Market Update - First Quarter 2010

The year is moving by so quickly it seems so it's good to see that the effects of the GFC which actually started just over 2 years ago are improving.

The markets have certainly turned around since our low point (6th March 2009) when our All Ordinaries Index (shares) hit the low 3100's.  The All Ordinaries came back to the 4900 level in December (a 58% increase). A similar thing has happened in most overseas markets.  The rise in the Aussie Dollar has reduced the gains to investors in Australia.  It is important to understand that the return has not been lost – it will be paid back as the Aussie Dollar comes back to a more normal US 76 cents.

With world economies seeming to be past the worst, it definitely appears that markets will continue improving from here on in, however there may still be some level of volatility moving forward.  It is a good sign that most Fund Managers are saying that if there are any surprises in financial markets they are likely to be on the upside!  With economies expanding, there is one thing that we do know for sure - interest rates will also be on the rise.

Congratulations on your conviction on staying in the market – you are now seeing the rewards of your actions.  It is still a good time to invest, as the market still has plenty of growth opportunities available.  You may also wish to ensure your SMSF Investment Strategy is reviewed in light of the valuation changes in your assets.  Please contact me for any assistance in these areas.

Mark Cann, Cann Financial Planning ADFS (FP), FPA (Aff)