The outlook for equities is still optimistic, defying worsening conditions in the Australian economy, because the growing band of self-managed super funds has become too great an investor force to ignore.

Credit Suisse equity strategist Hasan Tevfik is sticking by his S&P/ASX 200 Index target of 6000 points in 2015 because Australian stocks will be supported by income-hungry self-managed superannuation fund investors, or "selfies", and a growing activist investor base will demand better returns from underperforming companies.

With little in the way of new equity issuance on the cards, share prices will be underpinned by a lack of equity supply because companies prefer to raise money in the debt market.

Credit Suisse estimates have pegged so-called selfies to spend $1 billion a month adding to their portfolios up to 2015-16, setting up a sizeable pipeline of equity inflows.

"This is an important reason why we think prices are going to rally into next year. There's literally not going to be enough equity issuance to absorb this demand," Mr Tevfik said.

What is different about next year is that all signs point to the cost of debt being even lower, which will influence company behaviour in all kinds of ways, from how organisations source fresh funds to the compulsion to grow by acquisition. Last week the 10-year Commonwealth government bond yield fell below 3 per cent for the first time since October 2012.

For investors, the ultra-low yields on offer in fixed interest assets make equities a compelling choice because of the sharemarket's ability to deliver stable if not growing dividends.

The trade-off has been a reluctance among businesses to invest directly in the economy through higher capital expenditure, choosing instead to reward the investor base. Reserve Bank of Australia governor Glenn Stevens earlier this year bemoaned the lack of animal spirits as he faces sharply declining mining-led investment.

Mr Tevfik said there was still a discernible economic benefit.

"Those companies which invest a lot generate the poorest returns, this has been consistent all the way through time. This is the reason why shareholders are always averse to new investment. Saying that, if you're not investing and if the shareholders continue to put pressure on companies, which they are, you're going to be returning that capital via a dividend or a buyback or something else. That's to the benefit of the economy." However, the benefits of this bias to return capital might not be immediately evident, Mr Tevfik said.

Long-term benefit

"In the long term you want efficient companies, you don't want inefficient companies which are just zombies," he said. "I think in the long term shareholders constantly put pressure on companies to generate higher returns and if some of that comes via 'don't do that capex project which is really quite risky anyway', that's a good thing.

"That's how the Australian economy becomes much more efficient."

Mr Tevfik advocated against placing short bets on stocks which are widely held by the growing cohort of selfies.

"Your selfie stocks I think are quite dangerous shorts. Selfies love the four banks and Telstra and I think they should increasingly be converging onto these other companies," he said, urging selfies to look at those stocks which boast yields above the median level of the ASX200 and are growing their dividend payouts. Examples include Macquarie Group, Tabcorp Holdings and Flight Centre Travel Group.