Hi Rob, great question, but I’d generally rather stay away from making predictions on markets, as they could be misinterpreted by some as financial advice.

However, I just received this interesting forecast from VanEck portfolio manager Cameron McCormack, who reckons the ASX 200 could finish the year at 8,300 — up from the current levels around 7,600.

“We see Australian mid-caps as being the star performer this year, outperforming the S&P/ASX 200,” he tips.

“Smaller companies offer more upside potential through market share expansion and have historically outperformed in prolonged market recoveries. Valuations are attractive with 12 month forward price to earnings below the historical average. Mid-caps also reported the highest upside price target revisions during the February earnings season.”

However, he’s not such a fan of the banking sector, especially at current share prices.

“The market seems to be pricing a dream scenario for the banks, despite the risks of a flare-up in mortgage stress in a prolonged higher interest rate environment,” he warns.

“Australia’s banks are overvalued. Valuations are stretched and are the most expensive globally. Australia’s banking sector is vulnerable to a correction and investors should be wary if they are overexposed.”

Mr McCormack is also upbeat on commercial and office real estate, with many trading at low valuations due to the work-from-home trend continuing post-COVID. He thinks office occupancy rates are stabilising and may turn around.

“A paradoxical dynamic is likely where Australia records a soft landing but mortgage stress increases as rates stay higher for longer, further squeezing household budgets,” he continues.

“However, Australia’s migration surge will support retail spending and therefore consumer discretionary names such as Wesfarmers, JB HiFi and Super Retail Group. The sector reported strong net beats during the February earnings season and we anticipate this to continue.”

And, Rob, as for gold, Mr McCormack is again bullish.

“We see gold going to US$2,600. Meanwhile, gold miners trading are at a 50% discount to gold, presenting a strong value opportunity,” he writes.

“Persistent inflation, potential bumpy economic path and heightened geo-political tensions could serve as a tailwind for gold miners.”

Of course, this is just the view of one analyst and there will be plenty of others out there with very different opinions.