Opportunities to Invest in the Market in 2021

Over the past few decades, Australian media companies have slowly declined as many individuals take to the internet and social media for their daily news. The Australian government must be applauded for the recent agreements with both Google and Facebook, which has forced them to negotiate and pay for content from Australian media companies.

Has social media impacted the media industry?

Australia used to have several very strong media companies that we all enjoyed owning shares in, however, this has changed dramatically over the last decade as several household names now no longer trade on the stock exchange. While the recent agreements with Google and Facebook is good news, you have to question whether it is not only too late to save our local industry but to see it grow once again.

In my opinion, Australians need to have a very strong independent media presence rather than just being part of a global newsfeed that seeks to sensor what we see, read and hear. Australia has many great journalists and I think the government needs to go further to ensure the independence that Australians value by ensuring media companies supply a large percentage of locally produced content. This would not only protect our media industry and jobs for those in the industry, but it would also protect our way of life.

Google, Facebook and other social media companies have had their way for far too long, as they have been able to dictate to and manipulate what information we consume. As such, they have created mass division in the US, which has played out on TV screens around the world over the last six months. So, once again, I congratulate the government for taking these first steps, although I hope these are only the first steps and that there is more to come.

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What were the best and worst performing sectors last week?

Energy was the best performing sector up 2.54 per cent followed by Materials up 1.71 per cent, while Industrials and Financials were just in the red down 0.64 per cent and 0.89 per cent respectively. The worst performing sectors included Information Technology down 12.79 per cent followed by Communication Services down 7.13 per cent and Consumer Discretionary, which was down 6.47per cent.

The best performers in the ASX/S&P top 100 stocks included Lend Lease up 11.86 per cent followed by AMP up 11.11 per cent and IDP Education up 8.95 per cent. Nine Entertainment Co and Qantas were also not far behind, as both were up over 8 per cent. The worst performers included Appen down 22.73 per cent, Afterpay Limited down 21.33 per cent and Dominos Pizza down 16.47 per cent

What's next for the Australian share market?

I have said it before and I will say it again, what an interesting week it was in the Australian stock market given that for most of the week it continued its sideways movement before falling 2.14 per cent last Friday, which highlights, once again, the erratic nature our market has been in since we welcomed in 2021.

Given the Australian stock market has closed lower than in opened in the prior two weeks and Friday was a strong down move, it is still possible that the market is now falling into the low I was expecting a few weeks ago. This is because we are still in the timeframe for this to occur, which will be confirmed if the market trades below 6770 points.

As I mentioned last week, I believe the current unpredictability will ease and that the All-Ordinaries Index will pick a direction in the not too distant future. If the market trades down this week, we need to be prepared that the current down move could last until April. If the market trades up, then this will be short lived as the next low on the Australian stock market is due to occur in late April or May.

As I have previously communicated, opportunities are likely to come from sectors such as Energy, Materials and Financials and as we have seen in the last week, all of these sectors have held up well. In addition, if the Materials and Financial sectors are bullish over the coming month, we will see the Australian market rise, but if they are weak then the market will fall.

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.