Is now the time to invest?
March 2009

Australian share market at 5 year low: what should I be doing?
There hasn’t been much good news to report in recent months as the global financial crisis has been widely felt; the Australian share market has lost more than 50 percent of its value since November 2008. You’ll notice this when you look at your superannuation, allocated pension or investment portfolios.

While there may be more pain in the financial markets before we see a resurgence of confidence and values, there may also be an opportunity for you to take advantage of the depressed markets by proactively investing while prices are down.

Dollar cost averaging is the practice of investing a fixed dollar amount at regular intervals (e.g. monthly) in a particular investment or portfolio, regardless of the price of the assets you're investing in. In this way, more shares or units are purchased when prices are low and fewer shares or units are bought when prices are high. Over the long term, this has the effect of averaging the price you pay. While you may not get all your shares or units at bargain prices, your average price may be lower.

Now could be a good time to consider starting a dollar cost averaging strategy while markets are low but the underlying assets remain sound investments.

According to Phil Ruthven, IBISWorld Executive Chair, when the share market does recover it could do so quickly.

“Moving client money into equities before a market recovery is important because when it does recover, the Australian Securities Exchange (ASX) could potentially rise by 25 percent quickly,” Phil Ruthven said in Financial Standard magazine on 2 March 2009.

Rather than waiting for the Australian share market to return to its former highs, contact Cliff, Kylie or Quintin today to find out more about how we can help to secure your financial future.