The Market Wrap 17-1-14

By Jason Fittler

For some reason the media seem to think that how the market performs at the start of the New Year is a sign for performance for the year. This makes no sense at all.

What is important is that the market seems to be forming a new trading range, with the lows of 5100 being tested in December before a bounce.

You’ll see in the chart that the market did not make it back to the recent highs of 5500 before pulling back.

It is tradition for known market commentators to put in a prediction for where the year will end. Not me.

I suspect that this will be the year of the miner, especially if Tony Abbott gets his way with the Carbon and Mining Tax.

Banks should trade flat, but given they are paying over 8% gross who cares.

Unemployment will continue to increase as it has for many years especially with Public Servant cuts.

There are major issues to be sorted this year, which should leave the market volatile and flat.

2014 for me is the year, which will see the foundation set for our economy to rebound.

Keep in mind that this will take years but you have to start somewhere. 

Volatility will continue which will provide opportunity to buy companies at a discount and build a long-term portfolio, which will pay benefits over the next 5 years.