Could Immigration be the Key to Higher Portfolio Returns?

Immigration is back in the headlines, and, once again, the country is divided. Some say it’s straining housing, healthcare, and infrastructure, while others argue it’s fuelling growth and prosperity. Whether you like it or not, immigration isn’t going anywhere.

For investors, that leaves only two choices: push back against the change and risk being left behind or lean into it and turn it into an opportunity. If you’re in the camp that wants to seize the upside of Australia’s immigration boom, here are the key ways you can position your portfolio to profit:

Housing and Property

More people means more demand for shelter, rents will keep climbing until construction catches up, and that’s years away. That puts REITs like Stockland (ASX: SGP) and Mirvac Group (ASX: MGR) in the box seat. By holding them, you’re tapping into rising rental yields and the long-term appreciation of scarce property.

Banks

Population growth is oxygen for the banks. Commonwealth Bank (ASX: CBA) and Westpac (ASX: WBC) stand to gain from more mortgages, savings accounts, and personal loans. Owning bank stocks exposes you to rising credit demand and dividend flows that tend to fatten in boom cycles.

Consumer Staples

Every new migrant must eat. That makes Coles (ASX: COL) and Woolworths (ASX: WOW) defensive winners. Their earnings grow almost automatically as shopping baskets multiply. For an investor, that means stable growth stocks that act as a hedge when markets wobble.

Retail and Discretionary

When new households are set up, they buy furniture, electronics, and appliances. That explains why Harvey Norman (ASX: HVN) is already hitting record highs. Adding a discretionary retailer to your portfolio can capture the demand from household formation.

What are the deflationary benefits of inflation?

However, here’s the twist. Immigration doesn’t just lift prices; it can also create deflationary benefits. More tradespeople entering the workforce reduces service costs, while supermarkets with bigger volumes can negotiate better supplier deals. That boosts margins, and higher margins often mean stronger share price momentum for investors.

The bottom line is this: immigration isn’t a problem or a solution, it’s a permanent reality, and the smart money isn’t stuck in the debate. It’s quietly adjusting portfolios and loading up on the companies set to benefit from this wave.

What are the best and worst-performing sectors this week?

The best-performing sectors include Materials, Industrials and Healthcare, down just over one per cent. The worst performing sectors include Information Technology, down over four per cent, and Real Estate and Communication Services, down over two per cent.

The best performing stocks in the ASX top 100 include Perseus Mining, up over eight per cent, followed by Lynas Rare Earths, up over six per cent and Northern Star Resources, up over four per cent. The worst-performing stocks include Pinnacle Investment Management, down over 11 per cent, followed by IGO Limited and Reece Limited, down over eight per cent.

What's next for the Australian stock market?

As reporting season wrapped up and investors exhaled, the All-Ordinaries Index staged a dramatic pullback early in the week, sliding back to the 9,000-point level before eager buyers stepped in to drive it back toward 9,100 by Thursday’s close. Even so, the market is still down more than 1.5 per cent for the week, its sharpest setback since the tariff-driven lows in April. For some, that came as a shock, while for our readers, it was expected. We’ve flagged this level as a likely turning point in our previous two reports.

Furthermore, this move wasn’t triggered by a sudden shock or a shift in fundamentals. Instead, it reflects three simple realities: September is historically weak, August was unusually strong, and the index has been riding one of its longest winning streaks since the COVID lows. In short, this is a natural pause in an ongoing uptrend.

Where to from here?

If bullish momentum holds, 9,000 could stand firm as support. If not, the 8,600 to 8,400 zone offers a healthy cushion. Corrections of 9 to 10 per cent are not just normal in an uptrend, they’re healthy. Think of this as the market catching its breath, not collapsing.

In addition, while reporting season didn’t light up the sky, it didn’t disappoint either. Many profitable companies remain well-positioned. Pullbacks like this often clear the way for the next advance, so use the time wisely: sharpen your analysis, fine-tune your strategy, and get ready to pick up quality stocks after the next dip presents itself.

For now, good luck and good trading.

Dale Gillham is the Chief Analyst at Wealth Within and the international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of the award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good bookstores.

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