In today’s Money Morning…6,000 points today is not as crazy as it seems…3% rise is a $54 billion windfall…sit on the sidelines and you’ll kick yourself for a decade…and more…
The Dow Jones, NASDAQ and S&P 500 were all up overnight. The FTSE 100 was down just 0.06% but the CAC, DAX and IBEX 35 are all in the black.
That’s pretty much every major global index up while Australia was sleeping tight. What does that mean? Well, it could be good news. It could mean that an amorous start to trading might push the Aussie market over 6,000 points.
Come again? Six thousand points?
That’s right. It’s been a long time between drinks, but the Aussie market might be punching through a barrier it hasn’t seen in almost a decade. Sure, in 2015 the ASX All Ords was perilously close to 6,000 points. But it never quite made it. In 2017 that’s all going to change.
That last time the All Ordinaries went through and closed above 6,000 points was…2013? No. 2011? Definitely not 2009. The last time the All Ords was over 6,000 points was early in 2008. Remember 2008? That’s right, that 2008.
We all remember that. But the reason the ASX was trading at 6,000 points in early 2008 was because it was on its way down from an all-time high of 6,873.20. It would eventually bottom out on 6 March 2009 at 3,117.9 points.
But that’s all history now. Here we are nine and a bit years down the track, and once again the ASX could soon be up past 6,000 points. That crept up on you didn’t it?
Ain’t no worry here, just opportunity and gain
Here’s the thing. The ASX is in no danger of shedding another 50% off its value. At least not in our view. Sure there’s too much debt in the world. And yes there are some issues in the Aussie economy, which we’ll get to in a moment. But really, do you honestly think that the world is about to crumble in the same way it did in 2008?
I don’t think so.
That means if you’re one of the nervous nellies that’s anticipating another 2008-style event, you’re probably sat on the sidelines. Or at least you’ve got a bit of money in equities, but probably not as much as you should.
Here’s the thing. The longer you wait, the longer you’ll miss out. The longer you avoid the reality that’s staring you in the face, the more you’ll kick yourself down the track.
The simple truth is the ASX All Ords is on a charge. And watch the mainstream pick up this story once it breaks through 6,000 points. On Monday we read about the ‘correction the market had to have’. It fell over 1% in a day.
For the rest of this week the market has been on a charge…so much for that correction. The All Ords is up 3% in a week. That might not sound like much, but it is. A 3% rise in the All Ords equates to an increase of about $54 billion in market capitalisation.
Let’s put that simply.
In the last week the 500 biggest companies in Australia have increased in size (combined) by $54 billion.
Yep, must be a bad market to invest in (sarcasm).
I won’t sugarcoat this. And what I’m about to say might even annoy some of my fellow editors. But if you’re not investing in this market, then you’re nuts. You’re missing out while others cash in on opportunities galore.
And that’s what so exciting about the Aussie market right now. In fact that’s what’s always exciting about the Aussie market — there are always great companies to invest in.
Even when there is a bear market, there are still incredible opportunities for investment. But when there’s a bull market…oh boy…when there’s a bull market, we don’t think there’s another stock market in the world that’s as incredible to invest in.
And that’s the point we’re at right now. The Aussie market is charging. And it’s doing so against the odds. Just have a look at The Age from yesterday. One article says Aussies are sitting on piles of cash. But then another article says more Australian’s are falling behind on mortgage repayments. Well, are we wealthy or not wealthy? Is there a property bubble or not? Is a recession coming, or an incredible bull market?
Who really cares if you can invest your money in the stock market and make serious money? Sure you might have lucked out and seen your property rise 8% or 9% last year. You might have even seen your property double in price in the last five or 10 years. If so, good on you.
But has your property risen 215%, 585%, 437% or 1,900%? I’m going to say probably not. While you might be all tied up in the endless talk about property prices (I think it’s a massive bubble by the way) the stock markets around the world have been delivering the kinds of gains I highlight above.
No other asset class can do what this one can
Yes, that’s right one of our stocks is on a paper gain of 1,900%. That’s just in the space of three years. I’ll let you in on a secret: in the last three years, no property in Australia, big or small, has made that kind of return.
There is simply no other asset class that opens you up to the kinds of investment returns that the stock market can. Property doesn’t even come close to it.
The overall market is starting to head into major bull market territory right now. This could be the biggest opportunity since March 2009 to invest and see your portfolio supercharge its returns.
Things around the market might look shaky. And that’s because they probably are. But you simply can’t deny that this is a market on the up. For all the talk of impending doom, the market continues to punch above its weight. And in our view that’s not going to change.
If anything, the economy will get through its current pains. And when it does, the market will be even further ahead. That means when it all turns good, you’ll be able to watch the best stocks on the ASX supercharge their returns.
This is why it’s so important to be investing now. Get in on the ground floor, before things really take off. This is a market full of investing opportunity. It’s a market you want to invest in. Sit this one out and you’ll kick yourself for another decade.
From the Port Phillip Publishing Library
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