Upfront Investor | Where is the Best Bang for Your Buck?

When looking for growth, investors often attempt to blindly follow the heard as they look for the best bang for their buck. So where is the best bang for your buck right now? Traditionally investors might look to property but as we have seen recently, with a low interest rate environment, property prices have taken off over recent months and I suspect that most people thinking about investing in property now have ‘missed the boat’. Let’s face it, a major investment decision can have serious implications for your future standard of living and wealth accumulation so it’s wise to take your time and consider all your options before jumping in. A simple consideration I recommend for all investors is to understand the investment clock. The investment clock provides a simple, macro view of the current economic environment and where we may be headed to next. By understanding this tool you can spread your risk across asset classes that are likely to outperform as the global economy moves into the next phase.

So where is the clock headed to now? Taking a longer term view I believe we are headed for a period of instability. It’s likely that over the coming months interest rates will once again start to rise and this is likely to put pressure on individuals who have overleveraged into property. For those of you who are regular readers of my column you will know that I have talked about the Australian share market peaking sometime in the first half of 2014 and I still believe this top is on the cards. As such, now is the time to begin looking at the sectors of our market that are stable and likely to perform well if present conditions taper off. The top 20 stocks on our market are a good place to start looking as these companies will continue to remain robust as we enter the next economic phase.

So what do we expect in the market?

From time to time you will hear the terms ‘consolidate’ or ‘testing support’ used by investment professionals when describing a stock or market. This simple means that the market has ‘come off the boil’ and investors have taken profits off the table, waiting for more positive evidence as justification to re-enter stocks. This is exactly what has happened this week on our market.

After a four week straight rise that saw the All Ordinaries surpass the May high of 5229 points, investors have this week liquidated positions and cashed profits with the market falling slightly and seemingly finding support around the prior high in May. This is a normal occurrence and my view is that overall the market remains strong and will continue to rise over the coming months albeit we may see one or two more weeks down before the next rise.

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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.