At the risk of blowing my own trumpet and saying I told you so, the AFR has underlined how last financial year for stocks (and therefore our super) was the best year for returns since the Coronavirus! And that’s despite many headwinds that could have easily-derailed stocks.

But wait, there’s more: with highly respected market players seeing more stock price rises ahead, thanks to the Reserve Bank set to cut rates possibly four times between July and February next year.

For the record, the key market indicator called the S&P/ASX 200 Index was up 10.1%. And that’s before you add in dividends and franking credits. The chart below shows the gains for the year.

S&P/ASX 200 Index

That wasn’t a bad innings when you note the big drop thanks to Donald Trump’s aggressive tariff talk that sent our stock market down over 14% in February to April.

And the AFR quotes Ten Cap portfolio manager Jun Bei Liu, who appeared on my TV show last night to share the same wisdom. This iconic fund manager says she expects at least six more months of a rising market as the RBA’s expected four rate cuts in July, August, November and February, help share prices keep rising.

This is what the respected fund manager Jun Bei Liu said: “Any point in time when the RBA cuts rates, and we’re not in a recession, is a very bullish sign for equity markets, particularly in a market where a lot of the uncertainties, like trade, are already well known.

Soon you will see people deploy capital in a big way into the market. I’m pretty optimistic. I think the market will continue to climb, and for many that are not fully invested, they’ll be forced back in.”

Many of the experts I interview have a similar view as they cite falling rates globally, lower inflation, Artificial Intelligence innovations and Donald Trump’s One Big Beautiful Bill with its lower taxes, as well as deregulation as big helps to stock prices.

But how did our market achieve such a good year for stocks and super, despite the volatility that Donald Trump has brought to investing via his tariffs, all on top of a worrying Middle East war that adds to the existing Ukraine conflict?

Here are the positives or tailwinds for stocks that clearly outweighed the headwinds from cyclone Trump:

1. There has been a win over the persistently high inflation in the US, here and worldwide.
2. Interest rates were cut. This is an historical plus for stocks.
3. Our economy, though slowing, has defiantly kept unemployment down.
4. The Albanese Government and state governments have pumped demand into the economy, often for electoral dividend reasons.
5. The lead from Wall Street has been very positive and big tech companies have ridden a wave of positivity connected to Artificial Intelligence and the expectation that rates would keep falling.
6. The TACO factor that says Trump Always Chickens Out has meant the stock market that first was spooked by the Trump tariffs, now recognises that the President talks tough but then can fall back to a more reasonable compromise.

If anything could derail the current optimism for stocks that have US and local market indexes at all-time high levels, it would be Trump playing hardball on his tariffs with the likes of the EU, Japan, South Korea and so on. The T-day date for his imposition of tariffs globally is July 9 and there are mixed messages from the President and his staff about how hard a date this is.

While only time will tell, right now the market and experts such as Jun Bei Liu are gambling that Trump pluses will outweigh the negatives, aided and abetted by central banks, which should make the price of money fall to help consumers and businesses spend. This kind of action is a big plus for stocks.

Focussing on the local market, the AFR’s Lucas Baird and Joanne Tran pointed to the role that the CBA and other top 20 stocks have played in powering our market higher. Our biggest bank surged 47% over the past year, which defied expert calls that it was likely to fall.

This hasn’t just helped the stock market but also super funds, with SuperRatings expecting the good balanced super funds to beat the long-term average of 7% this year and these funds exposure to the likes of CBA and other top 20 stocks explain these good returns.

Why did CBA do so well?

Try these:

1. The slow cutting of interest rates.
2. Trump’s tariffs and other policies have led to less money going into US markets and CBA is an attractive company for overseas investors.
3. Our low dollar makes the CBA record high prices of late more affordable for foreign share players.
4. It’s the 11^th biggest bank in the world by market capitalisation.
5. It’s seen as one of the safest banks in the world because of Australia’s regulation.
6. The leadership of the CBA has made it a world class company.
7. Trump has created uncertainty and the CBA and our other banks are seen as safe plays in these troubled times.

Right now, analysts from big investment banks and brokerages think the CBA share price will fall by 41.1%. Some think the drop could be more, as the chart below shows.

CBA

I expect a fall in CBA’s share price as four rate cuts kick in, but I think a 15% or 20% drop will bring in bargain hunters, happy to buy one of the best banks in town!

While the fall in CBA’s share price won’t help our market index go higher this financial year, other companies will benefit from falling interest rates. The big miners like BHP and Rio are overdue for a share price comeback, which should help these positive forecasts for the stock market come to fruition.

Only Donald Trump could KO this great story.