The Market Wrap 6-7-12

By Jason Fittler

Although the market closed lower on Friday it saw good gains for the week.

Opening the week at 4098 and closing at 4157 gave us a gain of 1.4% at the close. It was an interesting week with Gina Rinehart selling some of her stake in Fairfax as she continue to push for a bid to get a seat on the board.

The first week of the carbon tax and the sky did not fall in although the debate continues. This will continue to destabilise the government until the next election. This will make the Australian market uneasy until then.

Interest rates were left on hold and I expect that we will not see any further movement in the rate for a couple of months.This will allow time for the market to absorb the recent cuts. I welcome this as the further we move below 4% the less affect monetary policy will have.

With cash rates left on hold, cash is no longer king. In fact holding too much cash going forward is going to have an adverse affect on your return. 

We are continuing to see quality opportunities in the market for those investors with long-time frames and a focus on income.

The market will improve over the coming 2-3 years but will do so ever so quietly while investors are waiting for a pull back. By the time you realise that the pull back is not coming you will have missed most of the upside. Dollar cost average into the market on the dips.

We are in the process of reviewing our model portfolio to see how it performed over the past six months and will provide this detail next week.

For more information on any of the above please contact us on 07 4771 4577.