Market Wrap - Week Ending Friday 17th August 07

By Jason Fittler

"...stocks have dropped below fair value and now is a good opportunity to buy with a long term view."
This newsletter is rated AG (Adviser Guidance recommended) some readers may find the graphs in this report disturbing.
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There it is in the circle; at precisely 1:51:34 seconds on the 16/07/2007 we saw the market hit a low of 5483.3 down 5% for the day. Is this going to be the low of this correction? Only time will tell, but  what it does mean is that this week stocks have dropped below fair value and now is a good opportunity to buy with a long term view.

The recent drop has many good Blue Chip stock yielding about 5% fully franked, which means buy now and hold for the dividend until we see the price recover. Worried that you’ve missed the boat? Not at all there’s still time to get invested as we expect to see the market stay around these levels for some time now and may even go lower.

For those of you who opened your MPS reports to see thousands of dollars wiped off your holdings, do not worry, in fact for the next couple of months I would strongly recommend you do not look at the total of your holdings at all. Come early next year, all will be forgotten and your balance will be looking as healthy as ever.

The current correction in the share market is an opportunity to invest not a reason to panic.
 
Should you have any queries please contact your adviser on 07 4771 4577.