The State of the Market

By Jason Fittler

Is every company going broke?


Last week we saw the US and Australian markets head to new lows, we have not seen these levels since 2003. Many are saying this is the worst fall we have ever seen. What a load of rubbish, in 1974 we saw a similar drop; in fact it was a larger drop.

There is no indication that this fall is over and in fact it may indeed be worse than the 1974 fall. The market recovered from the 1974 fall and it will recover from this one, what is important is what you do now.

We have just come out of the February reporting season, many companies reported well with strong cash flows, low debts and sustainable dividends. These companies are set to recover first and as such are the ones which you want to make sure you have in your portfolio.

What is important now is making sure that your portfolio is set for the recovery.

Stop worrying about when the market will recover and worry more about being ready.

It could take two months or two years, just be ready.