Market Wrap 7-10-11

By Jason Fittler

The last three trading days this week saw the market provide a sustained rally.

Early this week will give us an indication if this rally will continue with the market heading back to 4500 and the bottom is in for now or if we are yet to see the bottom of this dip.

What we have seen is that there is plenty of cash sitting on the side lines looking to get into the market. The Bulls pushed the market higher three days in a row indicating that perhaps 3900 is a key point in the market at present.

What we know is that at this level the Australian market is cheap, dividends are extremely high.

As such you are buying great businesses at a large discount.

My view is to continue to average yourself into the market. Buy for the income and hold for the long term growth. Even after the strong rally over the past three days the market is still cheap.

I realise that this type of investing is boring, but investment is not about entertainment it is about growing your wealth. If you want excitement go watch a movie.