{"id":59067,"date":"2014-08-21T03:04:04","date_gmt":"2014-08-21T07:04:04","guid":{"rendered":"http:\/\/countingpips.com\/?p=59067"},"modified":"2014-08-21T03:04:04","modified_gmt":"2014-08-21T07:04:04","slug":"we-hope-you-followed-our-australian-share-market-advice","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/08\/we-hope-you-followed-our-australian-share-market-advice\/","title":{"rendered":"We Hope You Followed Our Australian Share Market Advice\u2026"},"content":{"rendered":"
August 21, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

Did you do it?<\/p>\n

We told you to do it.<\/p>\n

But you probably didn’t trust us enough to do it.<\/p>\n

In fact you probably did something we told you not<\/em> to do.<\/p>\n

That’s understandable. Even though we’ve gotten pretty much every part of this market right for the past five years we don’t expect everyone to believe us.<\/p>

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But we’re telling you now: you better believe us. If you don’t, it could cost you…<\/p>\n

So, what are we going on about?<\/p>\n

It should be obvious. The Age<\/em> reports:<\/p>\n

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‘The broader market meanwhile finished at its highest since June 2008, with the S&P\/ASX 200 Index firming 10.8 points, or 0.2 per cent, to 5634.6 points.<\/em>’<\/p>\n<\/blockquote>\n

As we mentioned yesterday, it was barely three weeks ago that many commentators were fretting about crashing stock prices.<\/p>\n

Well, stocks<\/a> did fall…but then they recovered. Just as we said they would. That’s why when most others told you to sell stocks at the time, we told you to get into the market and buy.<\/p>\n

That’s what we did. We took our own medicine and added to our personal blue-chip portfolio. It was a good move. The S&P\/ASX 200 index is up 3.6% since the recent low on 8th August.<\/p>\n

And there’s much more to come.<\/p>\n

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Going sideways before a rise or a fall<\/strong><\/h2>\n<\/p>\n

In yesterday’s Money Morning<\/em> we explained how the Australian share market<\/strong><\/a> had been in a sideways pattern since February.<\/p>\n

We explained that since the creation of the S&P\/ASX 200 in 2000 there have only been a handful of times when the Aussie market has gone in a sideways trend for a lengthy period.<\/p>\n

The current period from February this year through to today is one of those times.<\/p>\n

But it’s not just the Aussie market that has gone in a sideways trend this year. The US stock market<\/a> has done the same thing.<\/p>\n

You can see this on the following chart:<\/p>\n

<\/a>
\nSource: Google Finance<\/em>
\nClick to enlarge<\/a><\/em><\/div>\n<\/p>\n

The US S&P 500 has formed two clear sideways trends this year. The first was from February to May, the second from June through to today.<\/p>\n

This isn’t unusual in any market. It’s understandable that the market moves in these patterns. Investors<\/a> tend to keep buying stocks until they worry stocks could be too expensive.<\/p>\n

At that point the market can go into a sideways pattern. It can stay that way until the market hears good news to push stocks higher, or bad news to send them crashing.<\/p>\n

Sometimes just the fear of bad news can be enough to cause a crash. That’s what you saw back in January, and again over the past few weeks.<\/p>\n

But if the news isn’t as bad as the market feared…or even if it’s better than the market expected, it doesn’t take long for stocks to recover and then push to new highs.<\/p>\n

That’s happening now.<\/p>\n

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Opportunity in adversity<\/strong><\/h2>\n<\/p>\n

Of course, this can’t carry on forever.<\/p>\n

A time will come when the stock market<\/a> will slump and companies can’t release news that’s good enough to make share prices recover.<\/p>\n

That’s when you get a sustained market fall. But we don’t see that happening anytime soon. It all comes back to interest rates. As long as interest rates are nice and low it will help boost stock prices.<\/p>\n

This brings us back to our comments at the top of this letter.<\/p>\n

You’ve got to get used to this kind of market action. This is how the market has been for the past five years. It’s probably how the market will be for the next five years — or longer<\/em>.<\/p>\n

That makes it tough for you as an investor. It’s natural that you may panic when the market starts to fall and the mainstream pumps out the scary headlines.<\/p>\n

But that’s why you’ve got to look past the headlines and the scare tactics. You’ve got to think about whether the ‘big scare’ really is something that’s worth you selling your shares.<\/p>\n

Based on the two dozen scare campaigns we’ve seen over the past few years, none of those have been big enough reasons to sell stocks. And we’re not just saying that with the benefit of hindsight.<\/p>\n

We told you at the time not to pay attention to the scares. We got on stage at the World War D conference<\/a> in front of 350 investors and told them to ignore the scares. We’ve even told you to go one step further and buy stocks as nervous investors sold. We hope you took that advice.<\/p>\n

For instance, last week in Money Morning Premium<\/a><\/em> we suggested that investors look at Commonwealth Bank of Australia [ASX:CBA]<\/strong>, even though the stock is near an all-time high.<\/p>\n

Since then CBA’s shares have fallen by a dollar. Bad news? Not really, this week CBA shares went ex-dividend for a $2.17 dividend. So investors who bought last week would be up a buck already.<\/p>\n

But it doesn’t matter if you didn’t make that trade. The point we’re making is that in adversity (even minor adversity) there is always opportunity. There was opportunity in the market last week, and there’s opportunity today.<\/p>\n

It’s still a great time to buy stocks.<\/p>\n

Cheers,
\n Kris+<\/a><\/strong><\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

The post We Hope You Followed Our Australian Share Market Advice\u2026<\/a> appeared first on Stock Market News, Finance and Investments | Money Morning Australia<\/a>.<\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au Did you do it? We told you to do it. But you probably didn’t trust us enough to do it. In fact you probably did something we told you not to do. That’s understandable. Even though we’ve gotten pretty much every part of this market right for the past five years we don’t […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-59067","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/59067","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=59067"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/59067\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=59067"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=59067"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=59067"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}