Upfront Investor 05-07-13 | It’s All Up to Lady Market…

At the end of a financial year I am commonly asked by traders and investors where they should focus their money over the coming 12 months for the best return. Whilst I am a share market investment expert, unfortunately I don’t have a crystal ball!

You see, the market will do what the market has always done – rise, fall or move sideways. This market behavior is the same now as it was when markets were first created hundreds of years ago. There are only two things that you or I control when it comes to investing and that’s when to buy and when to sell. The rest is up to lady market. It is therefore important that we look at any share market investment on the basis of probability. To put it another way, I will only ever look to make an investment once all the dominos – that form my investment plan – are lined up. For example, right now my rules for probability are telling me that sectors such as Financials and Consumer Discretionary look set to outperform the broader market

Unfortunately, most traders and investors have little if any, planning behind their investment decisions and therefore when it comes to buying and selling most buy into the market far too late, missing the bullish run and like-wise sell far too late losing a lot of money in the process. As Benjamin Franklin so eloquently put it “If you fail to plan, you plan to fail”.

So what do we expect in the market?

Following a strong close on the Australian share market last week, this week the market was up one day and down the next. The best way to describe this activity is to simply have an understanding that after a fall the market will experience a period where sentiment is a bit scattered and this is understandable. Overall the All Ordinaries index is moving sideways to test support above the recent low of 4610 points before it can confirm the next move.

For regular readers, as you know I am watching for some conviction on the buying side to push the market back up towards 5000 points, and this is likely to occur over the next few weeks. However, if the bears take control again we could see a slight fall on our market to just above 4500 points, which is historically one of the strongest levels. Currently, my analysis is indicating the former option is more probable, which is in alignment with the longer term view that the market is likely to remain bullish. Given this, investors can take a breather from the market as we head towards company reporting season.


To your profitable trading,

Dale Gillham
Chief Analyst
Wealth Within

Dale Gillham, ‘one of the country’s most respected analysts’ (Wealth Creator Magazine, Nov/Dec 2004), sought after key note speaker and author of the best selling book ‘How to Beat the Managed Funds by 20%’. Dale has assisted thousands of traders and investors to learn to trade shares and become confident and profitable in their direct share investments. Tired of an industry saturated by quick fix gimmicks and expensive short-courses, Dale co-founded Wealth Within to provide ‘ real education and ongoing personalised support’, as well as independent investment adviceto traders and investors who have become disillusioned by the market for one reason or another. As testament to this, Wealth Within launched Australia’s first and only nationally accredited Diploma and Advanced Diploma of Share Trading and Investment.