The Market Wrap Friday 23rd October 2009

By Jason Fittler

Have we topped for now?

Earning seasons in the US will finish this week.  To date it has been a mixed bag.

What we are looking for is a return to stable earnings and solid forecasts, analysts are now starting again to believe company reports and pricing those companies on sensible earnings forecasts.

There is however some dark clouds over the banks, in the US and UK we are still look for them to fully re-capatialise themselves and back here at home the banks are looking at fully value and perhaps a little over valued.

I have some concerns also over the price of BHP and RIO which are both also looking top heavy.

On top of my wish list is to see the market pull back a little say 5-10%, this would provide an opportunity for investors to get the last of the cash into the market and also allow us to see that the support is real.

I am concerned that a continued rally could lead to a larger fall in the coming 12 months as there are still economic issues to be dealt with.

Finally, be aware of the property spruiker.
I am currently hearing the ads, “The share market has rebounded, property is next.” Do not be a sucker.  Property has some big issues coming up in the next 12 months, interest rate hikes, high unemployment and tough lending policies.

Do not buy property unless you are happy to hold for 10 years with the understanding that any short term investments in property will result in a loss of money.

For more information, give me a call on (07) 4771 4577 or send me an email.