Sharemarket Update


Here is a 6 minute update on where the Australian sharemarket currently stands, including a brief discussion of the major issues currently impacting on share prices.


Australia’s sharemarket is scaring people

There is a lot of fear and misinformation out in the marketplace at the moment. A good deal of it appears to me to be little more than the worries of the international daytrader being promoted as news for the average person. Yes, the market has fallen quite a lot, and quite quickly. Yes, it often does this time of year.

5 Year price movement of the S&P/ASX 200 Price Index

Our market is currently priced at almost End-of-the-World levels

There are plenty of people suggesting the sharemarket will fall even further now that it has breached various technical levels.

We are all hostage to the ‘Greek Debt Problem’

Of course, this all makes sense if we view the current sharemarket as the plaything of the speculators – whether global or local. The European Union, IMF and the European Central Bank all have sufficient financial resources to quickly and easily stop the day-to-day worry criss-crossing the globe at the moment. It is just that they do not have the cohesion or political will to actually work towards that end. Therefore, all of this argy-bargy will continue until there is a clear direction on when and whether the next parcel of money will be given to the Greek government to help meet its commitments.

Search the web and you will quickly find a lot of material suggesting that Greece will default on its debts¬†eventually, regardless of these short-term talks and their outcome. It’s really just a scrum to work out how it will be worded, and who will be left holding the can, and who will have to report a loss on the Greek debt. The country itself has little chance of working through its problems while so completely at the beck and call of its larger trading partners. It remains to be seen whether the Greek government will be able to work through the daily protests, frequent riots and ubiquitous national strikes.

It is reasonable to expect that this ridiculous posturing by politicians and the banking elite will eventually result in at least a short term resolution – at which stage the Australian market should be free to develop its own pathway. Again, my call on this is that we will gradually work our way through the recovery phase and back onto a growth trend. At least, until such a time as the Un-United States of America can get its political act together enough to turn around its economy and the lives of its citizens in a meaningful way. That particular act of the global circus should present us with far more opportunities and hair-raising rides than anything that the little country of Greece can offer.

It all comes down to YOUR position, not the news…

Again, it is all a matter of looking at your own position to see what you need to do to protect yourself from extreme outcomes, and how you can take advantage of any opportunties that a volatile world may present you with.

Please remember the great disclaimer – nothing in this post or on this site is to be taken as personal advice, and you should not take any action to buy, sell or hold securities based on this information. Such action should only be taken after adequate research or after consultation with a suitably qualified adviser (“advisor” if you are English).


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