Capital Gains Tax

Regardless of what you think of the budget, there is one thing that is certain and that is there will be hard times ahead for all Australians. In my opinion not enough is being done to encourage people to invest and become self funded in retirement, instead the government creates policies that in the long term will result in many retirees continuing to rely on the government to meet their day to day needs. But this needn’t be the case.

If all the government did was remove capital gains tax on investments, investors would be better off. Over the past two years the net wealth of the majority of Australians has fallen dramatically as a result of the significant pull back in the share market. Many have held on to their investments rather than sell and protect capital because of the capital gains tax consequences. As a result many nearing retirement will now have to continue to work or rely on the government for a pension. Ironically this is exactly what the government is trying to avoid.

So what can we expect in the market?

As expected the market has become quite volatile this week, with many shares such as RIO and other miners falling heavily. We are now falling into the short term low that I have been expecting with price now trading below my target of 3800 points.

It is possible that the market will continue to fall until around 22 May and trade below 3600 points. That said given that the market has been quite bullish of late, it is possible that the fall will be short in both time and price. I believe the market will find support in the next one or two weeks and then rise to its yearly high in late June or July to between 4200 and 4500 points.

Right now Investors should be getting ready to take advantage of the impending rise as the market will present some fantastic opportunities when it does turn.

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

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