The Easter weekend is upon us. Some will enjoy the four days off; others have taken the opportunity to get the kids away for the school holidays and head away (hopefully not to Sydney). The politicians will keep bombarding us with crazy, undeliverable promises and obscene gaffs.
The next five weeks to election day can’t come quickly enough.
So, as we close out the trading week, Wealth Within’s Dale Gillham has kindly given us an early end of week market wrap. It’s all his except for the small-cap wrap.
What are the best and worst-performing sectors this week?
The best performing sectors include Financials, Utilities and Consumer Staples, which are all currently up under 1% for the week. The worst performing sectors include Information Technology and Healthcare, which are down over 1% followed by Consumer Discretionary, as it is down just under 1%.
The best performers in the S&P/ASX top 100 stocks include Northern Star Resources Ltd (ASX:NST) up more than 6% followed by Evolution Mining Ltd (ASX:EVN) up more than 5% and AMP Ltd up more than 4%. The worst-performing stocks include The a2 Milk Company Ltd down more than 8% followed by Pilbara Minerals Ltd (ASX:PLS) down more than 7%, while ResMed CDI (NYSE:CDI) and Fisher & Paykel Healthcare Corp Ltd are down more than 5%.
What's next for the Australian stock market?
This week and next are short weeks on the Australian market given that it is Easter, and typically volumes are lower because many of us take holidays around this time. That said, the All Ordinaries Index started the week on a positive note again trending up before showing some weakness.
Unlike the previous week, however, regardless of where the market closes on Thursday (at time of writing, the market was higher, with the ASX up 0.65%), this week is technically a down week.
Editor’s note: Qantas Airways (ASX:QAN) Ltd and Webjet Ltd (ASX:WEB) were the best performing stocks for the day at time of writing, rising 7.56% and 6.07% respectively.
This is a good sign and in line with what I mentioned in my previous report where I stated that the All Ordinaries Index would likely fall to around 7,600 points. Given this, don’t be surprised if next week is also a down week on our market although there is a possibility that it could also rise.
For now, it is wise to play the wait-and-see game until the Australian stock market finds support and starts to rise, as recent history shows that anything is possible in our market and that we need to expect the unexpected. I am still confident once we find support that the market will rise into April and well into May before we see the next peak.
Do investors want control of their investments?
According to a recent report from the Australian tax office, there are over 600,000 self-managed super funds (SMSF) with total estimated assets of around $876 billion, which accounts for almost 25% of all superannuation funds. The ATO also reported that over 50% of SMSFs were set up over 10 years ago and the establishment of new SMSFs has been on the decline for several years. So, is this a sign that investors no longer want control of their investments?
We need to remember that most of the growth in SMSFs came after the GFC crash, as so many were disenchanted with their managed fund returns and advisors telling investors to hold for the long term. For many, it was a hard pill to swallow as they were sitting on portfolios that had fallen 50 to 70%.
As the market runs on cycles, I am confident that we will see another sustained market fall in the second half of this decade. When this occurs, unfortunately, investors will repeat the mistakes of the past and watch their industry superannuation fall away heavily again and the cycle will continue with a large number setting up a SMSF.
Right now, around 28% of all SMSFs funds are invested in listed shares, which means they are important to our stock market, but the industry continues to propagate that SMFS are too hard to manage and too costly to run, although in my experience, it is the exact opposite. There are many providers with low-cost services that assist SMSF trustees to set up and properly manage an SMSF and with a good education, anyone can achieve solid returns on their superannuation that either rival or beat many of the managed fund returns.
The streets are littered with those who make decisions after a major event that costs them dearly, but surely the wise thing to do right now is to ask yourself these two questions: What if and how? What if the market falls heavily, how will I protect my superannuation? Remember if you fail to plan you plan to fail.
On the small-cap front:
Barring any massive downturns in the last hour of trading, here are some of the small-cap winners for the day (all figures are correct at time of publication).
- CardieX Ltd was 8.33% higher;
- Marmota Ltd was 6.67% higher;
- Latin Resources Ltd was 5.41% higher;
- Golden Rim Resources Ltd was 5.06% higher;
- Okapi Resources Ltd was 4.94% higher;
- Brookside Energy Ltd was 4.17% higher;
Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also author of the award winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good bookstores and online at www.wealthwithin.com.au