Upfront Investor Australian Share Market Report 01/04/11

Australians have become concerned about the rising level of government debt following many spending initiates undertaken over recent years – some successful, others a waste of taxpayer funds. This is why many Australians welcome news about the forthcoming budget cuts, which in my opinion are long overdue. However, not all changes will be welcomed by the public. One thing for certain is that this budget will be highly scrutinized, and history has shown that governments rarely stick to the plan. With all the talk about the Budget, now is a good time to remind all Australians to take a look at their own budgets.

The sad news is that only around 10 per cent of people actually have a budget, so why is this? Part of the reason is that most people think that a budget will hamper their lifestyle. This explains why these same people are surprised to learn that one of the keys to wealth is to set a budget. Only when spending habits are quantified do we know how much we can save and I have never met anyone that could not save at least 10 per cent of their income after completing a budget.

What do we expect in the market?

The Australian share market has been quite buoyant over the past couple of weeks, having finally traded back above the level of the October 2009 high of 4,897 points and to the all-important 5,000 point level during today’s trade. Although this indicates the market may have the wind back in its sails following the March decline, I would like to see buyer momentum slow down for one to two weeks so that the market doesn’t move too far ahead of itself. Remember a market that continues unabated can quickly become unstable, as seen in early 2010.

Looking ahead, I believe the All Ordinaries Index is likely to continue above the 5,000 point mark in the short term to achieve around 5,200 points. That said, as there is still a lot of nervousness in the market we are likely to see volatility increase around times of important announcements in the media. Therefore, it is wise to be patient and remember one of the rules used by all successful investors, which states that a good investment strategy must allow for changes in the market and this requires a minimum investment period of five years.  

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%’, 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 asindependent investment advice to 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.For more information please visit www.wealthwithin.com.au