I am currently getting my cash ready.
I am expecting to see the market make one more pull back before it starts its slow march back to 4500.
There has been good and bad news out this week with the European crisis sorted but not quite as Greece heads to a referendum on the issue. This saw the market take a dip before rebounding on Friday. The interest rate was also curt by 0.25%, which has had no affect on the market at all.
People need to understand that monetary policy is not like hitting the breaks on a car, it takes time to take affect and given the small nature of this rate drop, in light of the issues in our economy I doubt that we can expect any change from the RBS decision. In my opinion this was a politically motivated rate cut with the government trying to hold on in the polls.
On Friday we heard that labor is once again considering a change at the top, which will mean that the uncertainty is set to continue for some time. In simple terms big business is looking for stability, they care little for who is in control and more about what the rules are. This uncertainty will continue until the next election as such I expect the volatility will continue until at least 2013.
This current volatility has allowed us to buy more shares in the dip and if I am correct there is another dip coming.
Time to open the wallet and buy some bargains, take a long-term view and enjoy the ride.
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