Over the last 6 months we have seen the Australian Share market take a rollercoaster ride, with the Australian All Ordinaries Index getting to highs of near 5,000 in January and April down to lows of 4,500 in February and 4,300 in May. This volatility is largely due to the continued uncertainty surrounding the global recovery and whether it will be sustainable in a high sovereign debt environment. With these issues and others causing a heightened state of sensitivity for investors, we are of the opinion that this volatile environment will be here to stay at least for the short term. Longer term, the picture remains solid for Australia, with the Chinese and Indian growth stories still intact however even industrialisation is not without its ups and downs.
While the ‘buy’ side, broker driven research will have us believe that the Aussie market will reach highs of 5500 by the end of the year our job is to take into consideration the risks that are present as well as the opportunities. We are fortunate not to be remunerated by transactions and therefore if the best thing for you and your portfolio is to sit tight that is what we will advise you to do.
Whilst the market has effectively gone sideways over a 6 month period and volatility remains the theme for the moment opportunities are still present to generate returns, particularly via income and franking credits. Through careful navigation and calculated asset allocation decisions we aim to maximise returns whilst minimising downside risk for your portfolio.
Should any issues require further clarity please contact our office.
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