Market Wrap - Week Ending Thursday 20th March 2008

Another week another interest rate cut by the Feds.  The 75 bases point cut by the Feds this week gave the market some hope which saw a 4% rally mid week. Unfortunately this was not sustainable as the following day we saw the market fall back again on the concerns of credit crunch.

The big question is how far can the Feds cut rate?  My guess is another 225 bases points bring interest rate to zero. I hope this is not needed but I do expect the Feds to continue their aggressive stance on supporting the market.

But what about Australia?  We can never pick the bottom but we can pick value, and right now the market is showing us a lot of value especially in the top 20 shares.  As such, if you have a long term view and comfortable picking up nice big fat dividends then there is still opportunity out there.

In short the ride is not over and it will take some months before we see our market recover, my focus is on company earnings and sustainable dividends. This formula has always produced great results for the long term investor.

Until next week.