ING Australia’s chief investment officer has pointed to four possible scenarios that will dictate strategy for the now wholly ANZ-owned wealth management entity.

Stewart Brentnall (pictured), who has started in the newly created position two months ago, said there were four possible scenarios post-GFC:

1. bull in the China shop
2. steady as she goes
3. Duke of York (after the ‘up and down’ of the nursery rhyme), or
4. maybe or maybe not.

Brentnall is tipping “cautious optimism”: a combination of 2 and 4 which is “steady as she goes and stay in equities, combined with ‘maybe or maybe not’ and so go for tactical asset allocation”.

The simplest approach would be overweighting equities as the market is rising, Brentnall said, and emphasising cash on the way down. “If we’re a little bit more cute than that,” Brentnall said, there could be “15 to 20 different moving parts”.

Brentnall’s explanation of his four scenarios:

1. bull in the China shop (China growth, housing and inflation all point to a boom-bust. This will be bad for Australia, given its major trade dependence on China)
2. steady as she goes (Australia has remained insulated from global problems and has continued to be. Rate rises will moderate inflation and economic settings look sound)
3. Duke of York (there is so much debt in the global economy, and such weak employment and consumption that it could take up to a decade to recover)
4. maybe or maybe not (current imbalances and shocks will continue, resulting in some years of market volatility before synchronous growth returns).