Shares should be front of mind

Published in the Geelong Advertiser, January 2013 by Dale Gillham

Months ago I mentioned that markets had moved past the time when investing in cash was wise, and that we had entered the part of the investment cycle when investors needed to look at the share market again.

Right now, interest rates and cash returns are at all time lows and, if recent reports are correct, are likely to fall further this year.

When one investment "vehicle" subsides it creates opportunities in other areas.

However, most people fan to recognise this and therefore fan to achieve their goals.

Wise investors know that they should always be looking at the next stage of the investment cycle for opportunities.

Cash has had its day. The cycle is moving towards shares, before moving back to property as the growth area in a

never-ending cycle.

Each of these asset classes has its own cycle, which dictates how big each move up and down will be.

But that is another story.

For now, smart investors should be getting into the share market. That’s where the best gains will be over the next few months.

But now also is a good time to start the research to set yourself up to invest in property, as interest rates won’t stay down forever and property will not get much cheaper than it is.

So what do we expect in the market? 

After seven straight weeks of rises, this week we have seen what I behave is some short-term weakness in our share market and this was to be expected.

It is rare that the market rises seven weeks straight.

I would not be surprised if our market falls for another week or two as it returns to its normal pace.

If I am correct, we could see the All Ordinaries Index fall back to around 4600 points before finding support for the next rise.

Given the strength of our market over the past two months, if the fall is short in time and price then there is every chance the All Ordinaries Index could rise to about 4900 and beyond by the end of February.

If we get a fall that is longer in time and price then I will need to reassess my thinking, as the market will enter into the timeframe for the next four-year low later this year.

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