Next week heralds the start of June and the time when many of us begin thinking about tax. The bearish market of late has the All Ordinaries Index down 7.8% for the last financial year and as a result many investors would be sitting on losses with their investments. Given that brokerage is quite cheap, it may pay some investors to sell down their shares prior to 30 June to offset these losses against future profits in the following year.

Effectively an investor has the potential to sell a parcel of shares on 30 June and then purchase them back on 1 July with very little impact on their portfolio return but with the opportunity of reducing their tax in the current financial year. Of course anyone considering this should seek professional advice from their accountant to ascertain the effectiveness of this strategy in regards to their personal situation.

So what can we expect in the market?

The market has continued to fall away this week as expected, with the All Ordinaries hitting a low of 5736.2 points on Wednesday. Yesterday it turned to trade up strongly which may signal an end to the current down move; however the market needs to rise into next week before I am confident of this.

It is still possible that the market will fall in the coming week although I don’t expect it to fall below 5720 before rising again. Given this I believe the market will start to rise in June to achieve a target of 6155 points. Anyone looking to purchase shares still needs to be selective as it is likely that some shares will exhibit volatility and possible false breaks until around 19 June.

Dale Gillham
Chief Analyst
Wealth Within

This entry was posted on Monday, June 2nd, 2008 at 10:13 am under Market Wrap.

Related posts:

• Share Market Wrap 28 March 08
• Share Market Wrap 27th June 2008
• Share Market Wrap 6th June 2008

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