Market Wrap - Week Ending Friday 28th September

Kick the tyres and light the fires, seems to be the call of the market this week. Even amongst poor economic news in the US we still see our market breaking through to all time highs. How good is this? Or is it? The recession word is also being battered around along with increased inflation and the US dollar fall, and the Australian dollar higher then it’s ever been against the US… that I can remember any way.

This week on Tuesday we saw our market close up 32 points of which 25 point can be contributed to the big move in BHP that day. This is evidence that our market is continuing to move up on the back of the resources sector, not that I’m complaining but it does call for caution when looking to buy stocks.

This week I’ve spent a lot of time looking for value in the market and shares which I would look to buy. At this point my top picks are stocks which are paying a nice high dividend being over the 6% mark and stocks which have not rallied up with the market and look like good value.

Where will the market go over the next month?  We’re moving into October which is subject to seasonal weakness, we should also hear how all of those mining stocks have done during the first quarter 2008. This could see a start of a correction, all be it smaller then we have initially thought. The expectation is that the market could get back to around the 6000 level providing us with the opportunity to get some money in. Be warned though if the market does not pull back in October most of the money is on the Bull market to continue.

In short, do not rush into this market, be selective as to the stocks you buy there is still a lot of volatility in the market place.

Should you have any queries please contact your adviser on 07 4771 4577.