Last week was all about the budget and normally I will write about the changes handed down in the budget in the newsletter. However, given that lack of depth in this budget there is not much to talk about.
So, let's look at the markets.
There are a couple of issues affecting the markets this week, first is interest rates, most of the major banks have come out and changed their forecast on interest rates and are now expecting a RBA rate raise in June. This of course means that the banks are getting ready to increase rates.
April was a good month for the market and as expected there is some profit taking going on right now, finally the AUD is still around $1.07 with predictions now hitting the market that it will move higher. This will certainly be the case if the US continues to keep their interest rates down while ours move up.
These factors have seen our market drop over the past week and I am expecting further downside.
So what to do, I am topping up on the banks, ANZ being my top pick, QBE is also providing a high yield at these levels.
If property is your thing, look at Westfield and Stockland, I am staying away from the retails sector but still holding JBHi and topping up on Southern Cross Media. All of these stocks are good value at the current price.
Remember, dollar cost averaging is the name of the game in this market, so do not spend all of your money at once but make sure to make the most of these dips.
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