Market Weak: Will it Still Trade to 7,600 Points?

Let’s face it, we will all retire some day and like death and taxes it is something you really can’t ignore. That said, if you prepare for retirement, you can control when you retire and how much you retire with. What is concerning is that according to the Association of Superannuation Funds Australia (ASFA), women retire on average with a balance of $122,848 in super, while men retire with $154,453.

Will your superannuation support you in retirement?

In the Consumer Sentiment Tracker Report to March 2021, Finder.com.au shows that there are 24.4 million superannuation accounts in Australia, although only 3 in 4 Australian’s have superannuation, which is less than the number of mobile phone plans Australians hold. As Finder rightly states, superannuation is crucial to financing your retirement to ensure you can live comfortably, but as they indicate, 38 per cent of Australians don't understand how superannuation works, which is alarming given how important it is for our future lifestyle.

When you look at the figures on how much Australians are retiring on, it shines a light on two important areas; firstly, it is easy to see that unless Australian’s have investments outside of superannuation, there will continue to be a large gap between the lifestyle desired by Australians in retirement and the reality they will experience. Secondly, it shows a major failure in our systems around educating Australians in financial literacy.

Times have changed and all Australian’s need to change with it, which means taking responsibility for their retirement rather than relying on the Government to pay a pension.

For those who are prepared to be a little more active, understanding how superannuation and investing works and the benefits that can be gained from putting in some effort will more than likely pay off in retirement. The upside is that you get to enjoy a better lifestyle than what would otherwise be possible based on the information reported by ASFA above.

What were the best and worst performing sectors last week?

Healthcare was the best performer up 1.57 per cent followed by Materials and Industrials, which were both up 0.95 per cent. The worst performing sectors included Energy down 4.33 per cent followed by Information Technology down 2.63 per cent and Consumer Discretionary down 0.60 per cent.

The best performers in the ASX/S&P top 100 stocks included Reliance Worldwide up 8.11 per cent followed by Mineral Resources up 7.20 per cent and Fisher & Paykel up 5.55 per cent. The worst performing stocks included Challenger down 23.80 per cent following a warning to investors that FY21 profits will be lower. The a2 Milk Company was also down 9.45 per cent while Appen was down 8.41 per cent.

What's next for the Australian share market?

After rising early last Monday to a new all-time high of 7,358 points, the Australian stock market quickly turned to fall away the next day closing 3 points higher than it opened and showed weakness. The fall continued on Wednesday with the market down around 2 per cent before it regained lost ground over the rest of the week.

In my previous report, I indicated that it was likely the market would pullback for one or two weeks, and it is possible that the move down last week was the move I was expecting. That said, it is too early to tell as we need confirmation that the down move has finished, which will come if the market moves up to trade above the all-time high in the coming week.

If this occurs, I expect the All Ordinaries Index will be mostly bullish until around mid-May and possibly longer, as it rises to around 7,600 points. While things are looking good, we need to wait for confirmation as the market could still trade lower.

For now, good luck and good trading.

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 award winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good book stores and online.