All Ords Trades Up 6% in 2023 and Looks Strong

Dale Gillham, Chief Analyst and Head Trainer of Wealth Within

By Dale Gillham |

Access to world stock markets has become even easier via trading Apps, which is causing many to start questioning where they should invest their money. While I am a big believer in keeping your trading simple, which is why I always say to invest in the ASX, I often hear investors and traders wanting to trade the US stock market. When asked why, it’s because it offers more choice, is a more liquid market and they can gain access to the biggest companies in the world like Apple, Microsoft among others.

Why you should focus on the Australian stock market

While, on the surface, these may sound like great reasons to invest in the US stock market, what many fail to recognise is that it adds a greater level of complexity and risk, as you need to also manage the currency exchange issues. So, is having more choice better or worse when investing in the stock market?

As many have experienced, more choice leads to more confusion together with a raft of psychological challenges not the least of which is paralysis, regret and potentially unrealistic expectations. As far as being able to buy the most well-known companies, such as Apple, being a fan of the company or product is one thing but making money from an investment is another.

In reality, Australia’s top 100 stocks are very liquid and indeed liquid enough that any retail investor will never have any issues. The ASX also has some of the world’s best companies like BHP, RIO and CSL, as well as our banks, which are some of the most highly rated in the world. All of these companies and others in the top 100 perform as well as any US brand. I have said it before and I will say it again, the perception that you will get better returns or lower your risk by investing in the US is a myth that will cost you a lot of money.

What were the best and worst performing sectors last week?

The best performing sectors included Healthcare up 4.95 per cent follow by Consumer Staples up 2.39 per cent and Information Technology up 2 per cent. The worst performing sectors included Utilities down 1.67 per cent followed by Materials up 0.98 per cent and Consumer Discretionary up 1.14 per cent.

The best performing stocks included Pilbara Minerals up 14.04 per cent followed by Fisher and Paykel up 11.92 per cent and Whitehaven Coal up 8.22 per cent. The worst performing stocks included Alumina down 6.29 per cent followed by Origin Energy down 4.46 per cent and Challenger down 4.12 per cent.

What's next for the Australian stock market?

In stark contrast to 2022, where the All Ordinaries Index ended January down over 6 per cent, the market has so far traded up almost 6 per cent in 2023. While the doomsayers are continuing their rhetoric, especially around the US market, I still expect the Australian stock market to trade higher. I also believe it will outperform the US market like it did last year. This is another reason why I think the Australian stock market is the best stock market for Australians to invest in.

While the US market does outperform the Australian stock market at times, the long term historical data proves that the Australian stock market also generates better returns over the long run. While it may not set the world on fire for returns this year, it certainly is on the cards that sectors that have lagged in the past will play catch up. As such, I believe the All Ordinaries Index will trade higher over the next few weeks into February or March and up to around 7,800 points and beyond.

Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also author of the bestselling and award winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good book stores and online.

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