This means the bank continues to believe that the Reserve Bank of Australia will not be able to raise the cash rate from the record low of 1.5% until 2021 at the earliest.
In light of this, it looks like low interest rates are here to stay for the foreseeable future. As a result, if I had $10,000 sitting in a savings account I would consider putting it to work in the share market instead.
Three shares that I would invest these funds into are as follows:
Appen Ltd (ASX: APX)
Although its shares have rebounded strongly since October’s tech selloff, I don’t think it is too late to invest in this provider of human annotated dataset development services. Due to Appen’s exposure to the quick-growing machine learning and artificial intelligence markets, I believe it is well-positioned to continue its explosive growth for a number of years to come. So with its shares changing hands at 30x estimated FY 2019 earnings, I think they offer a compelling risk/reward.
National Australia Bank Ltd (ASX: NAB)
I think that National Australia Bank could be a great option for that $10,000 due to its exposure to the small and medium sized lending market. This year this market is expected to outperform home lending for the first time since 2011, putting the bank in a position to benefit greatly. In addition to this, with the Royal Commission final report due to be released in the coming weeks, I’m optimistic the dark clouds will soon lift and investors will be back to take advantage of its cheap shares and generous dividend.
Webjet Limited (ASX: WEB)
As with Appen, I think Webjet is a growth share trading on a very attractive valuation at present. This year the online travel agent is expected to continue its strong earnings growth with another solid full year result. Management advised that it expects full year EBITDA to grow by 26%, excluding the benefits of its recent DoW acquisition. I believe this and its solid long term growth potential makes its shares great value at around 18x estimated forward earnings.
Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of Appen Ltd and National Australia Bank Limited. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.