In the Media

Back in the 1990's when the Federal Government undertook the massive privatisation of the Commonwealth Bank, many retail investors bought the shares and have since taken a 'buy and hold' approach. They were told by the financial industry that to properly diversify they needed a bank in their portfolio. Many retail investors have more than one bank and a share such as Telstra tucked under their pillow. If your portfolio goal is capital growth rather than income from dividends, I would argue that a strategy of 'buy and hold' will not necessarily get the best result out of the big four...

Wealth Within analyst Dale Gilliam said yesterday that the Australian market had an "important band of support between 4500 and 4600 points". "Taking history into account, investors need to be aware that the way the market unfolds over the next few weeks will be critical in setting direction for the second half of 2011," Gilliam says. "So far the analysis indicates that the market is likely to find support in June or July before it starts moving back up. However, just as markets can quickly turn, we have also seen how sentiment can deteriorate just as fast." That might seem to be covering all the bases, but...

"With the strong dollar likely to bring prices down further, this sector could entice more spending and, therefore, opportunities might come from businesses in retail spending and travel," Wealth Within analyst Dale Gillham says. But on the downside, companies that rely on selling their products overseas may face fewer customers as the cost to buy the same goods has risen. "The biggest losers are the exporters but, given Australia is no longer a strong manufacturing nation but rather a raw materials supplier, the overall effect of a strong dollar is less now than in decades gone by," Gillham says...

When building a portfolio of investment, timing is a critical factor. “The rich don’t follow the herd,” says Dale Gillham, chief investment analyst at Wealth Within and author of How to Beat The Managed Funds by 20%. “It’s the opposite – the herd attempts to follow the rich. The research I have done is that those who are not rich tend to move their money into the market before the peak and out of it after the crash.” The fastest way to make big money is to borrow it. There’s more to play with and the interest is tax deductible. “The rich know that to leverage is to increase the potential risk and so understand the law of leaving some on the table,” Gilham says...

Janine Cox, a Senior Analyst with Melbourne finance education group Wealth Within, says the market is more volatile since the GFC and becomes more so after a disaster. "I think a lot of investors have taken a ‘wait-and-see' approach to markets this year," she says. "Trading volumes have been lower recently. After such a big slide down into the 2009 low, you have to expect any further big news is going to have an impact on the risk appetite of investors...