Market Wrap 08-12-2016

In my last news letter on the 24/011/2016 I spoke about higher lows, two weeks later was can see that the market continuesto make higher lows both short and long term. We have seen commoditity prices move up helping  our market along.

You can see in the below chart that since February although volatile, the market is still moving up and is currently closing in on 5600 points. The longer term line runs from the bottom of the GFC in 2012 to now and highlights that the continues to improve.

As we look across our economy unemployment is still high with retail sale down as expected, sure Christmas may see a rush on retail but I do not expect retail to pick up until employment improves. Jobs are the key and it would seem that the Government is on board with Adani coal mine given the green light this week.

So what to buy, the top 20 shares are looking cheap at present along which some of the variable rate preferance shares. The banks have put on good gains over the past month as blue chips start to become flavour of the month again. We are still chasing income for our clients portfolio, although the recovery has started it is by no means a free for all.

We are comfortable holding some extra cash at present while looking for a place to invest it.