Resist the urge to sell, remember you are a long term investor.
On Friday (10-Aug-07) we saw the biggest drop in the market sine September 2001, you heard it here first. We’ve been expecting the market to pull back for a couple of months now and there is more to come. This provides us with a great opportunity to pick up some blue chip shares at fair prices. When the market comes off like this resist the urge to sell and remember, you are a long term investor.
Other news this week was that the Reserve bank put interest rates up by 0.25%, according to our economist Michael Knox this was not necessary, so we don’t expect any further moves until after the election. The US is already talking about dropping their interest rates.
In the US the Sub Prime drama drags on with more news coming out as to how large an issue this will be, BNP Paribas, France’s biggest listed bank, announced that it has suspended three of its funds given the deterioration in US credit markets.
Week starting Monday 13th August we expect to see the market continue to fall but it will be a bumpy road. If you are wondering what you should do then contact your adviser on 07 4771 4577.