities in coming years, adding that a slowdown in Australia's mining sector would have a disproportionate effect on the economy.
"In the same way the gains in China were magnified in the Australian economy, any losses in China will be magnified. It is a double-edged sword," he told the Sydney Morning Herald.
Mr Gibbs therefore suggested that investors compare term deposits and consider other safer options such as companies with good cash flows in order to offset the impact of such trends.
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