Economic Stimulas

This week there has been intense debate in parliament about the government’s proposed ‘financial rescue package’. Now I may be looking at things too simplistically, but if people are scared about how the economy will unfold in the future, it is unlikely they will spend money which is exactly the opposite of what the government is trying to achieve. Incentivising people to spend money when they are more concerned about whether their jobs are secure will most likely result in any funds passed on by the government going towards reducing personal debt which in my book is a good thing and something I would encourage.

On another note, if the government wants to encourage spending, why do they continually push a negative spin about the economic conditions? It is a fact that consumers will not spend money if they do not believe their future is secure. Surely it would be more productive if the government spent time and money on encouraging us to be more productive, buy Australian goods and services, and support small business to create more jobs to get the economy moving. After all the back bone of this country is small business, with more people employed in this sector than any other. While it is good that the government wants to spend some of the funds on infrastructure projects, in my opinion they should be encouraging us all to support small businesses, who in the end, will see us through this economic downturn.

So what can we expect in the market?

While the market has fallen away slightly this week, it has been highly resilient given the pull back was only mild. This is a positive sign as it means there is a higher probability the market will rise over the next week to break above 3762 points and confirm the low of 3201.5 achieved on 21 November was the longer term low.

If this occurs the market could rise to around 4200 points before we see any short term resistance, and then onto around 5000 points and beyond by mid year. While the news is positive, as I have said before, it is essential that we sit back and wait for confirmation rather than grab a bargain in the hope that the market will rise.

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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