Investors simply aren’t worried about anything. Which means the market isn’t priced for any kind of worrying event. When you get such pervasive optimism, it is indeed a time to be worried.
The Aussie market didn’t like the data, with Myer shares falling 4.6%. But the jokes really on the early investors. The departments store share price is now worth one fifth of value compared to initial public offering price of $4.10 in November 2009.
For years, there’s been no more reliable investment class in Australia than residential property in our major cities. But increasingly, it looks like 2017 could be the year that changes.
Apparently, when the French metro was being built in the late 19th century, The builders asked the local bakers to make a thinner, longer loaf that the men could break with their hands, allowing them to leave their knives at home. Et voila, the baguette came into being!
Markets have decided that, due to recent weak retail sales data, the Reserve Bank will only increase interest rates if inflation comes in stronger than expected. Ironically though, the things that could push inflation higher are in part the reason behind the weak retail sales.
For our heavily weighted mining and banking based stock market, there’s been no real tailwinds to really drive the general index along. Thankfully this could be set to change…
The mistake that most amateur investors make is believing that the market should do this or that. And then when it doesn’t, they scramble to protect their point of view, rather than their capital.
That’s why the market has put in a strong rally recently. It sees a decent economy and a central bank on hold. It’s the classic goldilocks combination that the market loves. Which is why I think you’ll be seeing new highs in 2018.
Just like the railways revolutionised the movement of people and goods, blockchain will revolutionise the movement of data. Until now, any transfer of value required a middle man. This one simple change — cutting out the middle man — opens up possibilities no one thought possible.
When capital flows into small stocks in such a convincing way, it tells you that something is going on. You shouldn’t ignore it. The next challenge for the ASX 200 is to breach 6,000 points.