October 14th, 2014
The Australian Share market has experienced some negative returns over the past month, however this has been mostly due to negative “noise” in the news. This includes concerns about the US raising interest rates, a slowdown in Chinese industrial output, lackluster economic recovery in Europe and various geopolitical issues in the Middle East and the Ukraine. To top it all the Ebola scare has many people feeling nervous. Independently these issues would have little impact on the share market, but having them all at once is naturally going to bring about some negativity. As well as this October is notorious for being a negative month for share market returns. However the market fundamentals are still quite solid, with shares still being relatively cheap, interest rates still at an all-time low and the fall in the Australian dollar eventually providing a boost corporate earnings. As well as this we are still not yet at the peak of the traditional market cycle. Once the “noise” starts to subside we should see a return to more positive market performance. In the meantime our recommendation is to maintain a long term perspective and stick to a diversified portfolio that meats your relevant investor profile.