Study vital for big moves

Published in the Geelong Advertiser, August 2013 by Dale Gillham

One of my golden rules is to always do your own research. 

Unfortunately, doing research is something many people fan to do well when it comes to making any important decision.

Whether you are weighing up a choice to vote for one of the major political parties, buying a car, choosing a school for your children or making an investment decision to secure your financial future, doing your research is vital to make well informed decisions.

In this information age with resources at your fingertips, there is no excuse not to be informed.

Having been an educator and fund manager in the share market for many years, I find that despite the opportunities to learn how to make better decisions, many investors tend to do what is easy rather than what is right.

This is why my No.1 rule for investors is to spend time researching investments before buying, regardless of the amount being invested.

Sadly, many people make decisions based on the opinions of others which often results in costly mistakes.

How much research do you plan to do before your next decision? What do we expect in the market? Mid-week our market had pulled back by about 100 points from last week’s high of 5099.5 points.

This is a sign of profit taking by short-term traders drawing money off the table following some strong gains made since the low in June.

Such an event is common, particularly when a market or stock passes through a significant resistance level, the current one being 5000 points.

This level is also a whole number, and whole numbers commonly create psychological resistance from buyers or sellers as the market rises and falls.

In my opinion, the way the market is likely to unfold from here hasn’t changed from my previous forecasts.

I believe the All Ordinaries will continue to rise steadily in the coming weeks and this week’s slowing of market momentum provides more confidence.

Overheated markets tend to become too volatile and fall away as fast as they rise.

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