Market: When to cash up.
September 10th 2006 23:21
The next big down turn is expected to be in 2008. The people who predict this including the IMF and OECD do not have a good record at prediction. But then almost nobody does. The big question for investors is when to sell shares and cash up and when to stay in the market. At the moment the Asian market and the Australian market are going gang busters. In fact they have just simply made up for the last four months when there was a down turn partly due to nervousness on oil and the Middle East. At the moment we are at a stage of the cycle when it is wise to stay in the market. Superannuation funds and share portfolios including those who have managed funds are expected to do well over the next few months. Returns of between 15-30% from managed funds in the last two years have been the norm. This is not expected to last and never does as the cycle comes around and we move from the attractions of the market to higher interest rates when it is wise to cash up. At which point will this occur. The sensible investor does not allow him or herself to be driven by greed. As we do not expect any major down turns during the course of 2007 it would be wise during that year to make the change at the end of the 2006-2007 financial year. The other important thing is not to seek financial advice. There is a saying that goes, "See a financial advisor and do the opposite."
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