Will the Stock Market Rise or Fall from Its Current Level?
By Dale Gillham |
Over the past few decades, I have had the privilege of educating clients to achieve good safe returns on their investments, however, I have also met many who have been drawn in by the bells and whistles that the stock market offers. But in reality all everyone really wants is some simple yet proven strategies that will enable them to achieve financial independence.
Knowledge is the key to long term wealth
With a little bit of knowledge, even the inexperienced can make decisions that will be equal to or better than the best educated and resourced people in the investment industry. However, to achieve this, the investor not only requires the right knowledge but a real desire to change their attitude and bad habits because this is what holds the majority back from achieving great returns.
All too often, I hear the words ‘if only I had’… I am sure you can guess the rest of that statement. Surely the events of the past two years have shown that investors need to take an active role in their future to be better educated if they want to achieve good returns over the long term.
It is common knowledge that all stock markets rise and fall overtime and, in some instances, crash. Yet the challenge most will face during these periods is how they handle these situations. Ask yourself, are you prepared for the next stock market crash? What will you do if the market falls 50 percent? If you’re not sure, then now is the time to get educated, not when the market it falling heavily because then it’s too late.
What were the best and worst performing sectors last week?
The best performing sectors included Healthcare up 3.54 per cent followed by Consumer Staples up 1.24 per cent and Information Technology up 0.33 per cent. The worst performing sectors included Materials down 6.06 per cent followed by Energy down 0.51 per cent and Industrials down 0.47 per cent.
The best performers in the S&P/ASX top 100 stocks included Cochlear up 6.21 per cent followed by Wisetech Global up 5.15 per cent and CSL up 4.14 per cent and. The worst performing stocks included Oz Minerals down 9.07 per cent and South 32 down 8.58 per cent.
What's next for the Australian stock market?
While the All Ordinaries Index finished last week down 1.15 per cent, the market has really been flat over the last three weeks. In the past two weeks, it has failed to rise above the previous weeks high, and in two of the last three weeks it has closed lower than it opened, while in the past 15 trading days it has only risen 0.5 per cent.
Caution and indecision are ruling the market right now, which is probably due to the fact that everyone has been waiting for the latest inflation figures from the US. These were released mid last week with inflation up slightly and while the Dow Jones fell on this news, it rebounded to close up for the week.
Without wanting to sound like a broken record, it is still too early to tell if the low of 6,581 on 20 June will hold and if the All Ordinaries Index has stopped falling. For the Australian stock market to have any chance of being bullish, we need some good news and for price to rise consistently for a few weeks, because at present there is still a reasonable chance that the market may fall further.
If the market does fall, I am confident it will find support at around 6,200 point although it could go either way from its current level. Given this, investors should continue to sit tight and get ready for the next opportunity to buy as many of the top 50 stocks which are looking very interesting.
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 bestselling and award winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good book stores and online.