Market Wrap 16-12-11

By Jason Fittler

The market continued to head down this week as earning forecasts started to come out with some downgrades such as JB Hi Fi which pushed stocks lower. 

I expect that we will see the 4100 floor hold up in the coming weeks. 

Heading towards the Christmas break I would expect investors and fund managers look to reduce their positions and sit on the side line. As such we can expect to see further down side in the coming week as no one will look to hold too much exposure during a extended holiday given the current volatility in the markets and news flow. 

I still expect to see the market higher in the New Year but I do not agree with the general market consensus for the 2012 year. 

I do not expect to see much growth in the value of your shares in 2012 as such I continue to buy undervalued shares paying high level dividends from cash flow. 

It is these investments, which will provide you a sold return over the next 12 months through the income they produce.  

The growth will come but it may take until 2013 before we truly appreciate how cheap these shares are right now.