South32 Shares Set to Rise

We have all heard the saying that if you fail to plan, you plan to fail but how many truly understand the meaning of this statement. Because in my opinion, the importance of planning is understanding the impact of what you are focusing your attention on.

It is a well-known fact that Australia is a country with one of the highest levels of personal debt and we know that that the main source of income for around 50 per cent of retirees is the government pension. So, what exactly are Australian’s planning for if they continually end up in this situation.

Unfortunately, many Australians mistakenly believe that the pension is a retirement plan. However, it was set up as a safety net by the government to support those who have not really planned for their retirement, which explains why it is set at levels that are insufficient for people to survive.

ASX investor survey

In reviewing the recent investor survey by the Australian Securities Exchange, the number one financial goal for 50 per cent of those surveyed was to go on a holiday. Around 25 per cent also indicated that their goal was to save for something big while 13 per cent indicated they had no specific personal or financial goals.

On a good note, 34 per cent indicated they wanted to pay down debt or become debt free while 32 per cent indicated their goal was to get their finances in order. While the survey included investors from all ages, one figure that was quite interesting, but not surprising, was that only 12 per cent said their goal was to plan for retirement, which explains why so many Australians are in debt and on a government pension.

This survey also highlights that what we focus on may not be what we should be planning for. Retiring debt free and on a comfortable income is very achievable for anyone with a little dedication and planning. You just need to follow the three laws of wealth creation that I outline in my book, which is to spend less than you earn, invest wisely and leave it alone to grow.

What were the best and worst performing sectors last week?

Once again, Information Technology was the best performer up 2.26 per cent followed Financials and Energy, which were up 0.66 per cent and 0.55 per cent respectively. The worst performing sectors included Utilities down 2.13 per cent followed by Communication Services down 1.54 per cent and Consumer Staples down 1.29 per cent.

Looking at the ASX top 100 stocks the best performers included Blue Scope Steel, which rose over 10 per cent last Friday after it released good news about its earnings, closing the week up 9.19 per cent. Qantas also finished strongly for the week closing up 8.08 per cent while CIMIC Group and Orora were both up nearly 7.50 per cent.

The worst performers included Iluka Resources down 47.16 per cent after the company demerged Detarra Royalties from the company. Shareholders of Iluka will get one share in Detarra for every Iluka share they own. Unibail-Rodamco-Westfield was also down 6.29 per cent followed by Evolution mining down 6.12 per cent.

What's next for the Australian share market?

Previously, I mentioned that October has a history of being volatile with wild swings up and down with the market experiencing both last week. On Monday, the Australian stock market rose over 1 per cent before closing slightly lower, while on Thursday it was down over 1.5 per cent before turning to rise. Rather than continuing to rise last week, the All Ordinaries Index went nowhere closing 0.18 per cent lower for the week.

With the Presidential election now in its final stages, the US stock market is showing weakness with no real signs of direction, which I believe is weighing down the Australian stock market. Once the uncertainty of the election has passed, I believe the market will move up nicely into Christmas and beyond.

That said, it’s important to remain cautious as we may experience some short-term downside before the market continues to trade up. For now, it is wise to sit and watch the show for a few more weeks but to get ready for the opportunities that will unfold in the not too distant future.

To learn why S32 is likely to rise, watch the video.

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.