The Market Wrap 26-7-13

By Jason Fittler

Another week of mix reactions in the markets. 

When we look at the technical data there is the possibility of some small upside in the market but the pressure is to the down side. 

The intuitional investors are currently net sellers in the market while the retail investors are the buyers. 

I expect that we will see the market sell down in the coming months as we move closer to an election.

Looking at individual sectors, we see the banking sector again being favoured by investors chasing the yield while energy and materials are down. 

Small caps continue to struggle and indicating that buyers are still not chasing growth.

The affects of the government’s announcements such as FBT changes have had major effect on the companies involved. 

The loss of $700 million in value by McMillan Shakespeare due to FBT changes and the increasing unemployment and loss of income of dentists due to the axing of the critical dental care in December 2012 has business looking around wondering who will be next.

I continue to be cautious on the market and do not expect to see a return to a Bull market for some time.

I do however recommend that small retail investors use this opportunity to buy into good quality companies at cheap prices. 

We need to look beyond the next couple of months and years, buy for the long-term and enjoy the dividends along the way.

Good and bad news will come and go but good companies will always be around and make you rich.