When will the Market Make its New All Time High?

Dale Gillham, Chief Analyst and Head Trainer of Wealth Within

By Dale Gillham |

If you type the word stock market into your browser, you will literally get millions of hits, some of which have good, valid information, while others are misleading and in some cases fraught with danger. While the incidences of misleading information and education in the financial space is not new, social media giants have made it very easy for anyone to become a financial influencer.

ASIC is targeting unlicensed finfluencers

Remember, the more people consume content the more money the social media giants make, and given their lack of care or action, ASIC has increasingly been targeting this area in order to protect Australians. This is because the way investor’s now access information has changed significantly and, as such, ASIC recently announced it would tighten the restraints on those who talk about money and investing if they are unlicensed. In essence, they are putting social media financial influencers or finfluencers on notice that if they cross the line into financial advice, they will face heavy fines or prison.

Unfortunately, many of these finfluencers have very little understanding of the law when it relates to financial advice and are walking a fine line because ASIC is monitoring this space and they will get caught. While some finfluencers do provide good information, there are too many providing misleading information and with 33 per cent of 18 to 21 year old’s following at least one financial influencer in 2021, according to ASIC, the potential for serious damage to the younger generation is high.

In the last few years with the lock downs due to COVID, there has been a significant rise in finfluencers and the younger generation have been getting into the stock market, as well as other investments without the proper knowledge or advice. Sadly, this is causing a lot of damage, so I support ASIC cracking down in this area and I urge social media giants to do the same.

What were the best and worst performing sectors last week?

The best performing sectors included Healthcare up 3.92 per cent followed by Industrials up 2.62 per cent and Utilities up 2.36 per cent. The worst performing sectors included Materials down 5.25 per cent followed by Information Technology down 5.03 per cent and Energy down 0.62 per cent.

The best performers in the S&P/ASX top 100 stocks included Ramsey Healthcare up 30.60 per cent after a consortium of investors that included KKR launched a takeover bid for the company. Brambles was also up 6.66 per cent while Cleanaway Waste Management was up 5.88 per cent. The worst performing stocks include Block down 13.17 per cent followed by Evolution Mining down 10.52 per cent and Iluka Resources down 9.90 per cent.

What's next for the Australian stock market?

Both last week and this week were short weeks in the market, so it’s not surprising to see it has remained relatively subdued in recent weeks. Once again, the All Ordinaries Index started last week on a positive note only to exhibit weakness towards the end of the week closing down 0.69 per cent.

Regular readers know that I have been expecting some weakness partly because the market is trading within a few per cent of its all-time high. Typically, two things can occur at an all-time high; one is that price accelerates and breaks through the high quite quickly or we see resistance to price breaking through the high with the market trading down or sideways for a period, which is more common.

You will remember I mentioned that the highest close on the Australian market was back in August last year and that this level was significant because to date it has not been broken. Given this and the fact the All Ordinaries Index is yet to break above the all-time high suggests that the big end of town are being cautious right now. This indecision could mean that my earlier analysis of the market falling to as low as 7,600 points before rising again is still likely.

For now, I recommend continuing to play the wait and see game until the Australian stock market confirms its direction, because as I mentioned last week, recent history has shown that anything is possible in our market and that we need to expect the unexpected.

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

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