By Jason Fittler
Last financial year will not be forgotten quickly.
Let’s take a few moments to review how we performed overall.
On a global scale we were the sixth worst performing market with a overall drop of 24%, the worst hit was France with a drop of 28% and the best performing was India with growth of 9.7%.
Interest rates fell from 7% back to 3%, the worst performing sector was the materials sectors which lost 35% over the year, the best performance was information technology up 1%.
The aussie dollar closed lower at 80c but did recover from its mid year lows of 65c, however it did out perform most of the major world currencies.
Oil prices fell 49% closing around $70 US a barrel, copper closed down 40% while gold held up closing around $950 a ounce, about where it started the year at.
For Australia it was indeed the worst year in the last 27 and certainly ranks as one of the three worst Bear markets in our history.
Let's look at the best and worst performing stocks.
In the ASX 20 the best performer was Woolworths up 7.8% for the year with Fortescue Metals being the worst at a loss of 68%.
In the ASX 50 the best performer was Lion Nathan up 35.3% for the year with BlueScope Steel being the worst at a loss of 72%.
In the ASX 100 the best performer was Karoon Gas up 100% for the year with B&B Infrastructure being the worst at a loss of 90%.
The take away from this is, the best performing stocks in 2010 will come out of the worst performing stocks 2009.
There are a lot of good companies out there which have been sold down over the past 18 months and will in the near future recover to show extra ordinary gains.
The next couple of years will be a stock pickers market; there will be plenty of opportunity. I do not advocate a return to being bullish but certainly now is the time to start buying with a long term view.
There will be a lot of millionaires made over the coming year, although you may not realise it for 2-3 years.
Now the good news!
2010 will not be a bad as 2009, here is why, the government acted quickly, pumping money into the economy. This action will get the machine working again, due to the quick response, a lesson they learnt from the Great Depression as such the recover will be shorter.
On average it will take the market between 12-20 months from when the market bottoms to recover in a bear market. If you believe, as I do, that March 2009 was the bottom then this would indicate that the market will have recovered by December 2010. Not long in investing terms.
If you are thinking of waiting until December 2010 to start investing, you will be to late. Act now.
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