Based on the expert opinion in the weekend Financial Review and again in today’s Financial Review the experts seem to all be getting behind a general view that the Australian Stock Market will turn around and improve by about 10 percent this year.
Should this be the case this would obviously be a better outcome than it not improving at all, or going down like it did last year.
However even if the market does pick up ten percent over the year this will not even cancel out the 18 percent fall in 2011 and will hardly touch the adjusted relative loss on the share market since 2008 of 59 percent (based on ‘normal’ overall market growth of 6.5 percent per annum).
If one could be sure that the market is going to pull up by 10 percent one might buy a few more shares, but personally I am just not convinced. Things like the falling iron ore price, the increasing crude oil cost, ongoing issues in Europe, all the job losses that have happened so far this year in Australia (and we are repeatedly told there are more to come), a very flat domestic property market that is expected to stay flat and possibly fall by 2 or 3 more percent this year, Iran threatening to to go to war if anyone tries to stop it making a nuclear bomb, and the high Australian dollar (which is bad for just about all internal businesses expect mining) just don’t seem to me to be in line with an improving share market. But then I am no expert in this . . .