|
  |
|
|
Stock Market Outlook
By Jo Jackson
The Australian share market realised a severe overall decline in the 2008 calendar year, closing 40% down in the period. This eclipses the decreases that defined the Great Depression. Investors may well be wondering where the market will turn in the near future. The expectation of some economists is that market trends will improve in the closing half of 2009. Their wisdom could be questioned though, in their failure to foresee the current economic situation, neither in size nor extent. The attractiveness of the Australian share market is deceptive, as companies contend with the effects of severe economic times, on profitability. The measures traditionally used to evaluate the market are now unreliable, for example, dividend yield or price-to-earnings ratio. 2009, therefore, will present several economic problems in the share market. Corporate collapses are expected to increase, as will unemployment. GDP is likely to record negative growth as the world economy slows, including important emerging markets, such as China, showing slowed economic growth. The cash rate is falling, resulting in cash investments becoming much less attractive. Dividend yields on equities may appear a better option (7%+), to that of the cash rate, (4.25%, decreasing), however these are expected to continue to be volatile. These factors will give rise to continued precariousness, notably in the financial and banking sectors. Corporate accountability and consolidation becomes, in 2009, a vitally important consideration. Reviewing the balance sheet will reflect a company's stability and therefore it's ability to survive in the current economic environment. Those with stable earnings, low debt and open accountability in business models are more likely to offer the best choices unlike those that need to refinance loans or with high levels of debt. In this such a highly volatile market, the long term investor is far better placed to ride out the peaks and troughs, staying in through the economic cycles. The short to medium term will be unsteady, especially for the short-term investor. New investors need to proceed with caution. Those already in the market should remain, reviewing investments to ascertain that the fees being paid are not excessive. Though the government will aim to bolster the economy through such initiatives as interest rate reductions and increased spending, the volatility of the market should never be underestimated.
|
|
 |
|
No reactions yet.
Please login or sign up to rate this intel.
Please login or sign up to add a comment.
The copyright for this content entitled "Stock Market Outlook" has been specified by the contributor as:
All Rights Reserved
This content may not be copied, distributed or adapted by anyone under any circumstances.
|
|
May, 2012
2008
January, February, March, April, May, June, July, August, September, October, November, December
2009
January, February, March, April, May, June, July, August, September, October, November, December
2010
January, February, March, April, May, June, July, August, September, October, November, December
2011
January, February, March, April, May, June, July, August, September, October, November, December
2012
January, February, March, April, May
|
|
Not a member yet?
Qondio is a powerful network for making it online. If you have a website to
promote, we can help.
Sign up and get in on the action.
|
|
Welcome to Qondio! Discover the awesome power this network can deliver by going to our About page. Or you could skip straight to the Sign Up form.
|
|
