Time to grab a bargain.
The last two weeks have been drama filled, the media would have you believe that once the US government agreed and signed off on the increased debt ceiling that all would be well. However, the issues with the market cannot be placed on one event. You can see both here and in the US that the economy is weaker then it was back in 2007.
Over the past 4 years both our government and the US have been prospering up the market with stimulus packages, this is when they give you money to spend. The idea was to buy their way out of a recession. Obviously this strategy does not work.
Sure it got them elected, but now they have to face the music.
Today’s (Friday 5th Aug) fall of 4% in our market and the same in the US indicates that the Bears are still in control and fear has gripped the market.
Our office has been building cash in our client’s portfolio for the last 6-8 months and took the opportunity today to start getting some of this back into the market.
We are not saying that this is the bottom but many companies are good value around these prices and today was certainly a great day to buy quality business at low prices.
The one caution we do add is that although we may see a bounce in the coming days I think we will still see the market either stay in the 4100 to 4400 range for some time or it may move below the 4100 level in the coming months.
If it does we will look to do more buying.