A big call but the XAO has lost 15% since mid Jan, US in limbo waiting for bombs drop and the rest of the world trying to second guess US movements. Is the War already factored into the market??? Will it rally when the war starts???? Not usually but we don't usually get this much warning. I for one will breath a sigh of relief when it kicks off and hope if is short and sharp (and no one is killed ot injoured).
My other (optomistic) view for the market for the longer term is:
We are in new territory. The Australian stock market has never had 3 years without an up year, so history isn't going to give us much of a clue.
If you look at the longest historical charts you can find for the major world indicis (DOW, S&P, FTSE and other) they are back or near to to the trend line and in some instances under it as they should be given that over bought markets will become oversold markets in due course.
I think we are settled except for two events. The first is giving the market a nice little kick in the guts and the second will helps it back to its feet.
I and many others I’m sure are pretty much sitting on their hands waiting for the inevitable "war" which could provide another little spike down (so history suggests, eg 9/11) to provide a very inviting entry point. An entry point so attractive that it might even tempt those who ran for cover a couple of years ago (yes, the smart ones) to have another bight of the cherry.
I have been suggesting that people pick fundamentally undervalued stocks and wait for the Spike down and soon after that they can enjoy the spoils of heaps of money flooding back into the market after the war and during the much anticipated property bust...(it's a cycle and you'd expect a massive property boom after a big share market crash….tech wreck…. and V/V).
This is just one possibility of many, another is that North Korea and the US have their own version of 4th of July with Nukes in which case the Metal Storm's share price might have a short run but we might also be invaded by aliens....and in any of those instances I’d suggest you throw in the towel and go have a beer.
I think we are in a holding pattern, waiting for the said events to unfold. The capitulation many are anticipating will probably not eventuate as the orange has already been squeezed and it’s about out of juice, sure there are a few pips left to spit out but on the whole good opportunities sould start to surface.
Not everything falls in a bear market and not everything rises in a bull market. It’s currently a value and safety stocks market & cash is king, growth is being treated with a quizzical look of contempt and blue sky (??? what’s that) holds no weight what so ever. The market is totally reversed from 3-4 years ago which is a good sign for a turn around. But after the longest Bull Run in history there could still be a little pain left out there for mums and dad’s.
