The combination of a flat economy and a sideways stock market means it is hard for investors to get a handle on “big picture” themes, says Prime Value Asset Management.
With Australia "unexciting" from the top down, it has been difficult for investors to get a read on the future direction of the market, said Prime Value Asset Management chief investment officer ST Wong.
The gap between the best and worst performers in the Australian stock market is widening, said Mr Wong – and is largely down to the "unexciting" nature of the current market.
"It’s a potentially dangerous market for investors because finding big picture investment themes has become harder," Mr Wong said.
Currency movements could be one of the main drivers of stock prices in the near-term, he said.
"We’re seeing many currency-related moves, for example BHP moving up over $26 after being $22 a few months ago. This move reflected the weaker greenback," Mr Wong said.
"As global central banks move toward a tightening phase, this is impacting currency. The challenge for investors is that currency is incredibly difficult to predict.
"If you don’t have strong big picture investment themes, and currency is having greater influence, it follows that you will see pockets of good and bad on the market."