The local market so far in 2010 has failed to add to the healthy gains it generated in 2009. It has been somewhat of a rollercoaster this year with the benchmark ASX 200 index reaching 5,000 in April only to fall back under 4,200 in May and then again in July. Since then it has recovered back to around 4,700 but it has been quite the grind. Whilst the US market has motored on this year, the Australian share market has unsuccessfully followed suit.
A number of analysts have cut their forecasts from approximately 5,500 by year end down to 5,000 for the ASX 200.
The year ahead?
The next 12 months brings with it many challenges; the global growth outlook in particular. Will company earnings miss market expectations or will they continue to recover from the near economic disaster of 2008? Will governments around the world continue to provide economic stimuli?
For Australia however, the future appears a little rosier. With the Chinese juggernaut continuing to power ahead, the local landscape appears a little more settled than it does globally.
Aussie companies are generally in good shape and the major banks have maintained strong balance sheets. Company earnings also remain quite strong with stocks certainly not overpriced.
With the Aussie dollar likely to remain strong next year, exporters may continue to feel the pinch. However, its strength is unlikely to wreak any serious havoc on the overall market.
If you would like further information regarding ProAcct’s in-house investment funds please contact our fund manager, Anthony Torzillo on 9880 9600.
