Market Wrap Mon 5-9-11

Every watched a slow moving train wreck?

The last month has been extremely interesting for an investor’s point of view. The market has been trading on pure news flow but old news flow.

The problem is that the media do not investigate the information anymore they simply just receive and print. As such the general market only ever receives sound bites and headlines.

The politicians are happy with this as they are so busy spin doctoring that they lose track of what the truth really is.

Right now in the media and in the political areas they are focused on interest rates dropping. Not going to happen in the short term. We heard over the weekend that the US job figures were below expectations as such the market sold down.

The devil is in the detail, the real concern is that although job figures were flat more people are now part time or casual and less full time. Also those how are part time or casual are now working less collective hours. This is the same situation in Australia but the fact has been glossed over for the past 12 months.

What this mean for the market. I expect that the dollar will pull back; interest rates will be left on hold. Big business now has a tidy balance sheet and has made the necessary costs to ensure that they will continue long into the future.

Dividends will stay solid and income will become your best friend.

Growth is still 3 years away but once the recession comes and goes you will start to see strong growth.

Those who have cashed up will start trying to get back into the market in the next 4-5 years and push the wave higher.

Don’t try and be a trader, be a long term investor.

Look to buy in the next dip and hold on for the income and long term growth.

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