Upfront Investor Australian Share Market Report 11/11/11
Friday, November 11th, 2011Listen to this Australian Share Market Report via audio podcast just click Upfront Investor
Standard and Poor’s will soon release updated credit ratings for the Australian banking sector, and whilst our industry has been paraded as a model to the rest of the world Australian banks cannot afford any surprises given recent world events.
It is important to acknowledge the role played by the Australian Prudential Authority (APRA) in our banking system, as it oversees risk related issues surrounding financial institutions, particularly the Big Four. Without APRA the situation with our banks in the past few years may have been very different. Prior to the GFC, around the world and particularly in America, there was an explosion in the number of banks opening up. In some countries the push for a free market economy opened the gate to a massive increase in their exposure to risk.
The sad reality is that it’s the public in those economies who deposit their money with these banks in good faith that are often unaware of the way banking works and the risks that exist. Strangely, history shows that the American banking system repeats a boom bust cycle approximately every 20 years. At some point the bubbles burst, and when they do banks don’t have the money to pay back depositors. Perhaps world regulators ought to take a leaf out of APRA’s book. In the mean time I look forward to Standard and Poor’s current view of the Australian banks.
What do we expect in the market?
Last month the Australian share market traded to a high of 4472 points, the highest level achieved since the market went into free-fall in August 2011. Following this move, global fears spiked about an Italian default and sparked a sell down across global markets on Wednesday night. This impacted the Australian market on Thursday seeing the All Ordinaries index down in excess of three per cent before the situation began to stabilise in afternoon trade. From here my analysis suggests the Australian share market will continue to rise despite the complex turn of events we continue to observe in Europe.
Investors are wise not to follow the daily moves on the market, rather it is more important to wait and see how the market closes at the end of each week. As I have always said, it is the inexperienced that open the market and those ‘in the know’ close it. For traders wanting to take advantage of the next rise, look for short term opportunities emerging in good quality top 100 Australian stocks instead of being influenced by the fear in the media at the moment.
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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 learn to trade shares and 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





