Share Market Wrap 24th October 2008

While technology has enhanced our lives making it easier to access information, when it comes to the share market I believe the more information we obtain the more microscopic our views become, which is detrimental to being a successful investor. Everyday we wake up to news about whether world markets are rising or falling and during the day we can chose to be bombarded with information while the market is trading. But you have to ask is this much information really good for us or is it just too much for people to manage?

In my opinion it is the latter as history repeatedly demonstrates that investors react emotionally to market moves rather than practicing sound investment techniques. Furthermore, while most investors buy for the long term, I believe to much information leads to poor investment decisions, lower returns and in turn increased stress. Remember, investing is about building a portfolio overtime to create a lifestyle, yet the information overload leads many investors to make it their lifestyle. There is an age old adage that less is more and in regards to the share market this certainly rings true.

So what can we expect in the market?

While the market traded up strongly early in the week, the gains were wiped out during Wednesday and Thursday as the market traded back down to close at 3939.3 which is only 0.1 point short of the close last Friday. As I indicated last week, the market is likely to trade higher for short periods of time in false moves, therefore right now I encourage all investors to remain cautious as I believe there is still a high probability that the market will rise for one more week before falling away to between 3400 and 3500 points.

Given the impact that the bear market is having on the mass market psychology I believe it is better to be patient and to wait for confirmation that the fall is over, rather than entering the market only to get burnt. If history repeats itself there will be plenty of time to profit as I expect we will see a 30% to 50% rise in the All Ordinaries over the next year.

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

Social bookmarking: These icons link to social bookmarking sites where readers can share and discover new web pages.