by Peter Switzer
The good news for the market is that the US jobs report could be a catalyst to take this market higher.
The bad news is that there are still a lot of challenges out there that could really bring the market down.
However, Shane Oliver, the main market-watching man at AMP Capital Investors, believes in this rally, while accepting that there are curveballs out there that none of us can be prepared for.
No matter how good your economics and market training, it’s hard to do predictions and make investment decisions when you have X-factors such as Middle East instability, European electoral responses to tough budgets to deal with severe indebtedness and let’s not forget Japan’s black nuclear cloud hanging over the global recovery.
There’s more but I don’t want to give you too much anxiety. That said, my fortnightly joust with Oliver made me feel comfortable that being invested in shares remains a sensible long-term strategy.
Shane looked at a number issues such as the European debt problems. He pointed out that while Portugal, Ireland and Greece — the PIG in the PIIGS acronym — were still under pressure for their debt/economic situations and the interest rates they paid on their borrowings showed it, Italy and Spain were seeing lower interest rates.
The fact that the latter two economies are more important ones was a promising omen.
Oliver also was happy with the US recovery and the Chinese slowdown, which he said was exaggerated as a fear factor by the bears.
For those who want some hand holding and moral support for being an investor in shares, have a look at the Oliver interview on the website which will be posted on Monday.
One last thing — 27 April could be a market-moving day. This will mark the first time that the Fed Chairman does a press conference after the central bank makes its interest rate decision.
Any references to the end QE2 or the possibility of QE3, which I think is out of the question, could rock and rattle the market in any direction.
By the way, I would love to see this happen here but our RBA boss gets off a lot easier than his counterpart in the US.
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
Published on: Friday, April 01, 2011
The Switzer Super Report is a newsletter and website for self managed super funds. With exclusive commentary from Peter Switzer and Paul Rickard the Switzer Super Report will help you maximise your after tax investment returns and grow your DIY Super. Click here for a free trial or subscribe today.