Market Wrap - Week Ending Friday 2nd Nov 2007

By Jason Fittler 

What a week last week, the below chart tells the story better then I could. We had big raises and just a big falls, with the week closing down slightly.


There are a number of interesting things happening at present all of which we need to keep in mind when looking at the market.

1.The big fall on Friday was lead by the resources sector, BHP and RIO both being down 4% while the over all market was only down 2%. We have been saying for some time that these stocks are over valued and it seems that the market may agree.
2.Gold was up over the week especially after the Feds cut interest rates.
3.The Feds cut interest rates by 25 points, but the wording in the released did indicate that there may not be any more. This means that the market will need to look after itself from here.
4.The Aussie dollar close at a high of 93 US cents during the week.
5.Markets leaders are still split 50/50 as to wether or not the US will go into a recession.

What does this all of this mean? In the short term our market will be volatile but this is nothing new, to take advantage of this volatility we need to look for good share which have been over sold due to the concerns in the market. We are also looking for shares which pay a nice high yield and we must have a medium term time frame.

Now is a great time to get set in the stocks of the future, sure we might not make 100% in a week and lose all of the bragging rights, but by buying over sold blue chip share paying high yield and being happy to hold these for 3-5 years in the long term you will do very well.

I have also attached an article from Michael Knox this week “Living in a food deficit world” enjoy. 

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