The banks decision this week to put up fixed term interest rates on mortgages has shown once again that they are more interested in profiteering than supporting the community. In the past the local bank manager was considered the most respected member of the community but these days you are lucky to see a manager with the preferred means of doing business with a bank through ATM’s and telephone banking. How things have changed.

It definitely pays to be a shareholder of the bank these days as increased profits means the share price rises and dividends remain high but given that banks are an essential service I believe something needs to change. Since the deregulation of the banking sector prices for basic services have increased significantly, in some cases greater than inflation and yet competition has decreased making it harder to shop around and get a good deal. Surely there has to be a balance between being commercial and community minded especially for these essential services.

So what can we expect in the market?

In my report earlier this month I indicated that I expected the market to fall for at least one to two weeks this month, and while it did fall way it to within two points of confirming a lower low than the previous week’s low, it rallied strongly on Thursday. It is still possible that the market will fall next week, however, as I indicated last week, given that the previous high of 3762.50 achieved on 9 January was broken on Friday 17 April, my outlook is starting to change.

Right now any fall is likely to be short term and minor in price, therefore investors should not be too concerned. That said my expectation is that the market will actually rise over the next two or three weeks to a high of around 4200 points before it falls into a low over one or two weeks sometime between 7 and 22 May. Once this low is confirmed I believe we will see prices rise again moving up to my next price target of around 4500 points sometime in June or July.

Dale Gillham
Chief Analyst
Wealth Within

Dale Gillham, ‘one of the country’s most respected analysts’ (Wealth Creator Magazine, Nov/Dec 2004), sought after key note speaker and author of the best selling book ‘How to Beat the Managed Funds by 20%’, has assisted thousands of traders and investors to become confident and profitable in their direct share investments. Tired of an industry saturated by quick fix gimmicks and expensive short-courses, Dale co-founded Wealth Within to provide ‘ real education and ongoing personalised support’, as well as independent investment advice to traders and investors who have become disillusioned by the market for one reason or another. As testament to this, Wealth Within launched Australia’s first and only nationally accredited Diploma and Advanced Diploma of Share Trading and Investment.

For more information please visit www.wealthwithin.com.au

Australia’s fascination with Telstra continues despite the news that the company may not be involved in the National broadband network being proposed by the government. People love to own this stock yet for the life of me I cannot understand why.

Telstra floated in November 1997, and while the stock rose over the first 15 months, it has been in a downward spiral since February 1999. In fact, during the 137 months that Telstra has been listed, it has been in a downtrend for 90% of the time, which in my book does not make it a good investment. When I ask people why they own Telstra, they always state because it pays good dividends, but in my opinion this is not enough to offset the massive 68 per cent fall in price from its all time high in February 1999 to the recent low in March 2009.

Of the top 20 shares, Telstra is the second worst performer over the past 10 years with an average capital loss of nearly 2 per cent each year. While T1 shareholders may be in profit, their investment has not kept pace with inflation. T2 shareholders, on the other hand, are in the worst position suffering heavy losses since the float and T3 shareholders are now also in a losing situation. Looking forward, I don’t believe there will be any significant improvement with the share price in the coming years unless the board takes drastic action. In my opinion Telstra will continue to be a big white elephant that just plods along. While most Australians who own this stock will continue to hold, I believe they would be better off selling it and investing their money elsewhere.

So what can we expect in the market?

I expected the market to fall away this week to test the previous low but instead it has continued to move up strongly rising around 4 per cent. The strength of this move is leading me to change my short term expectations, especially since the previous high of 3762.50, achieved on 9 January, was broken today.

It is now possible that the All Ordinaries will continue to rise up until around 7 May to my target of between 4200 points and 4500 before falling into a low over one or two weeks sometime between 7 and 22 May. There is a concern right now with how the market is unfolding, as it may result in larger falls when the market does turn, which will most likely hit many uneducated investors who may have just bought in thinking the bull market is underway. Anyone suggesting that the bear market is over is in my opinion being premature. I still believe investors need to act with caution when buying stocks and to always use a stop loss to protect capital.

Dale Gillham
Chief Analyst
Wealth Within

Dale Gillham, ‘one of the country’s most respected analysts’ (Wealth Creator Magazine, Nov/Dec 2004), sought after key note speaker and author of the best selling book ‘How to Beat the Managed Funds by 20%’, has assisted thousands of traders and investors to become confident and profitable in their direct share investments. Tired of an industry saturated by quick fix gimmicks and expensive short-courses, Dale co-founded Wealth Within to provide ‘ real education and ongoing personalised support’, as well as independent investment advice to traders and investors who have become disillusioned by the market for one reason or another. As testament to this, Wealth Within launched Australia’s first and only nationally accredited Diploma and Advanced Diploma of Share Trading and Investment.

For more information please visit www.wealthwithin.com.au

Official interest rates fell once again this week, which is great news for those with home loans, but if you are a self funded retiree you are most likely suffering in the current low interest rate environment. As we all know self funded retirees get little support from the government, yet these are the people who worked hard and made wise investment decisions that enabled them to enjoy their retirement. In my opinion the government should be encouraging more people to become self funded in retirement given that the cost of prevention has to be far less that the cost of supporting a community of pensioners.

With current interest rates at around 3 to 4 per cent, income levels for self funded retirees have almost halved over the past two years, which must be creating hardship for some. It is for this reason why the argument for keeping money in cash is diminishing given that retirees would potentially receive more income by investing in shares and receiving a higher yielding tax paid dividend.

So what can we expect in the market?

The question on a lot of people’s mind is have we seen the bottom yet? It is possible but as of today this is still unconfirmed. Over the past week the All Ordinaries fell away to close lower for the first time in 5 weeks, which could be the start of the down move to test the low of 10 March that I have been expecting.

As I mentioned last week, I believe the move down will last for around one or two weeks before the market rises again to around 4200 points with my preferred target at around 4500 points in May or June. My expectation is that we will see the high occur sometime in May which will be followed by the market falling away once again, before it rises to its yearly high around September. Despite my outlook over the next few months being positive, we still need to be prepared in case the market does fall away as this is still a real possibility.

Right now the best and safest opportunities in the market are in the top 50 shares, however, I would caution people to take extra care with the banking stocks, as I still believe their strong run up over the past few weeks is not sustainable and that there is a higher probability they will fall away in the next month.

Dale Gillham
Chief Analyst
Wealth Within

Dale Gillham, ‘one of the country’s most respected analysts’ (Wealth Creator Magazine, Nov/Dec 2004), sought after key note speaker and author of the best selling book ‘How to Beat the Managed Funds by 20%’, has assisted thousands of traders and investors to become confident and profitable in their direct share investments. Tired of an industry saturated by quick fix gimmicks and expensive short-courses, Dale co-founded Wealth Within to provide ‘ real education and ongoing personalised support’, as well as independent investment advice to traders and investors who have become disillusioned by the market for one reason or another. As testament to this, Wealth Within launched Australia’s first and only nationally accredited Diploma and Advanced Diploma of Share Trading and Investment.

For more information please visit www.wealthwithin.com.au

Dale Gillham will be once again featuring on the Sky Business Channel program “Your Money, Your Call” from 7:00 - 8:00 pm EST tonight, Channel 602 on FOXTEL and AUSTAR.

Dale has also recently featured on evoTV.com.au in the interviews entitled ‘Invest in Innovation‘ , ‘Changing Empires‘ and ‘Direct Investment‘

The Australian market has risen strongly over the past 17 day trading days since the low on 10 March and it looks as if the rise is set to continue. As a comparison, the market rose for 32 trading days following the previous long term low in March 2003 before falling for two weeks and then rising in the longest bull-run we have ever seen. But the question remains as to whether the market has actually bottomed or whether the current rebound is simply a bear market rally.

The announcement yesterday by the G20 has seen a positive reaction from world share markets, so we could see prices continue to rise at least in the short term. I believe the measures announced by the G20 are a positive move as we need to see a shift away from the dominance of the US economy on world markets to a more balanced global view.

So what can we expect in the market?

If we see a repeat of the move up from the low of March 2003, then the current bullish move will last until around 23 April and trade to between 3800 and 3900 points. That said we still need to be prepared for the market to fall away to test the low, which I expect will occur this month. I believe the move down will last for around one or two weeks before the market rises again to around 4200 points with my preferred target at around 4500 points in May or June.

The market has continued to trade on higher volumes over the past few weeks, which is a positive sign. When the market does fall to test the low however, it would be good to see volume also fall away as this would indicate that any down move will be short term. The best and safest opportunities in the market right now are in the top 50 shares. I would caution people from investing in stocks outside the top 100 as these will be more volatile, unpredictable and subject to false moves.

Dale Gillham
Chief Analyst
Wealth Within

Dale Gillham, ‘one of the country’s most respected analysts’ (Wealth Creator Magazine, Nov/Dec 2004), sought after key note speaker and author of the best selling book ‘How to Beat the Managed Funds by 20%’, has assisted thousands of traders and investors to become confident and profitable in their direct share investments. Tired of an industry saturated by quick fix gimmicks and expensive short-courses, Dale co-founded Wealth Within to provide ‘ real education and ongoing personalised support’, as well as independent investment advice to traders and investors who have become disillusioned by the market for one reason or another. As testament to this, Wealth Within launched Australia’s first and only nationally accredited Diploma and Advanced Diploma of Share Trading and Investment.

For more information please visit www.wealthwithin.com.au