Share Market Update | First Quarter 2011

It has been another turbulent quarter with a number of events causing market volatility.

The dominant share market update in March was the earthquake and tsunami in Japan, which caused panic selling.

Uranium stocks were hardest hit due to the fears of suspension of nuclear power sources globally following the meltdown of the reactor in Fukushima. As more information came to hand that damage was not as bad as first thought, buying returned as investors bid up prices of “safer” energy stocks including coal and oil stocks.

The US Market remained flat during March (+0.1%), with recent positive indicators offset by continued weakness in the housing sector. There are also concerns over some of the global issues previously mentioned.

Domestically, the market shrugged off the catastrophic events in Japan, fears of a China slowdown and ongoing tensions in the Middle East, to post gains for the fourth consecutive month. The ASX 200 rose by +0.13%.

The Australian market rose by +1.95% for the quarter, but underperformed the majority of developed economy markets. It seems the high AUD is deterring investors from the Australian market. Concerns over Chinese demand weakness impacting materials demand.

It is becoming quite prevalent that good positive returns are a lot harder to find in this type of market.

Some of the old investment techniques that were forgotten about during the great Bull Run are now going to become more important.

These include investing for the long term, diversification and dollar-cost averaging. Personally, I think it is very important to have a well-defined investment strategy focusing on the goals that you would like to achieve. Then invest in assets which will give you the return that you require to achieve these goals.

If you have this, along with someone to help you manage your emotions, stick to the plan. You’ll be well on your way to achieving good returns and reaching your goals.


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Disclaimer: Information contained within this article is of a general nature. Do not be rely upon it when making financial decisions. Please consult a professional financial advisor or planner (like us!) before acting.